AFRICA’S CONTINENTAL INTEGRATION: WHAT ROLE DOES INFRASTRUCTURE PLAY?

Prepared for the African Economic Conference 2013

October 28-30, 2013

Johannesburg, South Africa

Conference Theme: Regional Integration in Africa

Submitted on 30th August, 2013

1 Abstract

This paper discusses the role of infrastructure development in achieving Africa’s continental integration. It has focused on four different types of infrastructure i.e. energy, transport, trans- boundary water resources and information, communication and technology (ICT). Apart from looking at efforts to develop Africa’s infrastructure at both the continental and regional levels, the paper also summarizes challenges being faced in developing continental infrastructure. The paper ends with some policy recommendations on what needs to be done to promote infrastructure development in Africa.

In this paper, I have acknowledged the fact that infrastructure development is critical for effective integration of the continent. To answering the question of whether infrastructure development is a prerequisite for regional integration or vice versa, I have found that the two are mutually enhancing forces because good infrastructure facilitates integration just as the ongoing integration efforts contribute to improved infrastructure.

2 Table of Contents

Abstract...... 2

Table of Contents...... 3

List of Acronyms...... 5

1.0 Background:...... 7

2.0 Infrastructure Development and Regional Integration...... 9

2.1 Energy Infrastructure and Regional Integration...... 9

2.2 Transport Infrastructure and Regional Integration...... 10

2.3 Trans-boundary Water Resources and Regional Integration...... 10

2.4 ICT Infrastructure and Regional Integration...... 11

3.0 Efforts to Develop Africa’s Infrastructure...... 11

3.1 The NEPAD’s Short Term Action Plan (STAP)...... 12

3.2 Medium to Long Term Strategic Framework (MLTSF)...... 12

3.3 The AU/NEPAD African Action Plan (AAP)...... 13

3.4 The Presidential Infrastructure Championing Initiative (PICI)...... 13

3.5 The Programme for Infrastructure Development in Africa (PIDA)...... 14

4.0 Infrastructure Development in the Regional Economic Communities (RECs)...... 15

4.1 The Economic Community for West African States (ECOWAS)...... 15

4.2 COMESA-EAC-SADC Tripartite FTA...... 15

4.3 Economic Community for Central African States (ECCAS)...... 16

4.4 The Arab Maghreb Union (AMU)...... 17

4.5 The Community of Sahel-Saharan States (CEN-SAD)...... 17

4.6 The Inter-Governmental Authority on Development (IGAD)...... 18

5.0 Key Challenges to Infrastructure Development in Africa...... 18

5.1 Project Financing...... 18

3 5.2 Civil Wars and Conflicts...... 19

5.3 Lack of Transparency and Accountability...... 19

5.4 Capacity to Develop Bankable Projects...... 20

5.5 Rapid Population Growth...... 20

6.0 Recommendations and Conclusion...... 20

6.1 Recommendations...... 20

6.1.1 Encourage Public Private Partnerships (PPP)...... 20

6.1.2 Improve Capacity to Develop Bankable Projects...... 21

6.1.3 Improve Implementation Coordination...... 21

6.1.4 Domestication of PIDA...... 21

6.2 Conclusion...... 22

References:...... 23

Tables...... 25

Table 1: PICI Priority Projects...... 25

Table 2: Selected PIDA-PAP Projects...... 27

4 List of Acronyms

AAP African Action Plan

AEC African Economic Community

AfDB African Development Bank

AICD African Infrastructure Country Diagnostic

AIIR Africa Infrastructure Investment Report

AMU Arab Maghreb Union

ATM Air Traffic Management

AU African Union

AUC African Union Commission

CAR Central African Republic

CBC Commonwealth Business Council

CEN-SAD Community of Sahel-Saharan States

CNS Communication Navigation Surveillance

COMESA Common Market for Eastern and Southern Africa

DPs Development Partners

DRC Democratic Republic of Congo

EAC East African Community

ECCAS Economic Community of Central African States

ECOWAN Economic Community of West African Network

ECOWAS Economic Community of West African States

ESA Eastern and Southern Africa

FTA Free Trade Area

GCI Global Competitiveness Indices

GDP Gross Domestic Product

5 HSGOC Heads of State and Government Orientation Committee

ICT Information, Communication and Technology

IGAD Inter-Governmental Authority on Development

IGADD Inter-Governmental Authority on Drought and Development

LDCs Least Developed Countries

MIP Minimum Integration Programme

MLTSF Medium to Long Term Strategic Framework

NEPAD New Partnership for Africa’s Development

NPCA NEPAD Planning and Coordinating Authority

NSC North South Corridor

OAU Organisation of African Unity

PAP Priority Action Programme

PICI Presidential Infrastructure Championing Initiative

PIDA Programme for Infrastructure Development in Africa

PPIU Project Planning and Implementation Unit

PPP Public Private Partnership

REC Regional Economic Community

SACU Southern African Customs Union

SADC Southern African Development Community

STAP Short Term Action Plan

TICP Tripartite IGAD Corridor Programme

T-FTA Tripartite FTA

UNECA United Nations Economic Commission for Africa

UFIR Upper Flight Information Region

WAPP West African Power Pool

YD Yamoussoukro Declaration

6 1.0 Background:

Regional integration remains an important agenda for the growth and development of the African continent. African leaders have been involved in negotiating regional integration as far back as 1910, the year the Southern African Customs Union (SACU) was formed. Since that time, there have been different of initiatives aimed at integrating African Economies. For example, the Southern Rhodesia Customs Union involving South Africa and Zimbabwe was formed in 1949. In 1962, Ghana and Burkina Faso established the Ghana-Upper Volta Trade Agreement and the African Common Market, which linked Algeria, Egypt, Ghana, Guinea, Mali, and Morocco. The Equatorial Customs Union (the predecessor of the Customs Union of Central African States), which joined Cameroon, Central African Republic, Chad, Congo and Gabon was also formed in 1962. The East African Community (EAC) which formerly comprised three countries (Tanzania, Kenya and Uganda) started in 1967.

