On 15th November 2008 in Strasbourg, France, the European Commissioner for Development, Louis Michel and their excellencies Mr Sindiso NGWENYA, Secretary General of COMESA, Ambassador. Juma Volter MWAPACHU, Secretary General of the EAC, Mr Mahboub MALIM, Executive Secretary of IGAD, and Mr Callixte d'Offay, Secretary General of the IOC, collectively signed the 10th European Development fund (EDF) Regional Strategy Paper and Regional Indicative Programme (RSP/RIP) for the Eastern and Southern Africa and Indian Ocean (ESA-IO) region. This agreement puts 645 million Euros from the 10th European Development Fund at the disposal of the four Regional Organisations to support the regional integration process. Implementation, as for the 9th EDF, will be coordinated through the Inter-Regional Coordinating Committee (IRCC), to contribute to the harmonization of policies in line with the recommendations of the African Union. The agreement also provides for the European investment Bank to contribute to the Regional Strategy Paper by operations financed from the Investment Facility and/or from its own resources.

The four Regional Organisations (ROs), COMESA, EAC, IGAD and IOC, had agreed since the 9th European Development Fund to work together in respect of the European union’s support to the regional integration process. While the main drivers are the COMESA and the EAC, the other two ROs, IGAD and IOC, are both focused on specificities of their Member States and follow COMESA on the regional economic integration agenda.

The Member States which form part of the ESA-IO region are heterogeneous in terms of size, economic structure, as well as resources endowment but they however share a common objective to address poverty reduction through regional economic integration and trade. This has been clearly reiterated by the presence of the highest executives of the four ROs to sign the EUR 645 million 10th EDF RSP/RIP with the European Commission in Strasbourg.

The regional integration process in ESA-IO was institutionalised in the late seventies and evolved into the formation of Regional Organisations that were attributed with mandates to address specific issues, with ultimate common development objectives. COMESA and EAC pursue a regional economic integration agenda. COMESA launched its Free Trade Area in 2000 and is due to launch its Customs Union. EAC launched its Customs Union in 2005 and is scheduled to launch its common market by 2010.

The four ROs and the European Commission acknowledge that the on-going negotiation of a comprehensive ESA EPA (Economic Partnership Agreement) and EAC EPA constitute a challenge and a further opportunity to strengthen the process of regional integration.

The overall objective of the 10th EDF ESA-IO RSP/RIP is to contribute to the eradication of poverty in member countries and assist them in attaining the MDGs, as enshrined in the ACP-EC Partnership Agreement, by supporting economic growth and developing trade. Specifically the 10th EDF resources are meant to support the regional integration agendas of the ROs; to strengthen regional cooperation and to support the integration of the region into the global economy.

The 10th EDF EUR 645 million envelope will gather interventions under two focal areas: Regional Economic Integration covering regional integration policies, trade and EPA, and regional sector policies, (Focal Area 1); and furthering the Regional Political Integration/Cooperation Agenda (Focal Area 2), through the development of a series of flanking measures aimed at assisting the region to tackle regional political problems in a coordinated fashion.

Focal Area 1 will draw some 85% of the 10th EDF resources to support deepening regional integration by fully implementing the Customs Unions and moving towards common internal markets (and eventually monetary unions), covering initially sub-regions and ultimately the whole ESA-IO region, through the implementation of the necessary regulatory framework, providing financial support for the trade liberalisation process and its possible economic and fiscal costs. It will also aim at leveraging funds for trade-related infrastructure to deepen regional integration and ensure the sustainable management of the natural resources of the region as a core asset for livelihood systems so that it provides a basis for sustainable food security.

As far as possible the ROs will make use of Contribution Agreement for aid delivery. This instrument enforces full ownership with the RO, along the premises of the Paris Declaration on Aid Effectiveness, to use the funds according to the RO’s own regional integration and development strategy. For instance COMESA has used very effectively the Contribution Agreement under the 9th EDF Regional Integration Support Programme. COMESA has been the first regional organization, to avail of this modality, now seen to be a success.

Focal Area 2 can mobilise up to 10% of the resources and aims at strengthening the political integration/cooperation process in the ESA region by building a coherent regional view on the concept of good governance, establishing regional mechanisms for early warning, conflict prevention, management and resolution, post-conflict reconstruction, and overall capacity building in the areas of peace and security.

Some interventions are also foreseen in non-focal areas such as capacity building, support to the inter regional coordination committee (IRCC),involvement of Non-State Actors to mention but a few.