African Economic Community (AEC)

CONTACT DETAILS

OAU Headquarters
Roosevelt Street (Old Airport Area), W21K19, Addis Ababa, Ethiopia
Mail: PO Box 3243, Addis Ababa, Ethiopia
Tel: 09 251 151 7700
Fax: 09 251 151 7844
Telex: 21046

HISTORY AND PRESENT STATUS

Long before the establishment of the Organization of African Unity (OAU), African leaders had recognised that cooperation and integration among African countries in the economic, social and cultural fields were indispensable to the accelerated transformation and sustained development of the African continent. Since the early 1960s, member states were encouraged to combine their economies into sub-regional markets that would ultimately form one Africa-wide economic union. In 1980, the OAU Extraordinary Summit adopted the Lagos Plan of Action as a major step towards the goal of integration.

The commitments in this Plan and the Final Act of Lagos were translated into concrete form in Abuja, Nigeria in June 1991 when the OAU Heads of State and Government signed the Treaty establishing the African Economic Community (AEC) during the 27th Ordinary Session of the Assembly. Since May 1994, the OAU has been operating on the basis of the OAU Charter as well as the AEC Treaty, and the organisation is now officially referred to as the OAU/AEC.

The aim of the AEC is to promote economic, social and cultural development as well as African economic integration in order to increase self-sufficiency and endogenous development and to create a framework for development, mobilisation of human resources and material. The AEC further aims to promote co-operation and development in all aspects of human activity with a view to raising the standard of life of Africa's people, maintaining economic stability and establishing a close and peaceful relationship between member states.

The AEC Treaty (more popularly known as the Abuja Treaty) came into force after the requisite numbers of ratification in May 1994. It provided for the African Economic Community to be set up through a gradual process, which would be achieved by coordination, harmonisation and progressive integration of the activities of existing and future regional economic communities (RECs) in Africa. The RECs are regarded as the building blocks of the AEC. The existing RECs are:

• AMU (The Arab Maghreb Union);
• ECCAS (Economic Community of Central African States);
• COMESA (Common Market of Eastern and Southern Africa);
• SADC (Southern African Development Community); and
• ECOWAS (Economic Community of West African States).


The implementation of the Abuja Treaty is a process that will be done in 6 stages over 34 years, i.e. by 2028, as follows:

• STAGE 1: Strengthening existing RECs and creating new ones where needed (5 years);
• STAGE 2: Stabilisation of tariff and other barriers to regional trade and the strengthening of sectoral integration, particularly in the field of trade, agriculture, finance, transport and communication, industry and energy, as well as coordination and harmonisation of the activities of the RECs (8 years);
• STAGE 3: Establishment of a free trade area and a Customs Union at the level of each REC (10 years);
• STAGE 4: Coordination and harmonisation of tariff and non-tariff systems among RECs, with a view to establishing a Continental Customs Union (2 years);
• STAGE 5: Establishment of an African Common Market and the adoption of common policies (4 years); and
• STAGE 6: Integration of all sectors, establishment of an African Central Bank and a single African currency, setting up of an African Economic and Monetary Union and creating and electing the first Pan-African Parliament (5 years).

The principal technical policy making organ of the AEC is the Economic and Social Council, also known as ECOSOC. The functions of ECOSOC are central to the implementation of the objectives of the AEC. As such ECOSOC is the most important specialised organ in respect of all activities relating to, directly or indirectly, the intended establishment of the African Economic Community. In this regard it is responsible for the preparation of policies, programmes and strategies for cooperation in the socio-economic field, as well as the coordination, evaluation and harmonisation of activities and issues in this field.

In addition, ECOSOC is responsible to examine the reports of all the Specialised Technical Committees. It is supposed to monitor the progress made in the establishment of the AEC, i.e. by way of the six phases identified in the Treaty and, consequently, under the Sirte Declaration process. Lastly, the body is responsible for supervising the preparations for international negotiations in these fields, for assessing their results and reporting annually to the OAU/AEC Summit, through the Council of Ministers.

