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AfDB Group’s Regional Integration Strategy
The AfDB's E-Consultation on the Regional Integration Strategy - Have your Say!
The African Development Bank Group is in the process of developing a new Regional Integration Strategy (RIS) to replace the previous Regional Integration Strategy whose validity expired in 2013. The Strategy will be combined with a Policy on Economic Cooperation and Regional Integration, as the current policy, developed in 2000, also needs to be updated. The RIS will guide the Bank’s work in regional integration over the next 10 years (2014-2023). The Strategy will be aligned to the Bank Group’s Ten-Year Strategy (TYS), which reaffirms the Bank’s mandate in promoting regional integration in Africa by identifying regional integration as one of the five core operational priorities over the decade 2013-2022. The other core operational priorities are infrastructure development, private sector development, governance and accountability, and skills and technology.
Many new thematic strategies, with relevance for regional integration have also been developed and need to be reflected in the Bank’s approach to regional integration. At the continental level, the Heads of State adopted the Boosting Intra-African Trade (BIAT) agenda within the framework of the New Partnership for Africa’s Development (NEPAD) and urged all development partners and stakeholders to help operationalize it. Further, in January 2012, the African Union approved the Programme for Infrastructure Development in Africa (PIDA) and called upon member states to support its implementation. Therefore, the RIS will help operationalize the TYS as well as to guide the Bank’s support to the regional member countries (RMCs) and regional economic communities (RECs) in the area of implementation of regional infrastructure programs and the BIAT. The RIS will also provide guidance for the formulation of the regional integration strategy papers, the Bank’s programming instruments, which are also due to expire by 2015. Besides, several regional economic communities are also adopting new strategies to overcome their challenges, and are looking up to organizations like the Bank for continued financial and technical assistance. Moreover, at the global level, many initiatives such as the recently concluded WTO Agreement on Trade Facilitation adopted in Bali in December 2013 signify increased international attention to foster greater global integration of developing countries. The development of the RIS is, therefore, opportune.
The formulation of the RIS is led by the AfDB’s NEPAD, Regional Integration and Trade Department (ONRI), with active participation from across the Bank. The Department is currently consulting with a broad range of stakeholders on the RIS. Already, the draft document has benefitted from a number of internal reviews, including departmental and bank-wide focal points. The internal reviews will continue throughout the formulation of the Strategy. Further, preliminary consultations on the RIS were held with a broad range of prominent think tanks on the margins of the African Economic Conference in Johannesburg in October 2013. Formal consultations with external stakeholders are planned with all the AU-recognized RECs, the African Union Commission, the NEPAD Planning and Coordination Agency and the UN Economic Commission for Africa, as well as selected specialized private sector regional institutions such as corridor logistics bodies and regional business councils. A validation workshop involving broader participation of stakeholders is also planned.
We are seeking your inputs, in particular on the questions below:
- Investment in regional infrastructure
The infrastructure deficit is one of the most binding constraints to Africa’s growth and competitiveness. Currently, limited supply of dependable energy slows production; the inadequacy of good roads and shortage of well-developed ports slows the timely delivery of products while antiquated/insufficient and costly access to information and communication technologies (ICTs) limits the continent’s integration and competitiveness in the global market. Addressing these issues through a regionally integrated approach to infrastructure development will help Africa to form large, competitive markets to replace the current small, isolated, and inefficient ones.
Q: In what ways can the Bank best support and facilitate investment in regional infrastructure?
- Enhancing the governance and policy environment of integration
Physical interconnectivity alone will not be sufficient for efficient integration. The “soft” aspects of regional integration equally need to be addressed, especially in the area of trade in goods and services. In the last decade, Africa’s trade growth outperformed the global average. However, much of the growth has been driven by rising global demand for primary commodities and a rebound in prices from their lows in the early part of the decade. Within the continent, the level of intra-African trade remains low in comparison with other regions. Africa has the lowest degree of market integration among the seven global regions with only 16% of its trade destined within the continent. Manufactured goods make up nearly half of intra-African exports while these goods make up only a fifth of Africa’s exports to the rest of world. Fuels and mining products make up 68% of Africa’s exports to the global market, whereas these goods represent only about a third of intra-African exports.
Q: How should the Bank approach the soft issues of integration and cooperation and what should it do differently?
- Targeted support for effective implementation
Africa’s framework of regional and continental policies is fundamentally sound. However, these policies have not been thoroughly and consistently translated into national legislation, even after treaties are signed and ratified. Even in cases where policies do appear in national legislation, too often they are not enforced. An extensive review of more than two dozen regional projects and development programs revealed that weak policy alignment and harmonization, not just inadequate funding, were the principal drags on efficiency. In many instances, these inefficiencies cost Africa billions of dollars – money needed to close the financing gap in several areas of its development.
Q: What should the Bank’s role be in helping countries effectively participate in regional integration and in supporting the RECs and specialized institutions to better implement the regional integration agenda?
- Enhancing productive capacity
There is an opportunity for Africa to create millions of new, decent (productive, well-paid and secure) private-sector jobs in the next decade, which could pave the way for sustained social and economic development. For the private sector to thrive and help reduce poverty by creating sufficient quantities of new jobs, several minimum conditions need to be in place. These include: the rule of law, good “hard” and “soft” infrastructure, a stable macroeconomic environment, an educated, skilled and healthy workforce, and access to financial services. Further, for the private sector in Africa to be globally competitive, leading to significantly increased productive capacity, and drive intra-African as well as multilateral trade, the deepening of financial markets, the expansion of access to higher education and training are critically important.
Q: How should the Bank’s interventions in regional integration support the private sector in order to boost Africa’s productive capacity and job creation?
- Stabilizing fragile regions
Fragile situations and conflicts sometimes do not coincide with national boundaries. This phenomenon goes beyond the notion of “spillover” from national conflict through refugees, for example; it goes to the impact of regional ethnic, geographical or historical divisions. Examples include the Horn of Africa, the Great Lakes Region and the Sahel. Well-designed regional programs can help address sources of fragility located in several bordering countries.
Q: How should the Bank best support fragile regions?
- Providing selected regional public goods (RPGs)
Regional public goods (RPG) are goods or services or resources whose benefits/costs are shared by neighbouring countries or a group of countries within the region (transnational attribute). The benefits of pure RPGs are “non-rival” (i.e. one country’s consumption does not subtract from the amount available to other countries) and “non-excludable” (no country in the region can be excluded from benefiting, except at a prohibitive cost).
Q: What kind of RPGs should the Bank focus on providing and how should it do it?