When the African leaders were forming the Organisation of African Unity (OAU) and the African Union (AU) in 1963 and 2000 respectively, regional integration was still the main agenda as evidenced by the OAU Charter and the Constitutive Act establishing the African Union. These instruments define the ideals of the African unity whose main aim is to transform Africa through integration. Moreover, the Lagos Plan of Action and the Abuja Treaty establishing the African Economic Community (AEC) clearly outlines the economic, political and institutional mechanisms needed to achieve this goal.

While some of the earlier integration efforts have been consolidated into the current initiatives, most of them have either been abandoned or transformed but continental integration remains the agenda of African countries.

The African Union recognizes eight regional economic communities (RECs) as building blocs towards the formation of the African Economic Community (AEC). These are (i) The Arab Maghreb Union (AMU), (ii) The Community of Sahel-Saharan States (CEN-SAD), (iii) The Economic Community of West African States (ECOWAS), (iv) The Economic Community for Central African States (ECCAS), (v) The Common Market for Eastern and Southern Africa (COMESA), (vi) The East African Community (EAC), (vii) The Inter-Governmental Authority on Development (IGAD), and (viii) The Southern African Development Community (SADC). The Abuja Treaty envisaged realization of continental integration through harmonization of such RECs.

So far, a lot has been done to achieve continental integration. For example, the EAC, SADC and COMESA are negotiating the Tripartite FTA as a building block for the AEC. In 2009, the African Union (AU) developed the Minimum Integration Programme (MIP) as a mechanism for spearheading convergence of RECs. Using MIP, AU envisages enhanced continental integration leading to establishment of the AEC as members benefit from one another’s comparative advantages, best practices and experiences in the area of integration. To fast-track Africa’s

7 integration, the African Union Commission (AUC), during the AU Assembly in Banjul, The Gambia, in 2006, recommended recognizing eight RECs as building blocks thereby putting a moratorium on the formation of new RECs. The AU, therefore, is encouraging rationalization and harmonization of policies and programmes among different RECs in order to achieve continental integration.

Despite these efforts, continental integration remains elusive as evidenced by very low intra- African trade. Compared to intra-regional trade in other parts of the world, trade among African states does not suggest that the continent is integrating. Ranging from 10 to 12 per cent, intra- African trade is still lower when compared to over 40 per cent in North America and about 63 per cent in Western Europe.

The low levels of intra-African trade are attributed to a number of reasons. African economies mainly export raw materials whose demand is externally1 oriented. Most countries trade in similar products and they lack industrial capacity to diversify exports that would support intra- regional trade. Despite liberalizing trade among each other, tariffs and nontariff barriers remain a serious obstacle to intra-African trade. For example road blocks and check points, and inconsistent procedures and regulations continue to be serious challenges to intra-African trade. Insecurity is another main obstacle especially in West Africa, and other parts of the continent. In such cases, countries tend to trade less with each other since they cannot trust each other.

Chief among the obstacles to intra-African trade is said to be poor infrastructure as it remains weak in many African countries. As a result of poor infrastructure, many businesses in Africa fail because of high operational costs which make their business uncompetitive. Many African countries experience massive power outages that stifle industrialization and other economic progress.

Transport infrastructure on the African continent continues to be weak to the extent that trade and economic growth are stifled. Inadequate road and rail networks and insufficient port facilities, contribute to high transportation costs2, which in turn undermines Africa’s export competitiveness on the global markets. Thus, apart from impeding Africa’s intra-regional trade and integration, poor infrastructure is a recipe for the continent’s marginalization in global integration.

There is an ongoing debate among regional integration experts on whether infrastructure development should take precedence to regional integration or vice versa. The question that needs to be answered is whether infrastructure development is a prerequisite for regional integration or regional integration leads to infrastructure development. Put differently, does Africa need infrastructure to achieve continental integration or continental integration will lead

1 Africa countries export most of their products to the international market and very little is traded among themselves.

2 In most African countries, transport inefficiencies contribute about 75% to the price of Africa’s exports (AfDB, 15 th May 2013) http://www.afdb.org/en/news-and-events/article/developing-african-infrastructure-for-the- continents-structural-transformation-11790/. Accessed on 17th July, 2013. 8 to infrastructure development. In this paper, I have answered this question by analyzing the importance of infrastructure in regional integration. In view of this, I have looked at various initiatives being done to develop Africa’s infrastructure as well as challenges being faced. The rest of the paper is organized as follows: Section Two outlines an investigation on the role of infrastructure (energy, transport, ICT and trans-boundary water resources) in achieving meaningful integration; Section Three highlights some of the efforts that have been undertaken to develop continental infrastructure; Section Four gives an overview of regional initiatives to develop infrastructure; Section Five summarizes the challenges being faced in developing continental infrastructure; and Section Six gives some policy recommendations and conclusion.

2.0 Infrastructure Development and Regional Integration

Africa is seen as a land of opportunities and an emerging destination of choice for investors as they look for high-growth markets (AU, PIDA p. 1). Africa is home to many natural resources including minerals that are essential for the growth and development of the world. However, the continent is not able to reap the full benefits of its resources and develop its economies largely due to infrastructure bottlenecks. Improving Africa’s infrastructure network would, therefore, provide a framework conducive for industrial development and enable the agricultural sector effectively contribute to economic growth. It should be noted that many African economies are agro-based and mainly trade in raw materials. Thus, infrastructure development would ensure value addition and growth of non-farm enterprises which in turn would rejuvenate rural economies.

Advances in infrastructure development will also create a shift from overseas trade and promote intra-African trade. The biggest constraint to Africa’s growth and competitiveness has been fragmented, inadequate and underperforming infrastructure systems. Under the current status, Africa’s infrastructure does not promote trade between countries let alone trade within and across regions. The transport systems that were used by the colonials to export raw materials to their countries are still being used today because there have not been major changes/improvements to this infrastructure. This is one of the major reasons why Africa’s trade is oriented towards former colonial master economies. Infrastructure development that target continental markets would, therefore, promote intra-African trade, unlocking Africa’s potential and achieve effective continental integration.

