Arab Spring could Spur Growth through Regional Integration in North Africa, Says AfDB Study

03/05/2012
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In the wake of the Arab Spring, the emerging political landscape in North Africa promises to give new impetus to regional integration efforts, according to a new study from the African Development Bank (AfDB).  The report  - entitled, Unlocking North Africa's potential through Regional Integration - reviews the prospects for the region as new democratically-elected governments seek to promote inclusive growth and build institutions for good governance. The diversity of resource endowments in the region, coupled with the existing physical infrastructure, represent an important opportunity to further development through integration.

Efforts to promote regional integration in North Africa to date have often been constrained by political differences as well as diversity in economic performance, the pace of economic reforms and openness, and disparities in legal and regulatory frameworks. Overlapping preferential trade agreements also emerged as a constraint to regional integration efforts on the back of complex rules of origin and a large number of ‘behind the border’ barriers. Together, these impediments have increased transaction costs. Importantly, the existence of these barriers reflects weak commitment to the integration process, as national governments have failed to translate decisions taken at the regional level into action at the country level.

This study examines the key issues and challenges facing regional integration in the North African countries across a number of thematic areas including: (i) energy, (ii) climate change and environment, (iii) financial sector, (iv) trade facilitation and transport, (v) human development and, (vi) information and communication technology. It provides proposals for the Bank’s continued engagement in the region, geared towards exploiting the full potential of regional integration in North Africa for the promotion of a new, inclusive, sustainable economic growth model.