GHANA IN THE REGIONAL CONTEXT AU/ECOWAS (Integration)
RATIONALE FOR INTERGRATION
Why would one country want to integrate with other ECOWAS countries economically?
- Promotes international trade
- Increases the market size
- Facilitate easier transportation
- Promotes FDI
Economic Integration Levels
- A free trade area: Basically an agreement not to charge taxes for bringing goofs into a country. The current largest free trade is NAFTA (US-Canada-Mexico). The European FTA (Iceland-Norway-Switzerland) has been there the longest.
- A customs Union: similar to a free trade area but with the addition of a common tariff for imports from other countries
- Common Market:
- Economic Union: generally, on the economic viewpoint, the countries have become economically one

If it has all these benefits, why don’t we implement it?
- Lack of political will
- Not all economies are balanced, the possibility that stronger economies will “commandeer” some of the weaker ones
- Exchange rate issues
- Language barriers
- Economic policy differences
- Low level of technology, economies are not sufficiently technologically differentiated

African Union
The OAU was formed in 1963, at that time it was called the Organization of African Unity, and was initially spearheaded by Kwame Nkrumah. It was changed into the AU, African Union, in 1975. It has ** member countries and has its headquarters in Addis Ababa, Ethiopia. Its main purpose was to accelerate the political and economic integration of African countries, defending African common interests and promoting peace, stability and democracy in Africa.
African Union After independence, Ghana initiated moves that ultimately culminated in the birth of the regional body that has today become known as the African Union; or AU, as it is called for short.
The African Union is a union consisting of 53 countries on the continent. Established 9th July, 2002 succeeded to the (OAU).
The most important decisions of the AU are made by the Assembly of the African Union, a semi-annual meeting of the heads of state and government of its member states. The AU's secretariat, the African Union Commission is based in Addis Ababa Ethiopia.
Among the objectives of the AU's leading institutions are:
· to accelerate the political and socio-economic integration of the continent;
· to promote and defend African common positions on issues of interest to the continent and its peoples;
· to achieve peace and security in Africa; and
· To promote democratic institutions, good governance and human rights.
Institutions
To achieve its aims with much efficiency, AU is composed of following institutions:
- The Assembly of Heads of State and Government (it meets in Ordinary Session first Monday of June every year)
- The Council of Ministers i.e. Foreign Affairs Ministers (it meets twice a year, in February mainly on budgetary matters and in May/June prior to Summit.)
- Other Ministerial Sectorial Meetings are held every two years in different domains such as Labour, Information, Trade, Health, Culture, etc.

The General Secretariat ACHIEVEMNTS
1. Decolonization:
2. Boundary conflicts
3. Defense of Member States' sovereignty and territorial integrity
4. The struggle against Apartheid:
5. Promotion of African Culture:
6. Fields of economic and social development, transport and telecommunication:
7. Fields of Education, Science, Health:
8. Action in favor of African Refugees:

CHALLENGES/FAILURES

Financially weak and this cripples the African Union, and makes it hard for it do the kind of things that its role model, the EU, is capable of doing.
AU keeps copying everything the EU does and ends up constantly looking “useless” and “laughable”, in terms of implementation of its resolutions and also, in terms of handling of moments of crisis in Africa.
The third factor that accounts for the ineffectiveness of the AU is the “notion of non-interference in the internal affairs of other countries The regional body has had to wait for Europe and America to push the UN to act to stop mad and power-drunk Gaddafi from slaughtering his own citizens, who only want to exercise their fundamental human rights to change a government which has been imposed on them for 41 years. The AU has, once more, proved that it cannot be trusted to keep its house and backyard in order.
The Budget:
The annual budget of the Organization (1st June to 31st May) is provided by contributions from Member States in accordance with the scale of assessment which is calculated on the basis of area, population and per capita income. However, no Member States shall be assessed on an amount exceeding 20% of the yearly regular budget of the Organization. The budget is in the range of US$ 27–30 million.
ECOWAS
The vision that the founding fathers had at the time of the creation of ECOWAS was one of collective self-sufficiency through the integration of the sixteen West African countries into an economic block with a single market organized around an economic and monetary union. This concern was born out of the realization that the domestic markets of the member States taken individually were, as a result of their smallness, far from being competitive in a world environment marked by the existence of large trade blocks.