2.1 Energy Infrastructure and Regional Integration

Insufficient energy infrastructure is one of the factors negatively affecting competitiveness of African products. For any company to produce goods or services, energy plays an important role. Poor energy infrastructure entails that the cost of accessing energy is also high. This negatively affects productivity of firms. To effectively participate in regional integration, the continent requires improved access to affordable energy that will help to reduce the production costs

9 thereby making African economies competitive both at the continental and international level. Thus, a country would require reliable energy to effectively participate in regional integration since energy supply that is free from interruptions and shortages would ensure that businesses and factories work unimpeded. Apart from promoting cooperation between countries, regional integration is concerned with the exchange of tradable goods and services and energy enables firms to produce these products. Without trading, regional integration would be meaningless. Improved energy infrastructure would encourage trade in energy among African countries thereby encouraging regional cooperation and integration. As such, Africa should develop the energy sector to ensure that economies have capacity to competitively produce goods and services.

2.2 Transport Infrastructure and Regional Integration

Transport infrastructure is among the main challenges to effective regional integration in Africa. Reliable transport infrastructure is essential in improving any country’s competitiveness and enable it efficiently participate in regional integration initiatives. The impact of poor transport infrastructure and logistics is particularly severe for landlocked countries. This is because distance to the sea is long and when the transport infrastructure is poor, it forces landlocked states to incur an additional cost. It is estimated that landlocked developing countries pay almost four times more for transport services than developed countries, and transport costs in Africa are among the highest in the world (AU/NEPAD AAP, 2010-2015 p. 25). For landlocked African countries, most of whom are the Least Developed Countries (LDCs), transport costs can be as high as 70 per cent. To participate in any regional arrangement, countries have to import and export goods and services and high transportation costs make their products uncompetitive thereby limiting their participation. Improvement of transport infrastructure will, therefore, unlock Africa’s potential by reducing the cost of doing business and increase intraregional trade as countries become competitive.

2.3 Trans-boundary Water Resources and Regional Integration

Water is life and is a universal input into all areas of human activity including massive projects being implemented under regional integration initiatives. Africa’s growing population is exerting pressure on already limited water supplies. Africa has 59 international trans-boundary river basins, 15 principal lakes, 38 trans-boundary aquifer systems, and 24 main watersheds that cross the manmade political boundaries of two or more countries (AU/NEPAD AAP, 2010-2015 p. 34).

Trans-boundary water resources are critical for averting the effects of climate change in countries that share these resources. They can be used to generate electricity, promote irrigation farming as well as be used for transporting goods thereby contributing to promoting regional integration. It should also be noted that most of these water resources are currently being affected by climate change and combined efforts to mitigate the impact of climate change will go a long way in averting climate change impact. Thus, regional integration is important to the

10 preservation of trans-boundary water resources just as they are important for regional integration in Africa.

2.4 ICT Infrastructure and Regional Integration

ICT is an important element of regional integration in Africa but the sector remains undeveloped. Apart from inadequate skills base, other challenges to ICT development in Africa include lack of a backbone infrastructure and appropriate policy and regulatory environment. In many countries ICT infrastructure is concentrated in urban areas leaving rural areas out of reach. An advanced ICT sector would facilitate trade and social exchanges between African countries through enhanced productivity, reduced communication costs and improved financial inclusion thereby promoting continental integration. With this in mind, African countries have embarked initiatives aimed at developing the ICT infrastructure and synchronize ICT policies and regulatory frameworks as articulated in the Kigali Protocol.

3.0 Efforts to Develop Africa’s Infrastructure

African leaders recognize that infrastructure development is the foundation upon which the continent’s integration and development rests. The African Union, in their new strategic plan (2014-2017), has designated infrastructure development as a means of achieving the third priority area (http://summits.au.int/en/21stsummit/events/african-union-commission %E2%80%99s-strategic-plan-2014-2017-adopted-assembly)3. This shows the centrality of infrastructure in attaining an integrated, prosperous and inclusive Africa. It has been observed that improved infrastructure has enabled Africa achieve improved economic growth and development and that poor infrastructure holds back economic growth. The Common Wealth Business Council (CBC ) 2013: 2013 pp. 11-12, explained that lack of infrastructure in Africa is responsible for low competitiveness evidenced by low global competitiveness indices (GCIs). It is reported that GCIs for Africa are lower than those of other regions of the world because infrastructure in those regions is relatively better than in Africa.

There have been a number of initiatives aimed at developing the continent’s infrastructure. These include: (i) the NEPAD’s Short Term Action Plan (STAP) (ii) The Medium to Long Term Strategic Framework (MLTSF) (iii) The AU/NEPAD African Action Plan (AAP); (iv) The Presidential Infrastructure Championing Initiative (PICI); and (v) The Programme on Infrastructure Development in Africa (PIDA). It is expected that regional economic integration will be promoted by bridging Africa’s infrastructure gap. According to the NEPAD Secretariat,

3 The AUC Strategic Plan (2014-2017) has eight priority areas namely: (i) Human capacity development; (ii) Agriculture and agro processing; (iii) Inclusive economic development; (iv) Peace, stability and good governance; (v) Mainstreaming women and youth into all our activities; (vi) Resource mobilisation; (vii) Building a people-centred Union; and (viii) Strengthening the institutional capacity of the Union and all its organs. 11 there can be no meaningful development without trade and there can be no trade without adequate and reliable infrastructure (http://www.nepad.org/regionalintegrationandinfrastructure).

3.1 The NEPAD’s Short Term Action Plan (STAP)

STAP was launched in 2002 to address specific infrastructure development problems including facilitation, capacity building, physical and capital projects, and studies required to prepare future projects. The Sectoral Overviews identified infrastructure gaps and related strategic challenges that depend on regional collaboration and joint actions at the level of the continent as well as sub-regions. Projects were included in STAP provided that they: (i) were at an advanced stage of preparation and could be fast-tracked; (ii) supported both regional approach to infrastructure provision and integration; (iii) have stalled for political reasons and NEPAD intervention could be expected to make a difference; and (iv) offer solution to regional policy regulatory and institutional constraints to regional infrastructure activities.

