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African Development Report2014 African Development Report African the African Development report for 2014 is devoted to Africa’s key economic and political aspiration—the integration of the continent. fifty years after it became a pillar of Africa’s apex organizations, including that of the African Development Bank, African Development the building blocks for regional integration as well as policies and strategies are now well in place, what remains is institutional building and committed implementation at the national and regional levels. this will require political resolve and heightened institutional capacities. the report’s main conclusion is that regional integration is still a relevant pillar for Africa’s development, Report 2014 although the global context has changed greatly since the continental goal was first introduced in the 1960s. Regional Integration for Inclusive Growth in 2013, the African Development Bank adopted its new ten-Year Strategy, “At the center of Africa’s transformation” which 2014 once again reinforces the importance of regional integration for its work. As Africa looks ahead with confidence, the Bank will continue to be a keen supporter of all possible efforts to bring Africans and their economies together. this will be reflected in its support to infrastructure development, cross-border and international trade, governance and related policies, as well as capacity Inclusive Growth for Integration Regional building. the Bank’s decentralization program will ensure that it has a presence in all regions of the continent and will continue to actively support the regional integration agenda, including through partnerships with regional member countries, and the private sector in and outside the continent. AfricAn Development BAnk immeuble du centre de commerce international d’Abidjan CCIA Avenue Jean-paul ii 01 Bp 1387 Abidjan 01, côte d’ivoire tel: (225) 20 26 10 20 email: [email protected] / [email protected] ii African Development Report 2014 Regional Integration for Inclusive Growth African Development Report 2014 Regional Integration for Inclusive Growth Copyright © 2014 African Development Bank Immeuble du Centre de commerce International d’Abidjan CCIA Avenue Jean-Paul II 01 BP 1387 Abidjan 01, Côte d’Ivoire Tel: (225) 20 26 10 20 Email: [email protected] / [email protected] Rights and permissions All rights reserved. The text and data in this publication may be reproduced as long as the source is cited. Reproduction for commercial purposes is forbidden. The African Development Report 2014 is a production of the Development Research Department. The findings, interpretations, and conclusions expressed in the Bank’s publications are entirely those of the author(s) and do not necessarily represent the view of the African Development Bank, its Board of Directors, or the countries they represent. Designations employed in this Report do not imply the expression of any opinion, on the part of the African Development Bank, concerning the legal status of any country or territory, or the delineation of its frontiers. Working papers are available online at www.afdb.org Printed by Phoenix Design Aid A/S, a CO2 neutral company accredited in the fields of quality (ISO 9001), environment (ISO 14001) and CSR (DS 49001) and ap- proved provider of FSC™ certified products. Printed on environmentally friendly paper without chlorine and with vegetable-based inks. The printed matter is recyclable. iv Foreword The theme of the African Development Report 2014, The Report also looks at the institutional challenges “Regional Integration for Inclusive Growth,” recognizes facing Regional Economic Communities and how they that regional integration is not an end in itself, but rather could be overcome. Much effort will be needed to ensure a tool for enhancing economic growth and fostering that strategies and forward planning do not remain on inclusion – within and between countries. After decades the drawing board. It is thus notable that Regional Eco- of relative stagnation, Africa has shown a steady upward nomic Communities are already adopting rules-based improvement in performance in the past decade and mechanisms to improve implementation through better a half. Average growth has been about 5 %, while the monitoring and evaluation, dispute settlement, and ca- value of intra-African trade has increased fourfold over pacity building. the last decade to reach USD 130 billion. This Report discusses the regional opportunities that have come with I would like to recommend this Report to all individuals this growth momentum, including the development and groups interested in the challenges and opportunities of regional supply networks and trade in intermediate of Africa’s regional economic integration. The Report goods within