Consultation with Think Tanks Supporting Africas AEC Johannesburg - - PowerPoint PPT Presentation

Supporting Africa’s Integration: Developing the AfDB Regional Integration Strategy (2014-2023)

Moono Mupotola Division Manager Regional Integration and Trade African Development Bank

Consultation with Think Tanks AEC Johannesburg October 27 , 2013

Presentation Outline

• Africa’s Integration
• AfDB’s Mandate

Context

• Bank’s Framework for Supporting Regional

Integration

• Results
• Challenges
• Lessons learned

RIS 2009 – 2012

• Vision & Alignment with TYS
• Emerging Issues
• Strategic Objectives

RIS 2014 – 2023

• Making the Bank’s Support to Aafrica’s Regional

Integration More Relevant and Effective

Issues for Consultation

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Rationale for Regional Integration

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 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 poor infrastructure and non-tariff barriers to trade.  Integrating producers into more productive regional value chains  Jointly manage trans-boundary natural resources.  Addressing common cross-border issues such as security, climate change and health issues.

Continental Vision

1999 – Regional Economic blocs 2007 – REC integration and harmonization 2017 - Continental Free Trade Area 2019 - Continent-wide Customs Union 2023 - Continent-wide African Common Market

2028 - African Economic and Monetary Union

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Regional Integration Bank’s Mandate since 1964

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1963

• AfDB Charter gives priority to integration projects

& programmes 2000 • Economic & Regional Integration Policy Paper 2008 • Regional Operations Framework 2009 • First Regional Integration Strategy (2009-2012) 2011

• Regional Integration Strategy Papers for East,

West, South and Central regions 2012

• Independent Evaluation of Multinational

Operations (2000-2010) 2014

• RIS 2014-2023

Bank’s Framework for Supporting Regional Integration

Ten Year Strategy (2013-2022): 5 Operational Areas: 1.Infrastructure Development

• 2. Regional Integration
• 3. Private Sector Development
• 4. Governance and Accountability
• 5. Skills and Technology

Regional Integration Strategy (2009-2012): 2 Pillars Pillar 1: Regional Infrastructure Pillar 2: Capacity Building RISP (Central) RISP (East) RISP (South) RISP (West)

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What Did We Do Under the RIS 2009-2014?

Invested in Hard Infrastructure

(USD48.9% or UA1.76 billion of Bank Group’s Loans and Grants in 2012)

• Transport -Water
• Power -ICT

Invested in Soft Infrastructure:

Trade Facilitation: OSBP’s, Customs Modernization Financial Integration (e.g. support to establishment of West African Monetary Zone Payment System) Capacity Building: for RECs and RMCs ; AFTRA

Supported Regional Public Goods:

• Trans-boundary water

resources

• support to knowledge

centres for agricultural research and extension

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Selected Results RIS 2009- 2012

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 Invested $ 2.7 billion for 3 years in transformative projects



Provided RPGs more efficiently  Leveraged the Bank’s Convening power

Continental Level Outcomes

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 Progress has been made in the integration of financial markets Adoption of the Programme for Infrastructure Development in Africa (PIDA) Tripartite FTA negotiated by RECs in Eastern and Southern Africa

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Challenges.

• Overlapping mandates of integration blocs.
• Weak implementation capacity at the regional

and national levels.

• Major infrastructure gaps.
• Slow progress in eliminating non tariff barriers to

trade.

• Limited capacity to implement common regional

projects as well as differences in national priorities.

• Differences in processes, procedures and policies

among countries in a region.

• Weak productive capacities.

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Lessons Learned RIS 2009-2012

Focus on the policy and institutional aspects of integration Need for increased political dialogue Need for project preparation funding Need for mobilizing private funding for Regional Operations The availability of grant funding for RPGs far

• utweighs demand

Need to be selective

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Towards a New RIS (2014- 2023)

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. New RIS will support the Bank Group’s TYS in realizing:  a stable, integrated and prospering continent  Competitive, diversified and growing economies  The next emerging market and growth pole

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Emerging Issues

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• Africa’s potential as a consumer market and investment

destination: Rising middle class estimated at 355 million key driver for domestic growth

• New resource discoveries : Potential for value addition, mineral

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

Key Drivers of Regional Integration

New RIS (2014-2023)

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• Unlocking Africa’s potential to enable the

efficient flow of goods, services and people.

• Bridging the hard-soft infrastructure

continuum: Investments in infrastructure, 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

Strategic Objectives

Issues for Consultation New RIS (2014-2023)

What Should Africa do to:

• fast-track regional integration?
• successfully increase value addition and

integrate into global value chains?

• leverage its commodities for

industrialization, job creation and economic transformation?

• overcome lack of political will and to

translate commitment into reality?

• finance its regional integration and truly

drive its own agenda?

• What policies are best suited to bring about

Africa’s industrialization?

What should the role of the AfDB be in supporting Africa’s integration?

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Thank you

www.afdb.org

African Development Bank

AEC Side Event October 27, 2013