Consultation with Think Tanks Supporting Africa’s AEC Johannesburg Integration: October 27 , 2013 Developing the AfDB Regional Integration Strategy (2014-2023) Moono Mupotola Division Manager Regional Integration and Trade African Development Bank
• Africa’s Integration • AfDB’s Mandate Context • Bank’s Framework for Supporting Regional RIS Integration • Results 2009 – 2012 • Challenges • Lessons learned Presentation Outline • Vision & Alignment with TYS RIS • Emerging Issues • Strategic Objectives 2014 – 2023 • Making the Bank’s Support to Aafrica’s Regional Issues for Integration More Relevant and Effective Consultation 2
Consolidating Africa’s small, fragmented markets. Unlocking Africa’s potential to exploit economies of scale, attract investment and facilitate value addition Addressing insufficient access to markets due Rationale poor infrastructure and non-tariff barriers to for trade. Regional Integrating producers into more productive Integration regional value chains Jointly manage trans-boundary natural resources. Addressing common cross-border issues such as security, climate change and health issues. 3
1999 – Regional Economic blocs 2007 – REC integration and harmonization 2017 - Continental Free Trade Area 2019 - Continent-wide Customs Union Continental Vision 2023 - Continent-wide African Common Market 2028 - African Economic and Monetary Union 4
• AfDB Charter gives priority to integration projects & programmes 1963 2000 • Economic & Regional Integration Policy Paper Regional 2008 • Regional Operations Framework Integration Bank’s 2009 • First Regional Integration Strategy (2009-2012) Mandate since 1964 • Regional Integration Strategy Papers for East, West, South and Central regions 2011 • Independent Evaluation of Multinational Operations (2000-2010) 2012 • RIS 2014-2023 2014 5
Ten Year Strategy (2013-2022): 5 Operational Areas : 1.Infrastructure Development 2. Regional Integration Bank’s 3. Private Sector Development Framework 4. Governance and Accountability for 5. Skills and Technology Supporting Regional Regional Integration Strategy (2009-2012): Integration 2 Pillars Pillar 1: Regional Infrastructure Pillar 2: Capacity Building RISP RISP RISP RISP (West) (Central) (East) (South) 6
What Did We Do Under the RIS 2009-2014? Invested in Soft Supported Infrastructure: Regional Public Invested in Hard Trade Facilitation: Goods: OSBP’s, Customs Infrastructure Modernization - Trans-boundary water (USD48.9% or UA1.76 Financial Integration resources billion of Bank Group’s (e.g. support to Loans and Grants in -support to knowledge establishment of West 2012) centres for agricultural African Monetary Zone research and extension -Transport -Water Payment System) -Power -ICT Capacity Building: for 7 RECs and RMCs ; AFTRA
Invested $ 2.7 billion for 3 years in transformative projects Selected Results Leveraged the Bank’s Convening power RIS 2009- Provided RPGs more 2012 efficiently 8
Intra-African trade has more than doubled, from $49 billion to $108 billion between 2005 and 2011 Intra-African Exports expanded to 16% at the end of last decade, up from 11% at the start of the decade Continental Progress has been made in the integration of Level financial markets Outcomes Adoption of the Programme for Infrastructure Development in Africa (PIDA) Tripartite FTA negotiated by RECs in Eastern and Southern Africa 9
o Overlapping mandates of integration blocs. o Weak implementation capacity at the regional and national levels. o Major infrastructure gaps. o Slow progress in eliminating non tariff barriers to trade. Challenges. o Limited capacity to implement common regional projects as well as differences in national priorities. o Differences in processes, procedures and policies among countries in a region. o Weak productive capacities. 10
Focus on the policy and institutional aspects of integration Need for increased political dialogue Lessons Learned Need for project preparation funding RIS Need for mobilizing private funding for 2009-2012 Regional Operations The availability of grant funding for RPGs far outweighs demand Need to be selective 11
Vision: To contribute to Africa’s integration process by developing infrastructure and policies that allow a seamless flow of goods, services, capital and people across African borders. Towards a New RIS New RIS will support the Bank Group’s TYS (2014- in realizing: a stable, integrated and prospering 2023) continent Competitive, diversified and growing economies The next emerging market and growth pole 12
Key Drivers of Regional Integration • Africa’s potential as a consumer market and investment destination: Rising middle class estimated at 355 million key driver for domestic growth Emerging • New resource discoveries : Potential for value addition, mineral Issues beneficiation and even financing infrastructure projects • The push towards industrialization and transformation • Integration of Africa’s producers into global value chains • Need for new & innovative funding sources to finance development. • Growing & youthful population: Demographic dividend • The need to adapt to climate change • Need to address the issue of fragility 13
Strategic Objectives • Unlocking Africa’s potential to enable the efficient flow of goods, services and people. • Bridging the hard-soft infrastructure New RIS continuum: Investments in infrastructure, (2014-2023) accompanied by sound policy measures and institutional aspects • Supporting economic integration: support to regional value chains development, regional financial integration, trade finance, etc. to boost productive capacities 14
What Should Africa do to: o fast-track regional integration? o successfully increase value addition and integrate into global value chains? o leverage its commodities for Issues industrialization, job creation and for economic transformation? Consultation o overcome lack of political will and to translate commitment into reality? New RIS o finance its regional integration and truly (2014-2023) drive its own agenda? o What policies are best suited to bring about Africa’s industrialization ? What should the role of the AfDB be in supporting Africa’s integration ? 15
AEC Side Event October 27, 2013 Thank you www.afdb.org African Development Bank
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