When SADC Heads of State and Government gathered in Durban in August for the 46th Ordinary Summit, they endorsed an ambitious theme, at least on paper: ‘resilient, sustainable and inclusive industrialisation through infrastructure development, agricultural transformation and critical minerals beneficiation.’ This theme builds directly on the one adopted last year at the 45th Ordinary Summit in Antananarivo, which had also placed industrialisation, agricultural transformation and energy transition at the centre of the regional agenda.
However, achieving these objectives requires strong commitment to implementing agreements, something SADC members have lacked. The SADC leadership has spent many summit cycles highlighting that achieving the region’s industrialisation goals will require full economic integration to benefit from the 400 million-strong consumer market. This entails development of trade corridors and the harmonised movement of goods, capital and people, facilitated by initiatives like the one-stop border posts.
To that effect, the Durban communiqué commends the mid-term review of the Regional Indicative Strategic Development Plan (RISDP) for identifying high-impact priorities such as economic corridors, one-stop border posts and regional value chains. It also approves a new SADC Tourism UniVisa intended to cut border-crossing times and boost intra-regional travel and investment. These are welcome, tangible commitments. Less welcome is what the communiqué leaves unresolved – the slow implementation of key initiatives, including ratification of protocols that are crucial for regional integration. While the communiqué ‘urges’ member states to ratify protocols and agreements that have yet to enter into force, many still resist because of their domestic political situations.
Most concerning is that the 2005 Protocol on the Facilitation of Movement of Persons, a key pillar of the integration agenda, remains largely unratified by most member states, 21 years after its adoption. Only 10 member states have signed on, far fewer than the two-thirds needed for ratification. Despite South Africa’s calls at the Durban Summit to ratify this protocol, which aims to ease restrictions on travel, residence and commercial activity within SADC, its enforcement is unlikely in the near term. Pretoria’s championing of the protocol is also undermined by recent anti-immigration sentiments and hostility towards economic migrants in the SADC region and beyond.
Another key agreement that requires urgent ratification is the agreement to establish the SADC Regional Development Fund (RDF) that was signed in 2016. This agreement aims to address the deeper problem in the SADC project beyond the delayed mandates – money. The RISDP carries a price tag of up to $50 billion, and the RDF – the instrument SADC has designed to help fund it – is meant to be capitalised at roughly $13 billion. Currently, member states fund less than 10% of SADC regional projects, making the RDF a key instrument for regional integration projects. Yet the Durban communiqué does little more than commend the member states that have already ratified the agreement establishing the fund and urge the rest to expedite the process. That same appeal, in essentially the same language, could have been taken from the previous summit in Antananarivo. Ratification, entry into force and operationalisation of the fund are in limbo, while the corridors, ports and power interconnectors the fund is supposed to finance remain uncompleted. Mirroring the delays in the free movement protocol, operationalising and fully capitalising the fund are distant goals, with only Angola Botswana, Zambia and Zimbabwe reportedly having ratified it so far.
This should alarm anyone who takes SADC’s industrialisation ambitions seriously. If the RDF is meant to be the key vehicle for financing corridor and cross-border infrastructure, then the implementation lag becomes a structural constraint that could prove insurmountable. Most SADC member states are already running fiscal deficits above the region’s own ‘3% of GDP’ convergence target. In countries like Zambia, Malawi and Mozambique, servicing existing debt absorbs so much revenue that little to nothing is left for essential spending on wages, education or health, let alone new capital commitments. Asking the same treasuries to also ratify and capitalise a new regional fund, on a voluntary basis and with no binding timetable or consequences for delay, is asking them to prioritise a future collective good over an immediate local fiscal squeeze. Absent a change in incentives, there is little reason to expect that this agreement’s ratification will move quickly enough.
The SADC institutional culture bears much of the blame for member states’ unwillingness to act decisively on key initiatives. Its instruments are overwhelmingly voluntary, and summit communiqués have long been criticised for setting ambitious targets with no enforcement mechanism attached. Countries are not called out for delays. Fixing the RDFs (and other stalled ratifications) requires more than repeated appeals. We need incentives and accountability mechanisms that make delays costly and progress visible. The SADC Secretariat should publish and regularly update a public ‘ratification scoreboard’ in which member states are named individually, thus creating obligations and reputational pressures that heads of state feel. As for the capitalisation of the RDF, the $120 million in contributions should be mandatory, with penalties for delays. Eligibility to benefit from the corridor and energy project pipelines that the fund will eventually finance should be conditional on a member state’s ratification status.
However, none of that, even if adopted immediately, would unlock capital this year. While the region waits for the fund to be ratified, other avenues need to be utilised. The SADC community should pursue project financing through loans backed jointly by member states as a bloc. A pooled or member-guaranteed borrowing structure would allow for cheaper capital for corridor and energy projects that no individual country could secure. SADC should also incentivise sovereign wealth funds in the region to invest in SADC regional projects. Member states that hold sovereign wealth funds should be actively incentivised, through preferential co-investment terms and guarantees provided collectively by SADC member states, to allocate a portion of that capital to SADC infrastructure.
These measures cannot substitute for fully delivering on the RDF. They should run in parallel. The theme SADC’s leaders have now adopted for two summits running acknowledges, correctly, that industrialisation cannot proceed without the physical connection of corridors, power and harmonised trade rules. What SADC has thus far not delivered is a financing architecture equal to that ambition, or an accountability mechanism to ensure the fund meant to underpin it is actually ratified in enough time to matter. When the heads of state next meet in Zambia for the 47th summit, the measure of progress should not be another communiqué reaffirming the importance of the corridors. It should be a list of member states yet to ratify the RDF agreement and concrete proposals for other financing arrangements ready to be signed within months. Anything less simply keeps SADC in the status quo of unfulfilled agreements.