The review of STAP in 2003 revealed that remarkable progress was made in implementing projects across the regions. However, it was noted that, to improve implementation of STAP, there was need to address a number of issues including clarifying the role of NEPAD with regard to political support and access to funding; support to the RECs in their enhanced role as implementing agents and coordinators; the need to sharpen the focus of NEPAD program and prioritize projects/initiatives; and the need to establish a monitoring system for project/program implementation (NEPAD Infrastructure Development - http://www.nepadst.org/doclibrary/pdfs/doc13_102003.pdf). In brief, the review of STAP recommended that a limited number of programs/projects be designated as NEPAD Flagship Projects and given special attention and high visibility.

3.2 Medium to Long Term Strategic Framework (MLTSF)

Launched in 2006, the MLTSF represented a shift from the short term to the long term focus on infrastructure investment. The overall objective of the MLTSF was, therefore, to provide a framework for guiding the continuous and consistent development of infrastructure on the continent based on coherent strategic goals, and define and institute a monitoring framework for tracking progress. The MTSF has established a common vision among all stakeholders by fostering cross-fertilization and dissemination of good practices on NEPAD infrastructure program.

The African Infrastructure Country Diagnostic (AICD) study was also conducted to consolidate the MLTSF. The Study helped to provide details on the fiscal cost of infrastructure i.e. how much public money goes to infrastructure. It also highlighted the participating country’s investment needs in terms of social and economic demands as well as show performance of existing infrastructure.

12 3.3 The AU/NEPAD African Action Plan (AAP)

This programme was first conceived in 2005/2006 in a drive to fast track the implementation of Africa’s development and initiatives (AU/NEPAD AAP, 2010-2015 p. 6). However, this plan was revised in 2008 when stakeholders felt that the plan lacked context for its priorities, a clear indication on the status of the projects, and a reliable basis for resource requirements. The revised plan (2010-2015) presented a detailed analysis of the context for the priority programmes and projects.

The key infrastructure projects that were targeted by AAP were those in energy, transport, ICT, and trans-boundary water but implementation of these projects was negligible and only a small number of projects were implemented. As a precursor to PIDA, AAP was used as short-term engagement with Development Partners (DPs) to accelerate progress in implementing Africa’s priority projects for the period 2010-2012.

3.4 The Presidential Infrastructure Championing Initiative (PICI)

The NEPAD Heads of State and Government Orientation Committee (HSGOC) in Kampala, Uganda in July 2010 adopted the Presidential Infrastructure Championing Initiative (PICI) and the AU adopted PICI projects at the 16th AU Summit in January 2011. PICI is an African-driven infrastructure programme for the continent with the aim of providing links for people and goods to move between markets and places, and to contribute to the overall economic development of the continent. Through this initiative, the African Heads of State are providing the necessary political leadership in the development of cross-border infrastructure projects. While countries are developing their infrastructure, it is important that there is coordination to ensure that harmonization in the infrastructure and PICI is a prerequisite for the successful completion of these projects. It is anticipated that these projects will unlock the economic potential of the continent and provide development opportunities for the communities, cities and regions. Table 1, which has been given as Annex shows priority projects under PICI.

3.5 The Programme for Infrastructure Development in Africa (PIDA)

PIDA is a continental initiative based on regional4 infrastructure projects and programmes. This programme was developed after various studies, analyses and forums revealed that poor infrastructure is one of the biggest hurdles to Africa’s growth and development. PIDA was developed by the African Union Commission (AUC) in partnership with the African Development Bank (AfDB), the NEPAD Planning and Coordinating Agency (NPCA), the United Nations Economic Commission for Africa (UNECA) and the Regional Economic

4 The Regional Economic Communities (RECs) recognized by the African Union as building blocks to the African Economic Community (AEC) are AMU, CEN-SAD, ECOWAS, ECCAS, COMESA, EAC, IGAD, and SADC. 13 Communities (RECs) with inputs from the African countries. It was approved in January 2012 by the African Heads of State and Government during the 18th AU Summit in Addis Ababa. Focusing on transport, energy, ICT and trans-boundary water networks infrastructure, PIDA provides a strategic framework necessary for boosting intra-regional trade, economic growth and development as well as employment creation and poverty reduction in Africa. In summary, PIDA is an African initiative developed by Africans to develop African infrastructure for Africa’s growth and development.

PIDA has selected some projects to be completed by 2020. These projects are given high priority and have been included in the PIDA Priority Action Plan (PAP). The PAP is made up of 51 projects and programmes: 15 energy; 24 transport; 9 trans-boundary water; 3 ICT. They focus on: (a) hydropower, interconnections, pipelines (energy); (b) connectivity, corridor modernization, ports and railways modernization, air transport modernization (transport); (c) multipurpose dams, capacity building, water transfer (water); and (d) capacity building, land interconnection infrastructure, internet exchange points (ICT) – (http://www.mrde- africa.org/appendices/box3programmeforinfrastructuredevelopmentinafricapida.htm). Table 2, which is appears in the annex shows some5 of the projects in the PIDA Priority Action Plan (PAP).

Implementation of PIDA is dependent on the initiatives of Regional Economic Communities (RECs), Member States and specialized agencies to develop infrastructure in Africa. As already noted, the African Union has designated eight RECs (AMU, CEN-SAD, ECOWAS, ECCAS, COMESA, EAC, IGAD, and SADC) as building blocks to the African Economic Community (AEC). It is through these RECs that PIDA is expected to be implemented. 4.0 Infrastructure Development in the Regional Economic

Communities (RECs)

4.1 The Economic Community for West African States (ECOWAS)

Established in 1975, ECOWAS is a fifteen Member States6 organization with a population of about 300 million. Infrastructure deficit is recognized to be one of the major challenges to the region’s growth and development. Major infrastructural challenges include road and railway networks requiring rehabilitation and maintenance as well as full construction on some to facilitate freight movement and support intra-community trade; seaports nearing capacity and require expansion to accommodate increased container traffic; energy infrastructure requiring

5 PIDA-PAP has 51 priority projects but Table 2 only shows a few of these projects. A full list can be obtained at http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20note%20English %20for%20web%200208.pdf.