The overall objective of ECOWAS is to promote co-operation and integration in order to create an economic and monetary union for encouraging economic growth and development in West Africa.
In order to do this, the following actions are envisaged: the suppression of customs duties and equivalent taxes the establishment of a common external tariff; the harmonization of economic and financial policies the creation of a monetary zone.

In view of the slowness in the progress recorded by ECOWAS, the 1975 treaty has been revised. The principle of supranationality[1] in the application of decisions and the autonomous funding of the budgets of the institutions have been introduced. Furthermore, the creation of supranational institutions of control and arbitration has been envisaged in the application of decisions: a court of justice, a parliament and an economic and social council.
Achievements
- In spite of the difficulties, ECOWAS has chalked up remarkable progress in the areas of:
- Free movement of persons; construction of regional (inter-State) roads,
- Development of telecommunication links between the States
- Maintenance of peace and regional security
- West African gas pipeline
- Interregional infrastructure
It is in the area of the integration of markets that the efforts of the Community have been frustrating. In fact, the trade liberalization scheme is not yet operational as shown by the low level of the intraregional trade which is only 11% as compared to trade with third countries. Besides, the common ECOWAS external tariff has still not seen the light of day and the economic and financial policies have not been harmonized although a framework has been established for this.
Downside
- There is political instability in the sub-region and people are focusing on political instead of economic affairs
- Bad governance
- Many weak economies so therefore they do not have what it takes to integrate fully (some have almost nothing to bring to the table)
- Colonial differences
- Many members do not pay dues
Problems Faces by ECOWAS
Numerous problems have been encountered by ECOWAS in the enhancement of the process of regional integration of West Africa. Among the most important of these problems are:
- the political instability and bad governance that have plagued many of the countries;
- the weakness of the national economies and their insufficient divers if telecommunications and energy infrastructure;
- the insufficient political will exhibited by some member States; the bad economic policies in certain cases;
- the multiplicity of organizations for regional integration with the same objectives;
- the irregularity in the payment of financial contributions to the budgets of the institutions;
- the failure to involve the civil society, the private sector and mass movements in the process of integration;
- The defective nature of the integrational machinery in certain cases.
Promising Signs
If, on the whole, the results of the integrational efforts made in West Africa by ECOWAS have, as already indicated, been clearly below expectations, there are, however, promising signs which indicate better prospects for the future. For example, it has been observed that the absence of reliable road, that recent events in the political and economic scenery of West Africa have gradually helped to remove the principal obstacles to integration. Among these are:
- the advent of democracy in most ECOWAS countries, particularly, in Nigeria which is the dominant economy in West Africa;
- the gradual withdrawal of the State from the sectors of productive activity, and the realization that the private sector must be the mainspring of growth and economic integration;
- the adoption of a strategy for accelerating the ECOWAS process of integration in order to create a single regional market based on trade liberalization, to establish a common external tariff and to harmonize economic and financial policies;

The recognition of the relevance of a different approach in the march towards integration as found in the initiative of the non-UEMOA countries in creating a second monetary zone in West Africa which will merge up with the UEMOA zone to give rise to a single ECOWAS monetary zone in the year 2004;
How can Ghana position itself to benefit greatly from economic integration?
- Our government should have a long term strategy to benefit from the sub regional integration. This strategy should include some of these; improved labor productivity
- Better work ethics
- Improved infrastructure
- Improved Industrial relations, courts systems,
Note: se the 12 pillars of national competitiveness to answer a question like this.
12 pillars are
Basic requirements
- Institutions
- Infrastructure
- Macroeconomic environment
- Health and primary education
Efficiency enhancers
- Higher education and training
- Goods market efficiency
- Labor market efficiency
- Financial market efficiency
- Technological readiness
- Market size
Sophistication and innovation factors
- Business sophistication
- innovation