The Sunday Mail
Naturally, this economic dis-empowerment left unattended poses the risk of social and economic instability.
I’ve always been sceptical of integrated economies; scepticism adopted from fairly persuasive empirical evidence and suspicion of whether the objectives vouched for by proponents of the agenda are actually desirable ones or not.
The virtues of integrated economic systems carry similar ambiguity as what for years has been perceived as economic growth, especially in Africa.
Sure, based on dominant economic understanding, more trade, lower tariffs on movement of factors of production and the output itself, create more economic growth.
But, what should be of more importance to Africans is: What kind of growth are we talking about in our case?
It’s worth bemoaning that over the last year or so, we have had little deliberation on our continent over Thomas Piketty’s book “Capital in the 21st Century”.
While Piketty focuses on wealth and income inequality in Europe and the United States, such an interrogative approach seems much more fitting to Africa’s historic and still existing prejudiced wealth distribution.
Piketty’s book argues that an inherent outcome of existing global capitalism – the way it is presently practiced – is that the rate of return on capital grows much faster than income levels.
In other words, capital returns in the form of profits, dividends, interest income, or asset appreciation, far exceed income growth.
While he focused his research on the Western world, a look at these dynamics in Africa leaves one with a much bleaker outlook.
Take Nigeria, for instance.
While the nation has become Africa’s biggest economy, a poverty survey by Nigeria’s National Bureau of Statistics published in 2012, shows that 61 percent of Nigerians were living on less than US$1 a day in 2010, up from 52 percent in 2004.
In South Africa, a country heralded as a globally emerging market and part of the Brics grouping, the number of people living on less than US$1 a day has doubled over the last two decades.
So, while these countries can be commended for achieving notable economic growth, increased inequality has been an accompanying presence.
The problem stems from the majority of locals not having ownership of capital. This is a notoriously pervasive scenario across Africa.
Consider our neighbours to the north, Zambia. The black majority only have ownership in as little as three percent of the country’s capital markets.
More introspectively, how many of us Zimbabweans actually own any form of capital of which we derive returns through dividends, asset value appreciation, corporate profits or interest income?
The majority of us are still very much dependent on wages.
So then, it would be prudent to ask: If we wish to integrate our economies, is there a positive effect on these existing capital inequities or will greater integration only dilute this disparity, making it less visible to trace with the hopes of fixing it in the future?
Well, as mentioned before, reigning economic theory conforms to economic integration fostering economic growth.
However, exactly what kind of growth?
Consistent with Piketty’s notion, I’d argue that integration leads to greater returns on capital than rising incomes or inclusive capital ownership. There are prominent integration references such as the Nafta between the US, Canada, and Mexico in the 1990s.
As Mexico learnt, the might of capital and the concerns of where to allocate it for greater returns often suppresses social desirables like widespread income distribution or inclusion into capital ownership.
Over the course of the European Union, similar dynamics prevail as the productivity prowess and capital stature of bigger nations like Germany is depressing the economies of smaller nations – further shining a light on the challenges integration poses to sovereign interests.
Also, with integration come intertwined value chains.
While Comesa potentially integrates Zambia with other Eastern and Southern African nations’ supply chains, what is the long term benefit for their majority?
With blacks owning a meagre 3 percent stake in big enterprise, can locals realistically claim to be merging “their” economy or further ceding it to foreign ownership?
More likely, economic integration will leave smaller enterprises in which Zambians own their greater share exposed to foreign competition that would enter through integrated value chains, risking further marginalisation of the local majority.
Such a sequence unchecked breeds xenophobic sentiment.
The point here is that the nature of economic integration is skewed in favour of capital owners and those with the power of discretion on its allocation. It is not so friendly to persons outside the influence of capital ownership and, in some cases, can be to their detriment.
Naturally, this economic dis-empowerment left unattended poses the risk of social and economic instability. We have seen this before in Africa, and it continues to be appearing. For example, the Western world’s reluctance to amend historic circumstances, which left the local majority dis-empowered, led to firm action by discontent Zimbabweans.
Similar dismay is brewing in South Africa through the likes of Julius Malema, and this economic consciousness will inevitably catch on elsewhere on the continent.
It is only a matter of time until the ethos of empowerment prevails in Africa.
Thus, I recommend thorough inquisition on the potential dilutive effects that integration could have on these historically placed inequities; especially without our governments having taken adequate steps to address dis-empowerment in respective countries.
Zimbabwe has already taken the lead in doing this through necessary land reform and indigenisation.
In the near future, hopefully we will be ready for extensive integration.
Most African countries, however, are yet to address their inequities and should do so sooner rather than after integrating their economies.
It was commendable that President Mugabe encouraged South Africa to look into its own empowerment policies.
However, each nation must construct an understanding around empowerment efforts. Governments can only strive towards creating equal and fair economic opportunities for citizens to attain their own empowerment. That means empowerment, in the form of inclusion into capital ownership, cannot be entirely given by hand.
Instead, the most governments can do is create new economic systems like indigenous free markets, and to offer adequate tools through quality public services like education and health that give citizens an opportunity to enhance their economic potential for themselves.
It follows that my conviction is that only when individual governments reach a level of satisfactory provision of economic opportunity to their respective citizens, can integration be a phase to look towards.
Just as the European Union has requisites for acceptance into membership, African integration must be done on condition that countries attend to their own economic injustices first.
Now, understand that there are indeed gains to be made from integrated economic systems.
That is indisputable.
However, this is a matter of readiness and timing. For easier ponder, was, say, Zimbabwe in 1985, ready for economic integration?
