The Treaty Establishing the African Economic Community
Context and Background
The African Economic Community Treaty (AEC and also known as the Abuja Treaty) was adopted by the African Union (AU) in 1991 and came into force on 12 May 1994. It is a treaty establishing grounds for mutual economic development among African states through a gradual process by coordination, harmonization 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 stated goals of the organization include the creation of free trade areas, customs unions, a single market, a central bank, and a common currency thus establishing an economic and monetary union by 2028.
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 indigenous development and to create a framework for development, mobilization of human resources and material. It further aims to promote co-operation and development in all aspects of human activity with a view to raising the standard of life among Africa’s people, maintaining economic stability and establishing a close and peaceful relationship among member states.
The implementation of the Abuja Treaty is a process that will be done in 6 stages over 34 years:
STAGE 1: Strengthening existing RECs and creating new ones where needed.
STAGE 2: Stabilization 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 harmonization of the activities of the RECs.
STAGE 3: Establishment of a free trade area and a customs union at the level of each REC.
STAGE 4: Coordination and harmonization of tariff and non-tariff systems among RECs, with a view to establishing a continental customs union.
STAGE 5: Establishment of an African Common Market and the adoption of common policies.
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.
The creation of Specialized Technical Committees and organs (which currently form most of the AU organs and committees) is a key area of moving towards an economic union. The adoption of the Constitutive Act of the AU during the 2000 AU Summit in Lomé, Togo, necessitated a structural, process and content review of the Abuja Treaty.
- African States commit to promote RECs, and to create relevant regional blocs where such do not exist, as building blocks for Africa’s integration and strengthening intra-REC integration and harmonization by 2007 particularly through the Arab Maghreb Union (AMU), Economic Community of Central African States (ECCAS), Common Market of Eastern and Southern Africa (COMESA), Southern African Development Community (SADC) East African Community (EAC) and Economic Community of West African States (ECOWAS).
- African States commit to an Economic and Social Commission (currently that is the AU Commission) as the principal technical policy making organ of the AEC with functions that are central to the implementation of the objectives of the AEC. In this regard the commission is responsible for the preparation of policies, programmes and strategies for cooperation in the socio-economic field, as well as the coordination, evaluation and harmonization of activities and issues of the AEC.
- States commit to establishing a free trade area and customs union in each regional bloc by 2017 and to establishing a continent-wide customs union by 2019
- African states agree to the creation of a continent-wide African Common Market by 2023 and to create a continent-wide economic and monetary union (and thus also a currency union) and Parliament by 2028. The final date for establishing a completed AEC is 2034
- States commit to eliminating trade barriers by harmonizing, simplifying and automating customs procedures and documentation, enhancing transport and logistics services, and to upgrading and improving infrastructure.
- African states commit to improving economic integration through improving and strengthening financial markets by the setting up the African Investment Bank, the African Central Bank, and the African Monetary Fund.
- States agree to urge one another to adopt employment policies that allow free movement of persons within the proposed AEC.
- African states through the RECS commit to promoting free movement of persons, rights of residence and establishing through agreements on visa relaxation, single tourist visas, and regional passports.
- African states agree to set up a Court of Justice with binding decisions on member states of the AU.
- States commit to enhance industrialization among AU states with a priority on food and agro based industries, building and construction industries, metallurgical industries, mechanical industries, electrical and electronics industries, chemical and petro-chemical industries, forestry industries, energy industries, textile and leather industries, transport and communications industries and biotechnology industries.
- African states commit to promote the integration of transport and communications and enhance integrated continental tourism.
- African states shall strengthen co-operation in education and training and coordinate and harmonize their policies for the purpose of training persons capable of fostering the changes necessary for enhancing social progress and the development of the continent.