6 ECOWAS Member States are Benin, Burkina Faso, Cape Verde, Cote Divoire, Gambia, Ghana, Guinea, Guinea Bisau, Liberia, Mali, Niger, Nigeria, Senegal, Siera Leone, and Togo (http://ecowas.int/). 14 investments in areas of generation, access and interconnection to aid power pooling potential; and ICT infrastructure requiring upgrading to ensure maximum connectivity among Member States (CBC: 2013 pp 25-26).

ECOWAS has designated infrastructure as one of priorities to be pursued in the next five years (ECOWAS Strategic Plan, 2011-2015). To promote infrastructure development in the ECOWAS region, the community intends to improve rural access to energy and energy services as well as develop multimodal transport systems to improve connectivity between member states. The region also intends to reduce cost and enhance provision of infrastructure services and increase involvement of the private sector and public-private partnership (PPP) in infrastructure development. It is also the intention of ECOWAS to secure adequate funding for infrastructure projects, facilitating member states’ access to funds and securing foreign capital and expertise.

According to AIIR 2013 pp. 26-28, ECOWAS is implementing a number of infrastructure projects in transport, ICT, rail, and energy sector. These include the Trans-West African Coastal Highway (Dakar to Lagos), Trans-West African Sahelian Highway (Nouakchott-Dakar- N’Djamena), the Abidjan-Ouagadougou-Niamey-Cotonou Railway, the ECOWAS Wide Area Network (ECOWAN), West Africa Power Pool (WAPP).

4.2 COMESA-EAC-SADC Tripartite FTA

The Tripartite FTA region comprise 26 countries with a combined population of 527 million people, a combined Gross Domestic Product (GDP) of US$ 624 billion, a GDP per capita averaging US$1,184 and make up half of the African Union (AU) in terms of membership and just over 58% in terms of contribution to GDP and 57% of the total population of the African Union.

One of the objectives of the Tripartite FTA is to attract private investment through public-private partnerships to fill the infrastructure deficit in the region (Cronje J.B: 2012 - http://www.tralac.org). To do this, the three RECs (COMESA, EAC and SADC) are jointly implementing a number of infrastructure projects including the North South Corridor; the Upper Flight Information Region (UFIR); Liberalization of Air Transport in line with the Yamoussoukro Decision (YD); Tripartite (COMESA-EAC-SADC) Project Preparation and Implementation Unit (PPIU); and the Zambia, Tanzania and Kenya Power interconnector. Under the NSC, the Tripartite FTA will develop a road and railway that will pass through eleven countries namely: South Africa, Botswana, Mozambique, Zambia, Zimbabwe, Namibia, Tanzania, Malawi, Swaziland, DRC and Angola. The main objective of UFIR project is to enhance efficiency in the management of the upper airspace to bring down navigational costs to air transport operators and improve civil aviation safety. Under the Zambia, Tanzania and Kenya interconnector, the T-FTA wants to link the Southern Africa Power Pool and the Eastern Africa Power Pool (EAC: http://www.eac.int/).

Apart from implementing joint projects, RECs of the T-FTA are also implementing individual projects. For example, COMESA is implementing such projects as Airspace Integration Project

15 under which COMESA is replacing ground-based air navigation aids by satellite-based air navigation technology known as Communication Navigation Surveillance/Air Traffic Management (CNS/ATM) – (AfDB: http://www.afdb.org/en/news-and-events/article/afdb- supports-regional-infrastructure-development-us-8-6-million-grant-for-comesa-unified-airspace- 7185/). COMESA has also a number of institutions involved in infrastructure development which include the PTA Bank and the COMESA Infrastructure Fund which are used to finance infrastructure investments.

4.3 Economic Community for Central African States (ECCAS)

ECCAS was established on 18th October 1983 and is a 10 Member States driven body. Members of ECCAS are Angola, Burundi, Cameroon, Central African Republic, Chad, Congo (Brazzaville), DRC, Equatorial Guinea, Gabon, and Sao Tome and Principe. Development of regional infrastructure is at the heart of ECCAS. Chapter IX of the ECCAS Treaty outlines the region’s focus on infrastructure development (ECCAS Treaty: pp. 32-33 http://www1.chr.up.ac.za/undp/subregional/docs/eccas1.pdf).

In keeping with Africa’s vision of integrating the continent by improving infrastructure, ECCAS is implementing a number of projects such as transport, energy and the telecommunication infrastructure (AfDB, 2011: pp. 14-15). However, given the sensitivity of the ecosystems in Central Africa, implementation of these projects are accompanied by environmental restoration and regeneration infrastructure consistent with carbon stock maintenance and efforts to avoid degradation of carbon dioxide absorption potential.

The ICT project, also known as the Central African Backbone Project, will be jointly implemented with ECOWAS and will span 25 countries in West African and Central African States. It is envisaged that developed ICT infrastructure will contributes to the regional interconnectivity and ensure reduced communication costs which will attracts investors.

4.4 The Arab Maghreb Union (AMU)

AMU is a five-member state organization comprising of Algeria, Libya, Mauritania, Morocco, and Tunisia. The treaty establishing AMU was signed on 17th February, 1989. The main objective of the treaty is to strengthen all forms of ties among Member States in order to ensure regional stability and enhance policy coordination (AMU: http://www.africa- union.org/root/au/recs/AMUOverview.pdf). The treaty also intends to introduce free circulation of goods, services and factors of production among Member States.

Despite facing some challenges7, AMU is committed to developing infrastructure in its Member States. To emphasize on this commitment, in January 2013, the Union established an Investment

7 AMU has been facing challenges due to tension between Morocco and Algeria over Western Sahara. This tension has hindered decision-making and the operation of the union, with no summit organized since 1994. The decision to establish the bank was first proposed in 1991, but could not be launched. 16 Bank with initial capital of about US$100 million. According to Sid Ahmed Ould Raiss, the Governor of the Central Bank of Mauritania, the bank will be financing development projects such as highways, promoting new technologies, and energy (Aljazeera: 10th January 2013, http://www.aljazeera.com/).

