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Overview: Regional Integration in Africa and the World Bank

Overview
Regional Integration in Africa

Africa's unique physical, economic and political geography poses many challenges to economic development and management of shared public goods. Political borders are often not aligned with economic and natural resources and many countries are landlocked. National economies and populations are generally quite small, but cover large geographic expanses with poor connective infrastructure. Regional integration and cooperation offers the means to overcome these obstacles and to be competitive in the global marketplace.

Many African countries are increasingly recognizing that collaborative actions and regional approaches are critical to achieving their development goals. The benefits from pursuing regional integration are myriad, including: i) reaping economies of scale or other efficiencies by acting collectively in the pursuit of common objectives to increase local supply capacity and improve access to markets; ii) integrated or harmonized treatment of trans-boundary issues such as trade, regulatory frameworks and policies, regional infrastructure and other cross border issues; and iii) management of shared natural resources.  These solutions are particularly relevant for the many African countries that have small economies, small populations or are land-locked. Small countries often find it difficult to fund the large fixed costs associated with major infrastructure, making a regional approach attractive.  Linking small markets can unlock the benefits of agglomeration and scale economies and spread investment opportunities and growth beyond current centers of development.

Countries, Regional Economic Communities (RECs) and specialized regional institutions, as well as regional development organizations, are developing strategic regional frameworks and building capacity to pursue regional integration across various regions.  There is a growing demand to scale up regional solutions with a greater focus on mainstreaming regional issues in national planning, tackling the climate change agenda, regional infrastructure and the missing links, economic integration, and regional public goods. The World Bank’s regional program is crucial to the effort to moving the regional integration agenda forward, in close collaboration with the member states and other development partners.

Africa’s diverse array of regional institutions are already promoting greater political and economic integration among neighboring countries and tackling shared resource management issues. At the continental level, the African Union seeks to unite African countries under a single political union and common market. At the regional level, Africa’s Regional Economic Communities bring together countries to address common development challenges and deepen economic and political integration. Africa’s regional technical bodies focus on specific cross-border issues such as river basin management, regional power trading and cross-border disease transmission. Strengthening the capacity of these institutions is critical to accelerating the integration agenda.

The World Bank has long been a champion of regional integration issues and has significantly scaled up support in recent years following the launch of the Africa Regional Integration unit in 2004. World Bank assistance for regional initiatives remains multi-form: Financing and advisory services for regional investment programs, technical assistance and analytical work on integration issues, and capacity building for regional institutions– using the Bank’s convening power to draw attention to the integration agenda and leverage collaboration and resources from donor partners and the private sector.

The Regional Integration Assistance Strategy (RIAS) for Sub-Saharan Africa guides the World Bank’s support for regional programs. Developed through extensive consultation with stakeholders including African governments, regional institutions, donor partners, civil society and the private sector, the RIAS is a reflection of the continent’s own integration priorities and areas of World Bank comparative advantage.

RIAS Strategic Framework (2008-Present)

Strategic Pillar I - Regional Infrastructure

Regional transport and communication connections are essential to increase intraregional trade and global exports, enabling the smooth movement of goods, services, capital, people and ideas across borders. Regionally integrated power systems can achieve economies of scale impossible at a national level, lowering costs to the end-user, improving supply reliability and offering more environmentally friendly generation methods. Equally important is the accompanying "software" to enable effective use of infrastructure systems, such as harmonization of technical standards and development of common regulations, procedures, and legal codes across countries.

Strategic Pillar II - Institutional Cooperation for Economic Integration

Addressing the invisible barriers to connectivity in Africa is equally, if not more important than addressing the physical infrastructure deficit. Institutional cooperation and integration at the regional level are essential to surmount the policy, operational, and institutional constraints to the free movement of goods, services and people that inhibit expansion of markets. Strengthened economic integration includes enhancing economies of scale, trade diversification, and providing learning experiences that help African firms launch successfully into global markets. When combined with improved regional economic and political stability, closer economic integration can also enhance incentives for both domestic and foreign investment. By complementing benefits from regional infrastructure, closer institutional cooperation and collaboration will leverage gains in competitiveness and encourage growth through increased intraregional and global trade.

Strategic Pillar III - Coordinated Interventions to Provide Regional Public Goods

Other important development challenges that cut across national boundaries also can be addressed through coordinated interventions. Campaigns against HIV/AIDS are reinforced by action along regional trade corridors. Campaigns against malaria and TB are more effective when organized among groups of countries. Similar considerations apply to controlling migratory pests. Coordinated intervention also is needed for sustainable management of shared natural resources –– particularly water and sensitive ecosystems.

Africa also is moving to create new types of regional public goods based on improved regional knowledge. More effective agricultural research and dissemination through developing regional centers of excellence is but one example that holds considerable potential. Conversely, coordinated interventions are being developed to tackle some types of negative public goods, such as food insecurity from flooding, pests, and drought; risks to health and ecosystems from accidental pesticide stockpile leaks; and potential impacts of climate change.

Cross-Cutting Theme – Connecting Regional and National Planning

Successful regional initiatives are rooted in coordinated national actions: harmonizing policies, developing complementary institutional capacity and knowledge, and coordinating implementation and management of shared programs at the national level. Strengthening of regional strategic planning and building stronger interconnections with national development planning requires building the capacity of key regional bodies and the national planning organs to which they relate.

