Regional integration key to Africa’s future competitiveness

By Daniel Hunter

The strides made by African economies in achieving economic growth must be accompanied by efforts to boost long-term competitiveness if the continent is to ensure sustainable improvements in living standards finds a new report, the Africa Competitiveness Report 2013.

The report, themed Connecting Africa’s Markets in a Sustainable Way, is jointly produced by the African Development Bank, the World Bank and the World Economic Forum. Regional integration is a key vehicle for helping Africa to raise competitiveness, diversify its economic base and create enough jobs for its young, fast-urbanizing population. The report maps out the key policy challenges in establishing closer regional integration:

- Closing the competitiveness gap: Africa’s competitiveness as a whole trails other emerging regions – especially in quality of institutions, infrastructure, macroeconomic policies, education and technological adoption – while big gaps persist between its highest and lowest ranked economies. The report assesses Africa’s success in creating the social and environmental factors that are necessary to address or mediate these gaps.

- Facilitating trade: Africa’s exports remain too heavily focused on commodities and its share of world trade remains low, despite numerous regional economic communities and domestic market liberalization. Intra-African trade is particularly limited. The report identifies cumbersome and non-transparent border administration, particularly import-export procedure, the limited use of information communication technologies (ICT) and persistent infrastructure deficit as major barriers to higher levels of regional integration. It also shows that these challenges are particularly pronounced for Africa’s landlocked economies.

- Building better infrastructure: Africa’s infrastructure deficit presents a serious impediment to regional integration, a problem that is made more pronounced by growth in consumer markets and urbanization. Developing adequate and efficient infrastructure will assist African economies to increase productivity in manufacturing and service delivery, contribute to improvements in health and education and help deliver more equitable distribution of national wealth. The report examines how developments in energy, transportation and ICT can be deployed to maximize the benefits of regional integration.

- Investing in growth poles: Defined as multi-year, generally public-private investments aimed at accelerating export facing-industries and their supporting infrastructure, growth poles represent important ways of building productive capacity and boosting regional integration through the attraction of investment. As the World Bank has invested in growth poles for a number of years, the report looks at how best practice can be deployed to deliver further benefits across the continent.

“Africa’s growth needs to be seen in the wider international context, where encouraging gains in economic growth belie an underlying weakness in its long-term competitiveness. Regional integration is key to addressing this weakness through the delivery of wider social and economic benefits and should be prioritized by Africa’s leaders as they look to ensure that Africa delivers on its promise,” said Jennifer Blanke, Chief Economist, World Economic Forum.
Source: internationaltrade.co.uk