4.5 The Community of Sahel-Saharan States (CEN-SAD)

CEN-SAD is an eighteen Member States organization involving Benin, Burkina Faso, Central African Republic (CAR), Chad, Djibouti, Egypt, Eritrea, Gambia, Libya, Mali, Morocco, Niger, Nigeria, Senegal, Somali Democratic Republic, Sudan, Togo and Tunisia. It was established on 4th February 1998. CEN-SAD works together other regional economic communities and the African Union (AU) to strengthen peace, security and stability to achieve regional economic and social development. Among others, CEN-SAD intends to remove all restrictions hampering integration of its Member States.

4.6 The Inter-Governmental Authority on Development (IGAD)

IGAD is a seven-country member organization with Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan and Uganda as Member States. Formed in 1996, IGAD proceeded Inter-Governmental Authority on Drought and Development (IGADD) an institution that was mandated to deal with issues of drought and desertification from the late 1980 to early 1990’s. Apart from cooperating in conflict prevention, management and resolution and humanitarian affairs; and food security and environmental protection, IGAD is also cooperating in infrastructure development especially in transport, energy and communication.

So far, IGAD has collaborated with COMESA and EAC to divide projects among themselves to avoid duplication and approaching the same donors with the same projects. For example, IGAD in conjunction with the Tripartite FTA between COMESA-SADC-EAC are implementing the North South Corridor (NSC) project and the Power Transmission interconnectors under the framework called the Tripartite and IGAD Corridor Programme ((TICP). This project is expected to make the Eastern and Southern African (ESA) region more competitive by reducing the high costs of transport, trade and energy, thereby creating higher levels of economic growth, employment creation and poverty reduction (TICP, 2011: http://igad.int/attachments/349_tripartite_igad_infrastructure_communiqie.pdf).

17 5.0 Key Challenges to Infrastructure Development in Africa

Africa is facing a number of challenges in its efforts to develop infrastructure. The following are some of them:

5.1 Project Financing

Africa faces a daunting task to source funding for infrastructure development. The PIDA puts US$360 billion as a total financing requirement up to 2040. Of this, the PIDA Priority Action Plan (PIDA-PAP) which constitutes 51 priority investment programmes and projects in energy, transport, ICT and trans-boundary water is estimated at US$67.9 billion up to the year 2020. Getting these resources is a serious problem. In Africa, Governments have traditionally played an important role in financing investments in infrastructure. However, the capacity of these Governments to raise the required money to implement PIDA is very doubtful. Most of the African Governments are very poor and to raise such huge sums of money for infrastructure projects would entail neglecting other equally important sectors such as health.

Currently, Africa continues to rely on support from Development Partners in developing its infrastructure. This is not a healthy situation because the Development Partners cannot afford to finance all infrastructure projects on the continent. The financial crisis has revealed that Development Partners will not continue to be dependable in financing Africa’s infrastructure investments. Levels of assistance have dwindled as a result of the crisis in the developed countries. To develop its infrastructure, Africa needs alternative sources of funds and the African Development Bank (AfDB) is playing a key role in that respect.

5.2 Civil Wars and Conflicts

This is a challenge in Africa as evidenced by civil wars and conflicts in many African countries. Conflicts and civil wars are simply not complementary to growth and sustainability of infrastructure facilities. Apart from taking human lives that could be used to develop infrastructure, civil wars and conflicts divert resources to financing wars and conflicts leading to deterioration in infrastructure. As countries go into war, they neglect infrastructure investment and buy equipment for wars. If the resources that have been spend on wars and conflicts could be turned into investments in infrastructure, the condition of Africa’s investment could have been improved.

5.3 Lack of Transparency and Accountability

While the continent is making significant strides in promoting good governance and accountability, there are still some hot spots that are likely to stifle infrastructure development in Africa. With the six of the world’s ten most rapidly expanding economies located in Africa, it 18 should be appealing to investors to come to Africa. The private sector is likely to generate returns on their investment if they invest in the continent that is growing. However, conditions prevailing in individual economies will determine the actual levels of investments going to those countries.

It should be noted that, as business entities, the private investors look for certain pre-conditions before they commit their resources. For example, the private investors will be interested to invest in projects that are high priority to governments and are likely to come to conclusion (Deloitte, http://www.deloitte.com/). This is a serious problem to many African Governments. In most cases, infrastructure projects are not quickly finalized because of corruption. Projects are started and abandoned because resources have been abused and if they are completed they take long and in most cases quality of the infrastructure is compromised because resources were diverted.

Policy instability is another hurdle to infrastructure development in Africa. With government changing every four to five years, development policies are not stable and are dependent on the government of the day. In such cases, policies keep changing and this affects implementation of projects. You would find that one government started a good infrastructure project and when government changes there will be a shift in policy resulting into abandonment of projects. If the continent is to attract investments in infrastructure, this has to change.

5.4 Capacity to Develop Bankable Projects

Many African Governments lack the capacity to develop projects to a stage where they are ready for financing. This is a significant bottleneck that is contributing to under-development of Africa’s infrastructure. Before Development Partners come to assist in infrastructure development, African Governments need to have bankable projects that can be financed. The capacity to develop projects to such levels is still scarce in many countries in Africa.

5.5 Rapid Population Growth

High population growth on the continent is one of the contributing factors to underdevelopment of infrastructure. Rapid population growth places enormous challenges on existing, and often obsolete and poorly maintained infrastructure and resources (Deloitte: http://www.deloitte.com/). It is disheartening to see many African countries still using infrastructure that was developed by the colonial governments some fifty years ago. Most of this infrastructure has surpassed its life span but countries still rely on them. It may be that when the infrastructure was being developed it was matching the then population but cannot support the current population.

19 6.0 Recommendations and Conclusion

6.1 Recommendations

It is an undeniable fact that Africa require suitable infrastructure to effectively integrate the continent. However, the challenges highlighted above need to be address to ensure that the continent’s infrastructure is sustainably developed. The following could be some of the recommendations that would help to achieve this objective.

