Ten years of a contrasted union: The African Union at the crossroads or business as usual?

Author: Ilene Grabel
Working Paper, Political Economy Research Institute, University of Massachusetts, malady
June 2012


The current crisis is proving to be productive of institutional experimentation in the realm of financial architecture(s) in the developing world. The drive toward experimentation arose out of the East Asian financial crisis of 1997?98, which provoked some developing countries to take steps to insulate themselves from future turbulence, IMF sanctions, and intrusions into policy space. I argue that there are diverse, unambiguous indications that the global financial architecture is now evolving in ways that contribute to a new institutional heterogeneity. In some policy and institutional innovations we see the emergence of financial architecture that is far less US- and IMF?centric than has been the norm over the past several decades. Moreover, the growing economic might, self? confidence and assertiveness on the part of policymakers in some developing countries (and, at the same time, the attendant uncertainties surrounding the economies of the USA and Europe) is disrupting the traditional modes of financial governance and dispersing power across the global financial system.

In making these arguments it is important not to overstate the case. It is far too early to be certain that lasting, radical changes in the global financial architecture are afoot, or that the developments now underway are secure. Nor am I arguing that all regions of the developing world either enjoy the opportunity and/or have the means to participate in the process of reshaping the global financial architecture. Rather, my goal is more modest. I show here that today there are numerous opportunities for policy and institutional experimentation, and there are clear signs that these opportunities are being exploited in a variety of distinct ways. As compared to any other moment over the last several decades, we see clear signs of fissures, realignments and institutional changes in the structures of financial governance across the global South. I have elsewhere characterized this current state of affairs as one of “productive incoherence.” I use this term to capture the proliferation of institutional innovations and policy responses that have been given impetus by the crisis, and the ways in which the current crisis has started to erode the stifling neo?liberal consensus that has secured and deepened neo?liberalism across the developing world over the past several decades.

The productive incoherence of the current crisis is apparent in the emergence of a denser, multi-layered and more heterogeneous Southern financial architecture. The current crisis has induced a broadening of the mission and reach of some existing regional, sub?regional, bilateral, and national financial institutions and arrangements, and has stimulated discussions of entirely new arrangements. In some limited cases these institutions and arrangements substitute for the Bretton Woods institutions. This substitution is most pronounced in cases when the Bretton Woods institutions have failed or have been slow to respond to calls for support, or when they have responded to such requests with conditionality that has been overly constraining of national policy space. But in most cases, the institutions and arrangements that I discuss here complement the global financial architecture. I will argue in what follows that recent changes in the Southern financial landscape increase its potential to promote financial stability and resilience, support the development of long-run productive capacities, advance aims consistent with human development, and expand national policy space. Moreover, the emergence of a vibrant Southern financial architecture is not simply additive. Rather it may prove transformative, insofar as the Bretton Woods institutions are pushed to respond to long?standing concerns regarding their legitimacy, governance, and conditionalities.



Download full report

By Tjiurimo Hengari


The 19th summit of the African Union (AU) from 9-16 July in Addis Ababa will in all likelihood not be ordinary, purchase as it will mark a decade since the transformation of the Organisation for African Unity (OAU) into the AU in 2002 in Durban, online South Africa. Crucially, ten years on, the July summit theme ‘Boosting Intra-African Trade’ captures a new agenda and the importance of economic growth and trade integration as essential aspects in the continent’s integration in the global economy.

While the OAU manifestly fulfilled its role and historical mandate of decolonisation, the vision and mandate of the AU is largely premised on development, including economic and political integration of the African continent. In light of this developmental premise and emphasis in its Constitutive Act, which entered into force on May 26, 2002, the AU represents a major shift from the legal, political and institutional framework of its predecessor.

With the summit looming, it is fitting to debate and reflect how this organization has fared a decade on, both in light of its promise of new principles, new thinking, including new approaches to African challenges and governance. These principles and approaches seek to capture on a wide continuum, the nexus between democracy, good governance on the one hand, and on the other Africa’s economic development and integration in the global economy.

Looking back: Ten years since the foundation of the AU

Over the past decade, international relations have gone through profound change. The rise of emerging powers, including China and Brazil have led to a momentous shift, creating new opportunities and threats in Africa’s engagement in international affairs. The global economic contraction in Europe, which started with the global financial crisis in late 2007, has altered the traditional relationship Africa had with key western powers. It has opened Africa’s commodity economies to possible shocks, thus forcing African leaders to accelerate trade integration on the continent, while seeking new partnerships in the developing world.    

