The State of East Africa: When everyone is aspiring but not rising
The EAC is one of the fastest growing economic communities in the world. This is no easy feat as the regions average growth rate is 6%. But what does that actually mean for the average East African? Chances are if you are not living in the urban areas of East Africa, the 6% growth rate is meaningless. This is because millions of ordinary East Africans are asking a simple but very revealing question, 'Why am I not feeling this growth in my pocket?' This question goes to the heart of the Society for International Development’s State of East Africa 2013: The Future Of Inequality In the EAC, which seeks to understand just how inclusive and equitable the current regional integration process and outcomes are.
by Aidan Eyakuze and Ahmed Salim. There is no question that the East African Community (EAC) is a model for regional integration across Africa. Despite some challenges and setbacks, the EAC has been significantly praised throughout the continent and among international partners over its economic and regional performance. Significant praise has come from the African Development Bank (AFDB) to the World Bank and even former US Secretary of State Hillary Clinton who once stated that the EAC is 'the most successful regional economic community among the regional trade or cooperation agreements in Sub-Saharan Africa.'
Why so much heap about the EAC?
A lot of the focus on East Africa has primarily been on its economic performance, specifically its economic growth rates. This is primarily due to the fact that the EAC is one of the fastest growing economic communities in the world. This is no easy feat as the regions average growth rate is 6%. But what does that actually mean for the average East African? Chances are if you are not living in the urban areas of East Africa, the 6% growth rate is meaningless. This is because millions of ordinary East Africans are asking a simple but very revealing question, 'Why am I not feeling this growth in my pocket?' This question goes to the heart of the Society for International Development’s State of East Africa 2013: The Future Of Inequality In The EACI, which seeks to understand just how inclusive and equitable the current regional integration process and outcomes are.
Inequality, of opportunity and outcomes, is one of the world’s most pressing social challenges and growing risks to national, regional and continental stability. What the report shows is that, despite the significant praise by influential global magazines claiming that Africa is ‘rising’ and ‘aspiring,’ only the latter is truly applicable to all East Africans. Indeed, although everyone in East Africa is aspiring for a better life not everyone is rising. This leads us with a fundamental question, are the rewards of economic growth being concentrated in the hands of a few wealthy households – the tope 10 per cent- or are they being disproportionately shared with the poor in society, namely the bottom 40 per cent?
One People, One Destiny?
What the evidence shows is that despite the EAC’s mantra of one people, one destiny, East Africa consists of three people: the richest tenth, the poorest 40 per cent and the majority in the middle making up half of the region’s population. The richest 10 per cent of East Africans, about 14.1 million people would have shared $29 billion of the $83 billion GDP in 2011, leaving each with $2,100. They live in East Africa’s cities and towns, work in industry or in the professional services sector and are direct recipients of the positive economic growth story. Their East Africa resembles Moldova in Europe or Honduras in Central America.
The poorest 40 per cent of East Africans, numbering 56 million people, shared $12.7 billion of the $83 billion in GDP among themselves, leaving each with an income of $225 in 2011. They live in the rural areas or in the slums around the towns and cities and those lucky enough to find work receive a wage that is often below the poverty line, let alone the minimum wage.
They have no health insurance and their children face a 40-80 per cent higher chance of dying before their fifth birthday compared to their richer compatriots. Those who survive are more likely to be stunted and attend schools that lack basic utilities such as power, water and sanitation and where they are taught for only a quarter of the recommended time. The peacetime East Africa they live in feels closer to Somalia or the Democratic Republic of Congo at the lowest points in their recent conflict-ridden past.
East Africa’s middle majority, about 71 million people or half of the region’s population, live a life that lies somewhere between these two extremes. This middle majority, shared $41.5 billion among themselves in 2011, ending up with $586 each, roughly equal to the average income of the wealthiest quintile of Burundi’s population.
Who Is The Regional Integration Process For?
It would be unfair to blame regional integration for this state of inequality in East Africa. It can be argued, however, on the basis of the evidence presented in the report, that the strong economic growth performance that has been unleashed by regional integration efforts, has done little to close the gap between the rich and poor, and it may not even be moving the region in such a direction. This is especially true when one considers and interrogates the fundamental and operational principles in the Treaty for the Establishment of the EAC and juxtapose it with the realities on the ground:
1) The attainment of sustainable growth and development of the Partner States by the promotion of a more balanced and harmonious development of the Partner States (Article 5)
2) Equitable distribution of benefits (Article 6)
3) People-centered and market driven to cooperation (Article 7)
It is obvious that these three tenets of the EAC have not played out as substantially in the region even in light of the positive economic growth story. So who is the regional integration process for? We do know that intra-EAC trade expansion valued at $5 billion in 2011 (through reduced physical and non-physical barriers) as well as increased trade between the EAC and the world (through improved product/service competitiveness and export diversification) is associated with faster economic growth. The trouble we are seeing is that as the region economically integrates, part of it socially disintegrates, leaving a bleak future. If we aren’t careful and ignore some of the inequality challenges at the expense of positive economic growth we may very well see an integrated region and a realized EAC but only at an economic level, the periphery, where only a few benefit from regional integration and very few understand the benefits. The costs and disadvantages are felt to those in the poorest 40 percent in East Africa, where the education system has failed the youth, where there is a malnutrition epidemic and where jobs are scarce and only available in certain sectors. The question is whether the regional integration project can bridge the gap that exists between three East Africas that currently exist.
Former EAC Secretary-General, Ambassador Juma V. Mwapachu, has lamented that the EAC remains predominantly a community of trade and economic relationships, not one of peoples. It is not inconceivable that twenty years down the line, when borders are diminished, one-stop border posts are a norm, the ports of Mombasa and Dar es Salaam are revolutionized and non-tariff barriers are a thing of the past this will all be in spite of people’s social development. People will be living in an integrated region with little to show for it at the personal/household level. It is our hope that this scenario is just that, a possible scenario but not a reality. The 2013 State of East Africa report proposes some recommendations that we believe will prevent a further disintegration at the socioeconomic level of the EAC.
Only a deliberate and determined strategy to truly forge One People from three groups of East Africans – the richest 10 per cent, the poorest 40 per cent and the middle majority – stands a good chance of leading to the One Destiny that is the destination to which we are all travelling.
Aidan Eyakuze is Associate Regional Director for the Society for International Development and principal author of the State of East Africa Report 2013: The Future of Inequality in the EAC.
Ahmed Salim was Programme Manager for the Society of International Development and is principal author together with Aidan Eyakuze of the State of East Africa Report 2013: The Future of Inequality in the EAC.