Scholars tends to acknowledge that MNCs have a large contribution to make in economic integration. For example, research on the Association of Southeast Asian Nations has shown that member states lead regionalism through both policy and public enterprises that stimulate and promote the development of private companies.

However, there is little research, particularly on Africa, that looks at the convergence of foreign policy and MNC strategy in regional integration. The research that does exist still focuses largely on the politics of the relationships involved, rather than the impact of MNCs’ contributions. Furthermore, the scholarship that has been conducted on Africa tends to focus on MNCs that originate in higher income countries.

In their recent paper, Professor Nshimbi and Dr Mkhabela assess the intersections between South Africa’s foreign policy and the behaviour of the country’s MNCs. Using historical, company archival, and textual data, their article explains the rationale behind focussing on MNCs as agents of continental integration.

To demonstrate their findings, they use the case studies of two African MNCs operating in the continent:  Shoprite Holdings Limited and Standard Bank Limited. They consider how these companies pursued cross-border investments and the implications for policy goals of integration.

Professor Nshimbi and Dr Mkhabela used Knill’s convergence theory to inform their work. This theory discusses the extent to which state policies and the strategies of MNCs become similar over time. The focus for the researchers was comparing the goals of South African foreign policy and MNC corporate expansion strategy.

They also wanted to avoid the pitfalls of previous research, which has tended to use a colonial analytical framework, depicting South African companies as playing a sub-imperial role, accelerating South Africa’s economic growth while engendering uneven regional development. It has also ignored the multilateral and voluntary nature of integration, the role of South African MNCs outside the country, and the role of African states in laying out the foundation for mutually beneficial regional integration measures.

South Africa’s post-apartheid foreign policy has emphasised continental integration at several levels. Firstly, South Africa was instrumental in drafting a revised agreement within the Southern African Customs Union. The draft established joint institutions and a development-oriented distribution of customs and excise revenue between its members.

In 2011, South Africa supported the goal to transform the Union from a solely monetary and customs union to an integrated organisation to promote regional economic development. They would develop a program on cross-border industrial development and better facilitate cross-border trade.

Further, South Africa took membership of the Southern African Development Community in 1992. It supported the Community’s belief in the liberalisation of intra-regional trade and investment. South Africa’s policy on region-based cross border development of supply chains and intra-regional trade was particularly important in this context.

In 2015, the country also supported the establishment of a free-trade area linking the Southern African Development Community, the Common Market for Eastern and Southern Africa, and the East African Community under the Tripartite Free Trade Area. The Tripartite Free Trade Area was considered an important milestone toward the conclusion of negotiations for the establishment of the African Continental Free Trade Area, which was launched in 2021.

These examples demonstrate that South Africa’s foreign policy has been committed to the goal of regional and continental economic integration. Their adopted policies support the mutual reinforcement of intra-continental trade and investment, the development of logistics infrastructures, the reduction of customs delays for goods and the establishment of regional supply chains.

So, what role do MNCs have to play?

South Africa’s 30-year National Development Plan 2030 proposes bringing business closer to foreign policy making. This approach acknowledges that MNCs are key actors in the international political economy and that governments should engage them to reap the benefits of their activities. Indeed, South Africa’s MNCs have independently executed expansion strategies that practically implement integration. Professor Nshimbi and Dr Mkhabela use two cases studies, Shoprite Holdings Limited and Standard Bank Limited, to show how leading businesses in Africa can ‘stitch’ the continent together.

Although Standard Bank’s presence on the continent dates back to the colonial era, it adopted a post-colonial expansion strategy after it was weaned off from British control. Now, Standard Bank has operations in 19 African countries, and its expansion has depended on its ability to integrate disparate markets. It has facilitated trade and market integration within and beyond the continent and supported the aspirations of South African companies seeking growth across Africa. For example, in 2016, the bank hosted conferences with clients from sub-Saharan Africa to promote inter-regional investment opportunities.

Similarly, the way in which South African grocery chain Shoprite pursued a post-Apartheid expansion strategy also bolstered international trade. In 1995, the business expanded into Zambia and subsequently became a major trader, exporting South African products, and importing others to satisfy the market it was cultivating.

During the financial year ending 2002, Shoprite distributed over 6700 products from over 230 South African producers. This necessitated the establishment of logistical infrastructure, which was set up for goods to reach distant markets. This encouragement of South African manufacturers was key to the success of Shoprite’s operations beyond the country’s borders. The business also advocated for market integration and criticized trade barriers, supporting various intra-continental trade agreements.

These examples show that MNCs can be central in bringing about African economic and political integration, and that their goals broadly align with domestic foreign policy. However, the dearth of research on the subject suggests that policymakers and corporate strategists lack reference sources to help them craft strategies to advance their interests and the wider goal of African integration.

Nevertheless, the convergence of state policy and corporate expansion strategies are methodologically discoverable. Further research should articulate the role that intra-continental MNCs can play in turning the aspirations of the African Continental Free Trade Area into reality. To achieve their goals, African Union member states should ensure that they design foreign policies that align the interests of MNCs with national and continental goals of integration.