On governance, it should be mentioned that the majority of Africa’s 54 states are to varying degrees democratic. There have been slow but steady developments with regard to forms and shapes of democratic governance.

The African Union, for instance, has taken an explicit decision not to recognise countries in which civilian governments have been overthrown by a coup d’état. Also, the African Peer Review Mechanism (APRM), flowing out of the New Economic Partnership for Development (NEPAD) has as its explicit rationale the strengthening of democracies and the accountability mechanisms within it. In Côte d’Ivoire, a democratically elected president finally assumed office in 2011 after a decade of political deadlock and civil strive. In one of Africa’s more or less stable democracies, Senegal, a head of state seeking a de facto third term lost an election early this year and accepted defeat graciously.

Significant progress has been made in creating the institutional infrastructure and processes that are necessary for a more efficient African Union. In addition to these, the African Union has been undertaking crucial peacekeeping missions in various parts of Africa, including Burundi, Sudan and Somalia. The modest successes of these missions can be attributed to good foreign policy collaboration and momentum between Africa’s driver countries, including Senegal, South Africa, Nigeria and Algeria.

However, as the years wore on, this momentum, also visible in the conceptualisation of Nepad and the APRM seems to have been lost. Moreover, the absence of a coherent state-led, but widely accepted AU approach with regard to conflict resolution and management has created a vacuum in what the AU can do as an institution.  

From an institutional viewpoint, relationships and coordinating mechanisms across diverse issue-areas have been built with various international organisations, including the United Nations and the European Union. Moreover, through the African Union, various attempts had been made with regard to streamlining the activities of regional organisations and economic communities in line with the objectives of the African Union.

Even if modest in their successes, interventions and the legitimisation of the AU’s cross-cutting agenda have allowed Africa to focus on the key challenges of governance, education and economic growth. These have without doubt legitimised the AU as the principal interlocutor in African affairs, worth strengthening.

It deserves mention, however, that the AU is still a work in progress and the past decade of its existence did not mask contradictions between what the AU ambitiously purports to be on the one hand, and the structural and institutional impasse in which it finds itself when it comes to achieving Africa’s developmental aims on the other. A continental institution is a sum of its composite parts. Therefore, it can only be efficient if the constituting membership allows it to function in line with its charter – thereby assuming and building its own institutional dynamism and organisational efficiency.

In light of these challenges, the roadmap that emerges out of the upcoming summit in Addis ought to be transformational and should crucially define the aspirations of the African Union for the next ten years. It will be a missed opportunity if it turns out to be just another summit.

Three Areas for Attention

Three aspects ought to enjoy specific attention. First, in line with its theme the summit should put explicit emphasis on the translation of modest democratic governance into concrete developmental deliverables in African countries. Even if economic growth has been positive over the past decade in many countries, this has not put a dent on widespread poverty and underdevelopment. This does suggest new bridges to be built between African driver countries as a means to bring renewed impetus to Africa’s developmental agenda and coordinated engagement with international actors on economic, environmental and social developmental issues.

Second, more attention should be placed than what has been otherwise the case thus far on the strengthening of regional economic communities as essential anchors in matters of peace, security and development. The past ten years have shown that regional organisations are the best platforms to promote peace, security and development.

As a case in point, under difficult circumstances, the Economic Community of West African States (ECOWAS) had undertaken commendable work in the promotion of peace in that troubled region. The AU should reinforce such successes by playing a facilitator role based on clearly defined values, norms and objectives. For this to happen, the institutional capacity of the African Union should be strengthened, with more powers devolved to the Commission. A strengthened Commission would allow the institution to develop a coercive soft-power role, while giving it a much more active character in the diffusion of agreed continental norms and objectives.

Third, with the anomaly of two candidates, one from a small country, Jean Ping of Gabon and Nkosazana Dlamini-Zuma from a big country, South Africa contesting the chairmanship of the AU commission, the summit should provide clear guidelines and principles around leadership of the Commission.


In conclusion, vague and ambitious declarations are less likely to create a more solid African Union as a pivot in Africa’s integration in the global economy. Much of what emerges out of Addis depends on how pragmatic and programmatic the vision of the AU is going forward. African leaders should leave the summit with clearly defined, but manageable outcomes, creating a new dynamic that would address Africa’s chronic challenges.

Tjiurimo HENGARI is the Head of the South African Foreign Poliy and African Drivers Programme at the South African Institute of International Affairs, based at the University of Witwatersrand, Johannesburg.


Source: SAIIA