6.1.1 Encourage Public Private Partnerships (PPP)

PPPs can offer innovative ways of delivering efficient and cost-effective infrastructure and services. Governments and public authorities are increasingly turning to PPP arrangements when implementing development projects and programmes. According to Cronje J.B. (2012), development of infrastructure should not only be viewed as government responsibility but also that of the private sector. Trade in services entail that infrastructure services should also be viewed as commercial economic activities that must operate efficiently to satisfy customers’ needs. There is need to change the way projects are implemented. Projects need to be self sustaining to ensure continued benefit of the projects to the continental integration agenda. This entails allowing the private sector to participate in the provision of infrastructure services.

PPPs can help public sector organizations shorten implementation periods, share risks, achieve better value for money and increase innovation in infrastructure programmes. Under PPP, the private sector uses their skills, knowledge and experiences to implement projects and is able to mobilize financial resources for projects. These arrangements, however, are highly complex policy instruments which need to be fully understood, professionally implemented and managed if they are to deliver on their potential. There is also need for political will to make decisions in a quick and transparent manner so that the private investors have confidence in the public authorities. PPPs can offer a solution to financial challenges that most governments in Africa experience but they need commitment from government if they are to deliver expected results.

6.1.2 Improve Capacity to Develop Bankable Projects

For a project to attract funding, it should be bankable. Financiers would not be interested to bankroll projects whose implementation framework is not clear. It should be pointed out that even private investors would not want to be involved in projects that have no clear implementation timelines. They would rather focus on markets where there is capacity to implement projects successfully.

20 6.1.3 Improve Implementation Coordination

Since the vision of developing infrastructure in Africa cuts across regions and nations, it is imperative to encourage coordination at these levels. PIDA envisages infrastructure development on the basis of RECs infrastructure programmes. It should also be noted that regional programmes, to a large extent, depend on infrastructure programmes of Member States. There is, therefore, need to domesticate PIDA to ensure its implementation lest it remain a programme on paper.

Successful implementation of infrastructure projects in Africa will require improved coordination at all levels. It is encouraging to note that within RECs, Member States are working together to develop regional infrastructure and different RECs are also collaborating in developing cross-regional infrastructure. For example, within SADC, Member States are in a process of establishing an Infrastructure Development Fund which will be used to develop regional infrastructure. In addition, the COMESA-EAC-SADC Tripartite FTA is collaborating with IGAD to develop the North South Corridor which is a cross-regional project. This kind of cooperation should also be encouraged in other African regions.

6.1.4 Domestication of PIDA

Since implementation of the PIDA is dependent on RECs, it is important that Member States of these RECs are sensitized on the importance of PIDA to ensure ownership of the regional projects. Even at the national level, all the stakeholders need to be aware of these regional programmes and should know what benefits they will bring to them. If this cannot be done, it will be very difficult to implement some of the projects outlined in the PIDA.

6.2 Conclusion

Infrastructure development is critical for the effective integration of the African continent. Africa faces a lot of infrastructure challenges which when improved would enable the continent to be competitive. With numerous resources, Africa is a land of opportunities and improving continental infrastructure would promote intra-African trade, unlocking Africa’s potential and achieve effective continental integration.

Efforts to integrate the continent have mainly focused on management of the integration process rather than dealing the critical challenges of integration. The paper has observed that much has been achieved in regional integration as evidenced by formation of various RECs which have also been recognized by the African Union as building blocks to the AEC. However, their effectiveness is questionable since intra-African trade remains low. In this paper, I have explained that continental infrastructure, which is still weak, is the main culprit. Therefore, in answering the question of whether infrastructure development is a prerequisite for regional integration or vice versa, the paper concludes that the two are mutually enhancing forces because good infrastructure among African countries will facilitate regional integration just as the ongoing regional integration efforts will contribute to improvement of infrastructure. 21 References:

1. African Development Bank (AfDB) (2011). Central Africa Regional Integration Strategy Paper (RISP), 2011-2015. Regional Department Centre (ORCE), NEPAD, Regional Integration and Trade Department (ONRI)

2. African Development Bank (AfDB) (2010) AfDB Supports Regional Infrastructure Development US$8.6 million Grant for COMESA Unified Airspace. Available at http://www.afdb.org/en/news-and-events/article/afdb-supports-regional-infrastructure- development-us-8-6-million-grant-for-comesa-unified-airspace-7185/. Accessed on 25th August 2013.

3. African Union Commission (AUC). Strategic Plan 2014-2017. Adopted by Assembly. Available at http://summits.au.int/en/21stsummit/events/african-union-commission %E2%80%99s-strategic-plan-2014-2017-adopted-assembly. Accessed on 22nd August 2013.

4. Aljazeera (10th January, 2013). Arab Maghreb Union Launches Investment Bank. Available at http://www.aljazeera.com/. Accessed on 27th August 2013.

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6. AU, PIDA, Programme for Infrastructure Development in Africa (PIDA). Available at http://www.au-pida.org/sites/default/files/PIDA%20Executive%20Summary%20- %20English_re.pdf. Accessed on 15th July 2013.

7. Common Wealth Business Council (CBC) – (2013) Africa Infrastructure Investment Report (AIIR). Buxton Press, London.

8. Cronje J.B. (2012) Infrastructure development in the COMESA-EAC-SADC Tripartite Free Trade Area. Trade Law Centre (Tralac) South Africa. Available at http://www.tralac.org/2012/04/18/infrastructure-development-in-the-comesa-eac-sadc- tripartite-free-trade-area/. Accessed on 26th August 2013.

9. Deloitte. Addressing Africa’s Infrastructure Challenges. Available at http://www.deloitte.com/assets/Dcom-SouthAfrica/Local%20Assets/Documents/Africa %20Infrastructure%20Final.pdf. Accessed on 28th August 2013.

10. East African Community (EAC) COMESA-EAC-SADC Tripartite Framework: State of Play. Available at http://www.eac. Accessed on 25th August 2013.

22 11. Economic Community for Central African States (ECCAS). Treaty Establishing the Economic Community of West African States. Available at http://www1.chr.up.ac.za/undp/subregional/docs/eccas1.pdf. Accessed on 27th August 2013.

