AEC 2013 - Interview with Janvier Litse, Director, NEPAD Regional Integration and Trade, AfDB

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Janvier Litse is a veteran of the African Development Bank, having climbed through the ranks and having served in various senior management operational positions, including Acting Vice-President. As the new Director of NEPAD Regional Integration and Trade, he kindly accepted to share perspectives on how best our institution, in synergy with stakeholders – policymakers, researchers, think tanks as well as civil society organizations – would contribute to meeting Africa’s regional integration goals. Read his interview.

As the new Director, NEPAD and Regional Integration, what does the Bank need to do differently to facilitate trade and to fast-track regional integration in Africa?

Firstly, we need to scale up our support for soft infrastructure, which is an area where we have not done very well. Secondly, we need to place emphasis on effective implementation, by supporting capacity enhancement in RMCs, RECs and other players such centres of excellence and private sector bodies.

There is also the important area of “measuring results” – what gets measured, gets done. The Bank needs to improve its effectiveness in measuring results and disseminating them to stakeholders. It should be noted that regional integration is an ongoing process rather than a one-off event. In this context, effective measurement of results will enable us to better assess progress. Dissemination of these results will help to communicate the Bank’s contribution to Africa’s integration to its stakeholders. As way of improving the results monitoring framework for regional integration, the Bank will be implementing the System of Indicators to Monitor Regional Integration approved by the Board earlier this year.

Having said that, we should acknowledge the things which we have done well in the past and which need to be continued. The formulation of the continent-wide Programme for Infrastructure Development in Africa (PIDA) and its adoption by Heads of State in 2012 is a case in point. We have also provided support to infrastructure project preparation aimed at bringing projects to bankability. This is essential for unlocking financing for the projects. In the area of soft infrastructure we have provided support aimed at removing trade facilitation bottlenecks at the borders, through one-stop border posts, and addressing non-tariff measures along transit corridors. We have also provided trade-related capacity building support to RECs, as in the case with the COMESA-EAC-SADC Tripartite Capacity Building Project, approved by the Board two weeks ago.

These are positive things and need to be scaled up in order to facilitate trade and fast-track regional integration in Africa.

As former Director, West Africa Regions, and also having had the opportunity to deliver on several Bank infrastructure projects continent-wide, in your view what will it take for Africa to successfully integrate into regional and global value chains?

To successfully integrate into regional and global value chains we first need to address the fundamental bottlenecks to competitiveness such as infrastructure and trade facilitation issues as well as the business environment. Participating in regional and global value chains demands reliability of supply and ability to conform to quality standards. You cannot therefore successfully participate in a value chain if there is uncertainty about your delivery times because your container gets entangled in inefficient border-crossing procedures. Efficient connectivity, achieved through investments in hard and soft infrastructure, is at the heart of regional integration and was central to the success of regions such as East Asia where value chains have flourished.

Secondly, we need to systematically identify the components where Africa can compete and develop targeted measures to strategically develop those activities. A fundamental error in Africa’s efforts at industrialization is that most countries are aiming at exporting final products rather than components as part of a value chain. The reality is that we cannot export airplanes, but we may be able to export leather for a seat of a plane.

What should multilateral development banks, such as the AfDB, do differently to support Africa’s integration? What type of relationship should they have with key players in regional integration (e.g. pan-Africa bodies [AUC, ECA], RECs, academia and business associations)?

The Bank needs to enhance its networking with key players and stakeholders in regional integration, including the private sector and think tanks. The Bank’s increased presence in the field will play a vital role in enhancing our partnerships with the various stakeholders.

What industrialization policy measures and investments need to be put in place for Africa to be more attractive than other possible destinations? What policies are best suited to bring about industrialization?

Africa has an abundance of natural resources such as minerals, forest products, and vast agricultural land, which have not been adequately leveraged for industrialization. We need to vigorously pursue strategies aimed at promoting value-addition to our resources in order to stimulate industrialization. In other words, Africa needs to play to its strengths. Nevertheless, not all African countries are resource-rich. Countries should therefore think beyond goods production and explore other sectors such as services. Countries such as Mauritius have demonstrated that services such as financial services, tourism, information and communication technologies can play an important role in a country’s industrial transformation.

Besides exploiting natural resources, Africa needs to deepen its financial markets in order to improve access to capital to finance its industrialization. In this regard, financial integration, which is one facet of regional integration, can play a role by facilitating movement of capital through stock exchanges cross-listing.

Thirdly, as China moves into higher rungs of the value chain due to increasing labour costs, it will shed an estimated 85 million jobs. Africa needs to pursue policies that will enable it to benefit from this industrial migration from China.

Finally, Africa needs to negotiate for more meaningful market access to support its quest for industrialization. For instance, tariff escalation whereby developed countries impose prohibitive trade taxes on processed products but zero tariffs on unprocessed ones perpetuates the tendency to export raw materials and has prevented African countries from climbing the value chain. Africa needs to find its voice to shape the global trading regime in a way that will support its industrialization needs.

How can Africa finance its regional integration to truly drive its own agenda?

Africa needs to increasingly mobilize internal resources, which have traditionally been deposited in low-yielding accounts overseas, to fund its integration needs. The creation of Africa 50 Fund by the Bank and its partners is a major milestone in his regard and it will help in mobilizing such resources to fund infrastructure projects in Africa.

What should be the Bank’s key message at Johannesburg on accelerating Africa’s transformation through regional integration?

The case for regional integration has been adequately argued and a reasonable degree of consensus exists on the virtues of integration. However, the key challenge is implementation. The AEC in Johannesburg offers an opportunity for the Bank to network with think tanks and other critical stakeholders to find practical solutions on the “hows” of regional integration on the continent. Africa has reached a turning point, and as Bank Group President Donald Kaberuka has rightly put it, “There is need to attain the tipping point for sustainable economic transformation.”

Regional integration is a key ingredient to attain that tipping point and we call upon all stakeholders to make a step change in their respective roles to accelerate regional integration on the continent.