The 2019 Annual Meetings of the African Development Bank Group will be held from 11-14 June 2019, in Malabo, Republic of Equatorial Guinea. Find out more
Reda El Merini participated in a think-tank networking session at the African Economic Conference in Johannesburg on Sunday, October 27 and shared his perspectives on what he believes Africa’s regional integration should entail. His thoughts are worth discussing.
Mr. Merini, during the think-tank networking session, you made a strong point on regional integration “as a means for Africa’s development.” Can you be more specific?
Regional integration starts with trade between the countries belonging to the Regional Economic Communities (RECs). The first thing we have to achieve is to ensure the best conditions for trade. Among these measures is to facilitate the trading conditions for the private sector. In other words, the private sector, small and medium-size businesses, should get the attention of the state which is and should remain a regulator. The private sector is the engine of the economy. That is why it should be strengthened. Even the logistical infrastructure for trade should be a matter of the private sector, which can do a better job than the public sector.
What does the African Development Bank need do differently to facilitate trade and to fast-track regional integration in Africa?
The AfDB should support all measures to encourage the private sector and the privatization of certain public services like port and airport management, in order to make these infrastructures more efficient. The Bank can stimulate trade between countries by helping them to put in place common reduced foreign trade procedures and documents, etc.
You also mentioned industrialization policy measures as well as investment facilities should be put in place to make Africa more attractive than other possible destinations. What policies are best suited to bring about industrialization?
One of the objectives of regional integration is to attract investment in order to create jobs and improve welfare. But, in addition to regional integration, a country should have an industrial strategy based on the comparative advantage it has identified and depending on the natural resources it holds. According to this strategy the country must provide the best investment conditions for domestic as well as foreign companies to invest in the country and create jobs. Specific fiscal and institutional measures should be taken to attract and facilitate investment.
Parallel to that, the AfDB can think about the creation of a supranational sovereign investment fund in which different countries of an REC could have shares in addition to the shares of the African Development Bank and private international institutions. This fund can be a kind of investment stimulator for industrial projects in one or more countries of an REC. Reflection on this instrument must be deepened.