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Real Economy News in Real Time
R/€ = 18.98 Change: -0.03
R/$ = 16.75 Change: 0.02
Au 1808.53 $/oz Change: 7.93
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African economic integration still has a long way to go, reveals new report

25th May 2020 BY: Rebecca Campbell
Creamer Media Senior Deputy Editor

The African Development Bank (AfDB), the African Union Commission (AUC) and the United Nations Economic Commission for Africa (ECA) have jointly called for African countries to strengthen their economic integration. They made this call at the recent launch of the Africa Regional Integration Index 2019 (ARII 2019). This is the second such index to be produced, the first being ARII 2016. 

The ARIIs provided the latest available information on the state and development of regional integration in Africa as a whole as well as within each of the eight Regional Economic Communities (RECs) within the continent. The ARII 2019 showed that the level of integration remained quite low, with an average score for African countries of just 0.327 out of 1. Twenty African countries scored above this average but even the most highly integrated African country, South Africa, scored only 0.625.

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“This index is both a measurement exercise and a call to action; to build resilient economies through integration,” highlighted ECA Regional Integration Division director Stephen Karingi. “It will identify the solutions needed to truly build an integrated Africa.”

The ARII was scored using five fundamental dimensions, namely infrastructure, macroeconomic policy, productive capacity, trade and the free movement of people. It also covered factors such as competition policy, digital trade, investment and intellectual property. 

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The index established that the REC with the greatest level of overall integration was the East African Community. The REC with the lowest level of overall integration was the Southern African Development Community.

“To achieve an ‘integrated, prosperous and peaceful Africa, representing a dynamic force in the concert of nations’, this ARII report will support AU members states and RECs to address industrialisation and value addition priorities for the development of the continent,” affirmed AUC Economic Affairs Department acting director Jean-Denis Gabikini. The index had made it clear that a lot still had to be done to integrate African economies, and it would help identify the priorities for increased integration.

The ARII 2019 was released against the background of the Covid-19 pandemic. “[T]he present Covid-19 pandemic has reopened the question of whether enough is being done in advancing regional integration as a means to help Africa withstand systematic shocks such as the one being experienced today,” pointed out Karingi. “The crippling effects of Covid-19 illustrate the need for enhanced production of African finished goods and services that can readily be traded across the continent,” noted AfDB regional development and regional integration director Moono Mupotola.

Six key recommendations were made by ARII 2019. One was that regional production networks should be improved by augmenting national production, distribution and marketing capabilities. Another was that better technology, improved quality inputs and modern marketing methods be used to create innovative regional value-chains, in various sectors. A third recommendation was to completely implement the African Continental Free Trade Area so as to remove non-tariff barriers, which were a major obstacle to regional integration.

A further recommendation was that the competencies of African workers be improved to exploit contemporary and future technologies and production capabilities. In addition, public-private partnerships should be used to improve infrastructure, by means of thorough competition and transparency in acquisition and construction, and using innovative financing, including the use of national resources, as well as regional and global development funding. The sixth recommendation was to bring into effect the Protocol on the Free Movement of People, which would help boost tourism, trade and investment.  

EDITED BY: Creamer Media Reporter
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