In the last five years, while the global economy struggled, African economies grew consistently at respectable rate of 5%. But, Africa could do better both in terms of growth acceleration and poverty reduction had it put effort to advance economic integration within its borders. The long-drawn recovery and further risk of economic hardships in the traditional trading partners of Africa suggest that policy makers need to refocus their attention to regional integration as a vehicle for sustainable and inclusive growth. Regional integration has multifaceted welfare benefits:
- It could be a source of opportunities in the trading of goods and services particularly those produced by small-holder farmers and small businesses whose growth is crucial for promoting inclusive growth.
- Unimpeded cross-border mobility of people could help large and medium-size firms to compete in the global market which would be the basis for industrial transformation of the African continent.
- Free movement of capital would reduce the cost of borrowing for investors as well as risk by offering diversification opportunities, etc.
Currently the evidence suggests that intra-African trade among regional economic communities is barely 10% which is half of what it is in Asia or Latin American countries. While the bulk of migration in Africa is within Africa, migration rates among Africans is the lowest in the world. This has certainly undermined labour market integration and by implication global competitiveness of firms in Africa. FDI within Africa hardly existed until recently and it is one of the lowest anywhere else in the world. Regional integration has another less emphasized but extremely powerful benefits for some countries: peace and security. Studies have shown that disputes cross borders are the major sources of strife, armed rebellion and low-intensity conflict in the continent. Regional integration could help eventually reduce ethnic tensions, political rivalries and inclusion of remote areas in the development process.
Thus, the session on “leveraging regional integration for inclusive growth and sustainable development” is expected to deepen our knowledge on the benefits and risk of regional integration in Africa, and offer insights into the following key policy challenges:
- How does regional integration facilitate inclusive growth and sustainable development?
- Why so little regional integration in Africa?
- Is there a need for reforming and retooling existing regional economic communities?
- Which dimensions of regional integration need emphasis and policy dialogue?
- What should multilateral and regional development institutions do to advance regional integration?
- Other related issues to regional integration