Support to regional integration is already achieving results. Regional financing helps address "missing links" in Africa’s energy, transport and ICT infrastructure networks. Investments in trade facilitation and regional capital markets have lowered the cost of doing business, thus supporting intra-African trade and investment and decreasing barriers between markets. Regional financing is also helping to deliver regional public goods within the fields of health, agriculture and the environment.

Energy

The Bank is helping finance the addition of 1360MW of hydropower generation capacity and 2755km of cross-border transmission lines to enable the exchange of power generated from clean, lower cost sources to neighboring countries.      

Transport and Trade Facilitation

Over three thousand kilometers of roads are under rehabilitation and/or construction along commercial transport corridors. Improved infrastructure coupled with trade facilitation measures have reduced the average transit times for goods by over 50% along some key corridors.

Information and Communications Technology

Twenty countries are being supported to connect to international broadband networks, construct regional backbone infrastructure and implement telecoms sector reforms to increase competition and attract private investment.  As a result, the cost of connectivity has fallen by as much as 85% in East Africa, with similar results expected in West and Central Africa. 

Finance

Member countries of Africa Trade Insurance (ATI) have been able to offer risk mitigation products to secure financing and services in pursuit of their long term development needs. As a result, ATI have helped facilitate over $7 billion worth of cumulative trade and investments into these countries.

Agriculture

Seventeen new agricultural technologies with improved yields of between 20-40% have been developed at regional centers of specialization in West Africa and disseminated across the region, with over 100,000 hectares now under cultivation employing these technologies.   

Environment and Water Resources

Regional financing is helping to achieve the multi-sectoral development of environmental and water resources. Support has focused institution building, flood prediction and control, irrigation, environmental protection, livelihoods development and reduction of waterborne illness.  Bank support has helped facilitate the Water Charter agreed between the nine riparian states of the Niger River Basin.  In key river basins in Africa, the Bank is now supporting the development of large scale hydropower infrastructure for power generation and associated multi-purpose developments, such as irrigation and tourism.

Fisheries

Support to collaborative marine fisheries management among coastal countries in West Africa has led to a reduction in illegal fishing by foreign trawlers and increased yields and value added of fisheries in local economies.

Health

Over 30,000 people have accessed Voluntary Counseling and Testing (VCT) services and over nine million condoms have been distributed among highly mobile populations along the Abidjan-Lagos transport corridor. In East Africa, nearly 4,000 people with drug-resistant tuberculosis have now received a TB drug susceptibility test from one of several new regional public health and surveillance laboratories. Over 2.5 million insecticide-treated bed nets have been distributed as part of malaria control efforts along the Senegal River Basin, covering 84% of children under five and nearly eradicating incidence in some areas of the Basin.

Regional Economic Communities

The Regional Integration Action Strategy (RIAS) is closely aligned with the strategies of the Regional Economic Communities (RECs) in the Africa region. Regional Integration works closely with the following RECs:

Economic Community of West African States (ECOWAS)

  • Member States: Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea , Guinea Bissau, Côte d’Ivoire, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo.

West African Economic and Monetary Union/Union Economique et Monetaire Ouest-Africaine (WAEMU/UEMOA)

  • Member States: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo

Economic Community of Central African States (ECCAS)

  • Angola, Burundi, Cameroon, Central Africa Republic, Chad, Democratic Republic of Congo, Republic of Congo, Equatorial Guinea, Gabon, Sao Tome & Principe.

Economic and Monetary Community of Central Africa/ Communauté Economique et Monétaire de l’Afrique Centrale (CEMAC)

  • Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon

East African Community (EAC) Member States

  • Kenya, Uganda, Burundi, Tanzania, Rwanda

Southern Africa Development Community (SADC)

  • Member States: Angola, Botswana, Democratic Republic of the Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe

Southern Africa Customs Union (SACU)

  • Member States: Botswana, Lesotho, South Africa, Swaziland, Namibia

Common Market for East and Southern Africa (COMESA)

  • Member States: Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya,  Madagascar, Malawi, Mauritius, Rwanda, Seychelles, South Sudan, Sudan, Swaziland, Uganda, Zambia, Zimbabwe.

Intergovernmental Authority on Development (IGAD)

  • Member States: Djibouti, Kenya, Uganda, Ethiopia, Sudan, South Sudan, Somalia

The African Union

The Regional Integration team works closely with the African Union on a number of initiatives, and remains closely aligned with its objectives. Recent collaborations include a Technical Working Group set up to define the key issues to be proposed for consideration for the AU Summit and various activities related to trade (in particular trade in food staples).

Bilateral and Operational Partnerships

Significant co-financing of regional infrastructure projects is key to achieving results in Africa. The regional integration unit has co-financed over 40 projects with other donors totaling well over $1 billion in additional funding for regional activities. In addition to bilateral and multilateral donors, several projects have also attracted private sector funding (particularly in ICT).
In the environmental sector, the Global Environmental Facility has financed or co-financed 22 million for environmental projects. The World Bank has been also been administering a $31 million USD multi-donor trust fund for implementation of the Comprehensive Africa Agricultural Development Programme (CAADP) since 2008. The World Bank also administers the $191 Million USD Nile Basin Initiative (NBI) Multi-Donor Trust Fund.




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