12. Economic Commission for West African States (ECOWAS) Commission. ECOWAS Member States. Available at http://ecowas.int/. Accessed on 23rd August 2013.

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16. NEPAD (2011) Revision of the AU/NEPAD African Action Plan 2010-2015. Advancing Regional Integration and Continental Integration in Africa Together Through Shared Values. Abridged Report 2010-2012. Johannesburg, South Africa. Available at http://www.nepad.org/system/files/AAP%20final%20web%20130111.pdf. Accessed on 23rd August 2013.

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18. The Tripartite and IGAD Corridor Programme (TICP) – 2011. Tripartite and IGAD Infrastructure Investment Conference 28-29th September 2011, Nairobi, Kenya. Available at http://igad.int/attachments/349_tripartite_igad_infrastructure_communiqie.pdf. Accessed on 27th August 2013.

23 Tables

Table 1: PICI Priority Projects

Name of Champion Beneficiary Affected Project Description Project Countries RECs Missing Algeria Algeria, ECOWAS, The Sub-Saharan Highway is a 4500Km Links of the Niger, AMU transnational highway running between Trans-Sahara Nigeria, North Africa, bordered by the Mediterranean Highway Tunisia, Sea and the West Africa, bordered by the Mali and Atlantic Ocean. Chad The missing link is 200Km from Asasamaka to Arlit in Niger. It is currently a marked track over sand sheet.

Construction was expected to start in January 2013 and completed by December 2015. Optic Fibre Algeria Algeria, ECOWAS, This project covers a stretch of 4300Km Project - Niger and AMU from Algeria to Niger and Nigeria. Once Along the Nigeria completed, this project will dramatically Nigeria- improve both telecommunication and Algeria Gas internet access in the three states and Pipeline neighbouring states making international Project transmission capacity cheaper. The project is Alignment expected to be operational in 2014. Dakar- Senegal Senegal, ECOWAS, This is a combination of the Trans-African Ndjamena- Mali, ECCAS, Highway 5 (Dakar to N'djamena) and 6 Djibouti Burkina COMESA (N'djamena to Djibouti) with a total length of Road and Faso, Niger, and IGAD 8,715Km (4,496Km and 4,219Km Rail Project Nigeria, respectively). Cameroon, Chad, Pre-feasibility study for the project was Sudan, completed. Ethiopia, and Djibouti North-South South South SADC, The North-South Corridor links the port of Corridor Africa Africa, COMESA Durban to the Copperbelt in DR Congo and Road and Botswana, and EAC Zambia and has spurs linking the port of Dar Rail Project Mozambiqu es Salaam and the Copperbelt and Durban to e, Zambia, Malawi Zimbabwe, Namibia, The review of studies done on this project Tanzania, has been finalized. Malawi,

24 Swaziland, DRC, and Angola Kinshasa- Republic of Congo ECCAS, The project is aimed at linking the Cities of BrazavilleBri Congo Republic COMESA Kinshasa and Brazaville. dge Road and DRC and SADC and Rail Feasibility studies for the project have been Project done. Nigeria- Nigeria Nigeria, ECOWAS It is a 4,300Km of natural gas pipeline from Algeria Gas Niger and and AMU Nigeria to Algeria. Pipeline Algeria Project The project is awaiting the resolution of Sonatrach’s (Algeria) participation in Nigeria’s upstream activities. ICT Rwanda All African All RECs This project will provide all countries in Broadband Countries Africa with abundant and affordable and Link to communication and information capacity to Fibre Optic enable them become participants in the into global information society and reap the Neighbourin benefits of the knowledge economy of the g States 21st Century. Project Consultations with Member States are ongoing. Water Egypt These projects are yet to be defined by the Management, Government of Egypt. River and Rail Transport Project

25 Table 2: Selected8 PIDA-PAP Projects

Benefiting Project Countries REC Description Energy Sector Great Millenium Renaissance Ethiopia, COMESA, Develop a 50 MW plant to supply domestic Dam Nile Basin IGAD market and export electricity on EAPP Mozambique, Mphamda- Zambezi Hydroelectric power plant with a capacity of Nkuwa Basin SADC 1,500 MW for export on SAPP market DRC Congo 4200 MW capacity run of river hydropower Inga III Hydro River ECCAS station on the Congo River with eight turbines 128 MW of hydropower capacity, 930 Km Senegal, from the mouth of the Gambia River to supply Sambagalou OMVG ECOWAS Senegal, Guinea, Guinea Bissau and Gambia Nigeria, Nigeria-Algeria Niger, UMA, 4100 km gas pipeline from Warri to Hassi Pipeline Algeria ECOWAS R'Mel in Algeria for export to Europe Transport Sector This is phase I of the continental connectivity programme that focuses on completion and TAH standardization of the TAH missing links by Programme Africa Continental 2030 Single African Sky phase I (design and This is a continental programme that will initial create a high-level, satelite-based air based implementation) Africa Continental navigation system for the African continent This programme includes both the development of model smart corridor Smart Corridor technology and the design and the Programme implementation of a continental and regional Phase I Africa Continental corridor efficiency monitoring system Trans-boundary Water Resources Sector Regulation dam to improve navigability of Congo River Obangui River with added Hydropower Palambo Basin ECCAS component Hydropower station in Guinea with irrigation Niger River water supply for Mali and regulation of the Fomi Basin ECOWAS Niger river

8 PIDA-PAP has 51 projects in the energy, transport, trans-boundary water resources and ICT 26 Lesotho HWP phase II Orange- hydropower Sengu River Water transfer programme supplying water to component Basin SADC Gauteng Province in South Africa ICT Sector Improving the environment for the private ICT Enabling sector to invest in high-speed broadband Environment Continental Continental infrastructure Securing each country connection by at least two broadband infrastructure and ensuring the ICT Terrestrial access to submarine cable to all landlocked for Connectivity Continental Continental countries Internet Exchange Point (IXP) Providing Africa with adequate internet node Programme Continental Continental exchange to maximize internal traffic

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