AEC 2013 - Interview with Moono Mupotola, Division Manager, Regional Integration and Trade at AfDB
There is a lot to tell about the African Development Bank’s (AfDB) role in Africa’s regional integration. Moono Mupotola, who, for the past four years, has pulled out all stops to deliver on the Bank’s vision in this area, says: “There is a wealth of ideas on how to integrate and boost intra-African trade and there is no need to re-invent the wheel.”
You have led the Bank’s regional integration and trade division activities for the past few years. Can you take stock of the institution’s accomplishments in this area?
My assessment of the Bank’s accomplishments in this area is that we have made substantial progress, although there are still some challenges. Our main accomplishments have been, of course, our support to transport corridors, to project preparation and energy. These are key bottlenecks that affect the productive capacity and hence the competiveness of our economies.
Specifically with respect to ONRI [NEPAD and Regional Integration Department], we have provided support through studies particularly to the energy and transport sectors, therefore complementing our investments in these sectors. For instance, the recently concluded Power Sector report specifies capacity building support as a means to boost regional energy trade. Similarly, the Senegambia Bridge and Namanga Border post studies will support our investments in the transport sector. We are also working, with OITC [Transport and ICT Department], on finalizing the Transport and Trade Facilitation framework, which will ensure that hard and soft components are adequately streamlined in project design.
We are also working with partners in West Africa to facilitate collection of non-tariff measures (NTM) and other trade data, in order to address the arbitrary application of restrictive regulatory practices along trade routes, and to make trade more transparent resulting into reduced costs to traders.
To this end, we have enhanced our partnerships both across departments with the Bank as well as with external strategic partners, such as RECs and specialized bodies, such as: the World Customs Organization, United Nations Conference on Trade and Development, the African Union, UNECA [United Nations Economic Commission for Africa], Enhanced Integrated Framework and World Trade Organization.
Our work program has grown substantially to cover areas such as trade, finance and financial integration. Under the latter, we have provided support for the establishment of West African micro-finance payment systems and the provision of capacity building of capital markets.
Can you name few Bank success stories on Africa’s regional integration and how the Bank needs to work differently to have more such stories with a view to meet Africa’s transformational agenda?
In the trade area, one of our major successes is the COMESA-EAC-SADC Tripartite Capacity Building Programme, which was approved by the board three weeks ago. This unique project supports market integration, capacity development and industrial capacity development. The project also includes provision of tailored technical assistance targeted at supporting the tripartite negotiations processes.
The tripartite arrangement aims at harmonizing the trade regimes and undertaking joint infrastructure and industrialization programs in three RECs. It is therefore a major milestone in Africa’s integration efforts as it will consolidate a huge market of 587 million consumers, 3 RECs and 26 countries, which is essentially half the continent.
The second main success in the trade area is the creation of Africa Trade Fund (AfTra) in 2012. AfTra is a responsive technical assistance facility for RMCs and RECs to participate in and benefit from regional and international market opportunities. AfTra has been established with $15 million seed funding from the Canadian Government, and the Bank aims at growing it into the biggest trade fund in Africa. This fund will enable us to better respond to the capacity challenges faced by the RECs and RMCs.
Already, Liberia and the COMESA Secretariat have become the first beneficiaries of this technical assistance fund after two projects: Programme of Assistance to Trade Support Institutions in Liberia (PATSIL) and COMESA Trading for Peace Project were approved in June 2013.
A third key success is in the area of results measurement. As a way of improving the results monitoring framework for regional integration, we have designed and will be implementing the System of Indicators to Monitor Regional Integration, approved by the CODE earlier this year.
Fourth, we have supported COMESA in the development of their macro-economic convergence framework endorsed by central bank governors.
Finally, our study titled: “Structured Finance: Conditions for Infrastructure Bonds in Africa” has been well received as it provides practical recommendations on deepening financial markets in Africa for infrastructure projects.
Results of Africa’s regional integration activities are reported to have been less impressive than expected, with intra-African trade estimated at between 12 percent and 16 percent. What should be the new approach?
The new approach should place more emphasis on the soft constraints to regional integration. These interventions cost relatively less to implement but the benefits can be phenomenal.
African countries and RECs need to depart from the business as usual approach of paying lip-service to regional integration and start paying more attention to implementation. There is a wealth of ideas on how to integrate and boost intra-African trade and there is no need to re-invent the wheel. However, implementation has been the Achilles’ heel. Indeed, some of the things that need to be done do not require huge sums of money. A case in point is the non-implementation of the Yamoussoukro Agreement, which could have facilitated cheaper air travel across the continent and significantly reduce the cost of doing business.
Finally, we need to embrace a more developmental approach, which goes beyond facilitating trade, but includes empowering countries to unlock their productive capacities in line with their resources. In this regard, attention should be placed on value-addition and the promotion of Africa’s participation in regional and global value chains. Without pragmatically addressing productive capacity issues, expansion of trade, whether intra-regional or global, will remain a pipe dream.