Prospects for a More Peaceful Africa: The Potential of a Monetary Union

and 09.18.15
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World News /18 Sep 2015
and 09.18.15

Prospects for a More Peaceful Africa: The Potential of a Monetary Union

The proposed economic union of African nations has the capacity to drastically diminish conflict on the continent. The reasoning behind this is the same as the reasoning that is the basis for theories seeking to explain interactions between nations (economic peace theory, the liberal school of thought in international relations). These theories hold that the stronger the economic ties between nations the less likely they are to engage in conflict with one another. These theories are grounded in the observation that there have been no open wars between the great powers since the end of World War II, when globalization and economic integration began in earnest. Democratic peace theory observes that there has never been a war between two modern democracies which is in part attributed to the fact that democracies have free markets and a high level of trade which discourages conflicts that could lead to war.

The African Union is in the process of creating an economic and monetary union like the European Union as one of its primary goals. Though the economic institutions are still in the planning stages and not yet functional, the early results hold promise. This economic union may be of particular benefit to Africa because of some of the disadvantages many African nations face. Among these are the geographic challenges of arbitrary borders created as the legacy of European colonialism. It is well-established that landlocked countries are at a distinct economic disadvantage. The vast majority of their imports and exports must pass through another country before finding their way to the world markets. This is problematic for a number of reasons. It can add another layer of tariffs, making a country’s goods more expensive on the global market and therefore less competitive. It causes a country to rely on the infrastructure of a neighboring state. As a result, these infrastructure links may be insufficient to meet the demands of the landlocked state. An economic union where all African nations use the same currency would encourage African states to cooperate with their neighbors because their economic futures are closely tied together by the common currency.

Liberalization of markets is seen by many as an important step on the path to becoming a mature modern democracy. An economic union would also discourage protectionist practices that prevent the development and modernization of certain sectors.

The restrictions on foreign development of and investment in telecommunications in Ethiopia are a prime example. Modernizing infrastructure such as telecommunications creates jobs and a healthy economy which in turn leads to greater stability, making the state less prone to conflict, especially civil strife. Internal conflict is extremely rare in countries with strong economies and consistent growth.

A drastic reduction of civil conflict in Africa will obviously benefit all. These destabilizing incidents impede the development of African nations, making it more difficult for them to overcome the many other issues they face in modernizing their economies and infrastructures. The African Investment Bank is a critical piece in the puzzle of stabilizing and strengthening those nations in Africa which are most prone to conflict. There are many places in Africa that are ignored by the international community because they have little effect on the global economy or the security of more developed nations. The African Investment Bank would be funded by nations that have a vested interest in the success of these countries. The funds available from this institution would be used to develop industry and infrastructure, thereby providing these countries an opportunity to develop once open markets and a common external tariff allow the goods they produce to pass more easily into the global marketplace.

The proposed economic union is not without its problems, and there are myriad issues that could diminish its effectiveness or scuttle it altogether. The proposed steps to be taken before the implementation of full economic union—with regional economic unions serving as precursors to the final unification of all of Africa under a single currency and economy—has some benefits, but it has one glaring weakness. It is inevitable that some of these precursor economic unions will be stronger than others and may vastly outperform the others which might result in the more powerful unions balking even though all the other unions do combine. The result could be two competing economic blocs rather than a unified Africa. While the situation may still be preferable to the current state of affairs, it is easy to imagine situations in which conflict between the states in these two potential economic blocs could develop. The ability to strengthen military capabilities in countries in the stronger economic block could cause some nations to implement revisionist policies in search of natural resources.

A more effective and less risky route to complete economic union in Africa could be the creation of a union in which all countries immediately enjoy the advantages of freer trade through more open markets, but in which certain economic benchmarks must be met before countries are allowed to join in the common currency. This prevents weak economies from being a drag on the value of the currency from the outset while also affording them an opportunity to strengthen through more open economic ties with their neighbors. This approach would also prevent the possibility of one of the precursor economic unions becoming more powerful and refusing to join the final union.

Recent events in the Eurozone have shown that it is possible for weak economies to become a drag on their stronger compatriots. The issues stem from countries like Greece, Spain, and, to a degree, Ireland, causing economic problems for stronger countries, such as Germany. These countries, however, have never come close to armed conflict in Europe. Indeed, outside of some separatist campaigns like the ETA in Spain or the IRA in Great Britain, there has been little violence in Western Europe since the end of World War II. These problem economies are dealt with in meetings where topics such as enforced austerity measures are imposed and their debts are renegotiated. It is worth asking the question if it is possible that countries in Africa, which are not so far removed from conflict as those in Western Europe, might possibly resort to military action to overthrow a problematic government that is creating a drag on this new pan-African currency through the implementation of ill-advised policies. However, there is a stronger norm against regime change and for sovereignty in Africa than in the rest of the world. After all, the charters of the OAU and, with a few more exceptions, the AU contain strong and explicit guarantees to respect the sovereignty of their member states.

This reluctance to intervene in the internal affairs of other African states stems back to the colonial history of Africa and the hard-won independence of many of its nations. Sovereignty in Africa was paramount throughout the history of the OAU, even when it may have been to the detriment of its people, and, while there are now provisions for intervention in certain cases, the AU has largely maintained this tradition.

There is certainly precedent for African leaders interfering in other countries. One need look no further than Liberia’s Charles Taylor for an example of how one head of a government may try to take advantage of another it perceives as weak. Taylor armed both the Revolutionary United Front and the Armed Forces Revolutionary Council, two of the rebel groups vying for control of the country. He allowed these groups to trade blood diamonds for weapons that they used to commit atrocities on the civilian population of Sierra Leone.

West Africa has a long history of economic integration in the post-colonial era dating back as far as 1945. The Economic Community of West African States, or ECOWAS, was created in 1975 in a push for deeper economic integration of the West African states. ECOWAS has branched out beyond simple economic concerns. Recognizing that peace and security are requirements for successful economic development, the Protocol Relating to the Mechanism for Conflict Prevention, Management, Resolution, Peacekeeping, and Security was signed in 1999. This agreement created a new framework that, for the first time, allows states in the region to intervene in the internal affairs of one of their neighbors in the interest of resolving conflict and maintaining regional security.

ECOWAS represents a broader trend in Africa away from nonintervention and noninterference at any cost that had the protection of national sovereignty as its ultimate goal towards a more humanitarian approach to intra-African affairs. The relative success of ECOWAS interventions in conflict situations within the region has taught both the organization and observers at the African Union valuable lessons of the effectiveness of conflict mediation and response mechanisms. However, if ECOWAS continues to maintain and implement a strong regional peace and stability mechanism while other regional bodies and the African Union as a whole fail to do so, it could further reduce the likelihood that a strong and successful regional body would be willing to fully integrate into a weaker and less successful continental political and monetary union.

The pitfalls discussed earlier are areas that need to be guarded against as this economic union is implemented. They must be addressed if the economic union is to have the maximum chance of preventing the types of conflicts that have plagued the African continent for all too long.

The prospect of the union, however, is encouraging and if implemented correctly could go a long way to speeding development and ending cycles of violence on the continent. The successes of West Africa’s economic unions are heartening and hopefully are a harbinger of things to come for the entire continent. The potential for peace held by this economic union is tantalizing. If it lives up to its potential and avoids the traps that could derail it, then it may be the cure for many of the ills that have prevented African nations from achieving peace and economic prosperity.

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