Africa’s regional and global value chains. takes a much broader view than previous analyses, look- The Report also looks at the hard and ‘soft’ infrastructure ing especially at how regional integration can ensure that required to connect markets, enhance competitiveness, Africa’s recent growth is sustained, that it is inclusive, strengthen and deepen financial systems, and position and that ultimately it leads to structural transformation. Africa as a home for global business. The Bank will continue to play a leading role in fostering Africa’s economic integration while assisting Regional The Report therefore undertakes a careful examination Economic Communities in their quest to create vibrant of the opportunities available to countries and regional and attractive regional markets, and to ensure that all economic communities in bringing about sustained countries in the region, including landlocked countries growth and shared prosperity. It is, however, not obliv- and fragile states, benefit from links to global markets ious to the challenges facing the continent. The Report and intra-African trade. notes that growth based on resource extraction, with little value added, will not generate the momentum, nor the inclusive space, required to ensure sustainability. Future growth demands a model that creates more em- ployment opportunities, enhances productivity, fosters technology transfer and reduces inequality. On its part, the Bank believes that Africa must pursue economic integration as part of its broader development strategy in a rapidly globalizing world. Integration will provide Donald Kaberuka Africa the scale economies it needs to benefit fully from President the expanding global value chains. African Development Bank Group African Development Report 2014 Regional integration for inclusive growth v Acknowledgements The African Development Report 2014 (ADR) was prepared by staff During consultations and preparation of the Report, a number of of the African Development Bank Group under the overall guidance useful suggestions were received from the following: Ibrahima of Professor Mthuli Ncube (then Chief Economist and Vice President Amadou Dia (University of Geneva), Jason Gagnon (OECD); Jodie and currently on leave), Gilbert Mbesherubusa (former Vice President, Keane and Sheila Page (ODI); Issouf Soumaré (University of Laval); Complex of Infrastructure, Private Sector and Regional Integration), Kathleen van Hove (ECDPM); Fliss Liwaeddine, Treasure Maphanga, Steve Kayizzi-Mugerwa (Director, Research Department and Acting and Bonkoungou Zouli (African Union Commission); Imed Ben Hadj Chief Economist and Vice President), Alex Rugamba (Director, Hamouda (Arab Maghreb Union); Abu Sufian Dafalla (Common Market ONEC, previously Director NEPAD, Regional Integration and Trade for Eastern and Southern Africa); Joseph Birungi and Philip Wambugu Department), Issa Faye (Manager, Research Division) and Moono (East African Community); Augustin Ndabihore (Economic Community Mupotola (Manager, Regional Integration and Trade). The Report is of Central African States); Sédiko Douka (Economic Community of the result of collaboration between the Research Department and West African States); Mwathi Kungu (Intergovernmental Authority on the NEPAD, Regional Integration and Trade Department. Development); Lovemore Bingandadi and Cassius Chuma (Southern African Development Community); Adama Deen (New Partnership The Report’s core team comprised of Issa Faye (Manager, Research for Africa’s Development Planning and Coordinating Agency); Lynette Division), Ralf Krüger (Task Manager), Audrey Verdier-Chouchane Chen Jules (NEPAD Business Foundation); Andrew Sinyangwe (Walvis (Task Manager), Christian Kingombe, Gabriel Mougani, Emelly Bay Corridor Group); Anthony Moungameli Mehlwana (United Nations Mutambatsere, Thierry Kangoye, Ilan Strauss, Rebecca Dadzie, Economic Commission for Africa); Joseph Amihere and Cyril Okoye Brennan Hodkinson, Mark Pearson and Anne Sofie Westh Olsen. (Association of African Development Finance Institutions); Kara Diallo The Report benefited from inputs and comments from across the (Borderless Alliance); and Dotun Ajayi (African Business Roundtable). Bank and from consultations with Regional Economic Communities in Abidjan and Lusaka in March, 2014. Ines Hajri and Nadia Lamari provided valuable administrative and logistical support, while Charlotte Karagueuzian, Andrew Lawday and David Short provided editorial assistance. The French version of the Report was prepared for publication by Architexte, Paris. Background papers were drafted by Bruce Byiers, Jan van Heukelom, and Quentin de Roquefeuil from the European Centre for Development Policy Management (ECDPM); Jane Kennan and Christopher Stevens from the Overseas Development
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