The Specialised Technical Committees of the AEC are:

• Committee on Rural Economy and Agricultural Matters;
• Committee on Monetary and Financial Affairs;
• Committee on Trade, Customs and Immigration Matters;
• Committee on Industry, Science and Technology, Energy, Natural Resources and Environment;
• Committee on Transport, Communications and Tourism;
• Committee on Health, Labour and Social Affairs; and
• Committee on Education, Culture and Human Resources.

It is evident from the Abuja Treaty that the concept of the Community, its eventual take-off and its progressive establishment are closely related to the process of cooperation at the regional level, as the RECs are perceived as the building blocks of the Community. A Protocol on Relations between the AEC and the RECs was concluded and signed in February 1998. This Protocol serves as an efficient instrument and framework for close cooperation, programme harmonisation and coordination, as well as integration among the RECs on the one hand (horizontal) and between the AEC and the RECs on the other (vertical). The Protocol has the advantage of enhancing the status and role of the OAU Secretariat, which is also the Secretariat of the AEC, in all matters pertaining to the implementation of the Abuja Treaty.

The adoption of the Constitutive Act of the African Union during the 2000 OAU/AEC Summit in Lomé, Togo, necessitates a structural, process and content review of the Abuja Treaty. This is important from a legal point of view, as this will ensure a sound legal basis for the African Union, will ensure that respect for the Rule of Law is maintained, and provide for the progression from organisational activities dominated by security and stability crisis situations to a developmental focus and emphasis.

South Africa signed the Abuja Treaty on 10 October 1997, after which the Treaty was ratified by the South African Parliament on 3 November 2000.


OTHER DEPARTMENTS AND COOPERATING ORGANISATIONS

• Department of Trade and Industry
• Department of Transport
• Department of Environmental Affairs and Tourism
• Department of Communications


RELEVANT TREATIES/PROTOCOLS ETC

• Treaty establishing the African Economic Community
Adopted on 3 June 1991, entered into force on 12 May 1994. South Africa signed the treaty on 10 October 1997 and Parliament ratified it on 2 November 2000. The Instrument of Ratification was signed on 2 February 2001.

• OAU Charter
The OAU Charter was adopted on 23 May 1963. South Africa was admitted to the OAU on 23 May 1994 and the OAU Charter became binding on South Africa on that same date.

• Constitutive Act of the African Union
Opened for signature on 11 July 2000 at the OAU/AEC Summit in Lomé. Signed by South Africa on 8 September 2000 and ratified by Parliament on 27 February 2001. The Instrument of Ratification was signed on 3 March 2001.

• Protocol on Relations between the AEC and Regional Economic Communities
Adopted on 25 February 1998 on signature by COMESA, SADC, IGAD and ECOWAS. ECCAS/CEEAC signed the Protocol in October 1999, but AMU/UMA is yet to sign.

• Protocol on Transport, Communications and Tourism within the AEC
Adopted by the 70th Ordinary Session of the OAU Council of Ministers, which met in Algiers from 8-10 July 1999. The Protocol is annexed to and forms an integral part of the AEC Treaty.

• Protocol to the AEC Treaty Relating to the Establishment of the Pan-African Parliament
To be opened for signature at the HIV/AIDS Summit in Abuja in April 2001.


GENERAL COMMENTS

The AEC Treaty was negotiated before South Africa became a member of the OAU, which meant that South Africa did not have an opportunity to make any inputs in this crucial Continental economic integration process. A review of the Abuja Treaty, which is scheduled to commence during 2001, will allow South Africa to make inputs into the amended version of the Treaty.

South Africa is indirectly involved in the AEC through the activities of the Southern African Development Community (SADC), which has been designated a pillar of the AEC. The other pillars are the Community of Eastern and Southern African States (COMESA) , Economic Community of West African States (ECOWAS) , the Economic Community of Central African States (ECCAS/CEEAC) , and the Arab Maghreb Union (AMU/UMA) . Other active RECs include the Intergovernmental Authority on Development (IGAD), the Central African Economic and Monetary Community (CEMAC), East African Community (EAC) and the West African Economic and Monetary Union (WAEMU/UEMOA).

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