The Sierra Leone Telegraph: 15 May 2013
A new report on Africa’s economic competitiveness published last week, says that the strides made by African economies in achieving economic growth, must be accompanied by efforts to boost long-term competitiveness, if the continent is to ensure sustainable improvements in living standards.
The Africa Competitiveness Report 2013, released last week by the African Development Bank, the World Bank and the World Economic Forum, identifies closer regional integration as an important driver for enhancing economic competitiveness.
‘Connecting people, consolidating peace and accelerating economic transformation’, were the main themes of a high-level seminar organized by the African Development Bank in Abidjan last Monday, May 13.
The aim of the event was to promote regional integration in the four Mano River Union (MRU) countries of Côte d’Ivoire, Liberia, Sierra Leone and Guinea.
Sponsored by the Bank, in close collaboration with the Mano River Union Secretariat, this new initiative proposes a major effort to address the region’s infrastructure gap, in transportation and energy in particular.
The Mano River Initiative will connect people within and between these countries, promote trade and private sector development, thereby helping the region transition out of fragility and instability.
As Amadou Zakou, Manager of the Bank’s Energy Division, pointed out, “Access to electricity in the Mano River countries is among the lowest and most expensive in the word, with coverage of 15 per cent, compared with the African average of over 40 per cent, and 80 per cent for the rest of the world.”
Electricity costs are nearly twice as high as the African average, and nearly four times as high, compared with the world average.
Intra-regional trade in the region is also one of the lowest in the world, largely suffering from poor road quality. “The share of paved roads in the region is between six and nine per cent, versus an African average of 18 per cent,” said Manuel Benard, Transport Economist at the African Development Bank.
This initiative aims at reducing these gaps by presenting a comprehensive framework for infrastructure development of the MRU countries, focusing on two main pillars: energy and roads.
The initiative will help finance major infrastructure backbones, including the interconnection lines from Côte d’Ivoire, Liberia, Sierra Leone and Guinea (CLSG) and the Trans African Highway, together with supplemental projects.
“Thanks to all such initiatives, the sub-region is on the rise,” said Sarah Daraba Kabba, Secretary General of the Mano River Initiative, who stated her commitment to play a key role in supporting this initiative.
Projects would be regionalized to facilitate their funding, while providing incentives for regional integration.
“By grouping and placing large and expensive infrastructure in a multi-donor platform, the initiative would free up resources for country interventions,” said Franck Perrault, Regional Director of the Bank’s West Africa Department.
The high-level workshop, attended by Ministers of Finance and those in charge of infrastructure and public works, as well as the MRU Secretariat, enabled the Bank to exchange with the countries on the proposed institutional arrangements, review priority programs and projects.
“We welcome this initiative,” said Albert Toikeusse Mabri, Ivorian Minister of State, Minister of Planning and Development. “We look forward to working closely with the Bank on this important endeavour.”
The The Africa Competitiveness Report 2013 maps out the following key policy challenges in establishing closer regional integration.
Closing the competitiveness gap
Africa’s competitiveness as a whole trails other emerging regions – especially in quality of institutions, infrastructure, macroeconomic policies, education and technological adoption – while big gaps persist between its highest and lowest ranked economies.
The report assesses Africa’s success in creating the social and environmental factors that are necessary to address or mediate these gaps.
Africa’s exports remain too heavily focused on commodities and its share of world trade remains low, despite numerous regional economic communities and domestic market liberalization. Intra-African trade is particularly limited.
The report identifies cumbersome and non-transparent border administration, particularly import-export procedure, the limited use of information communication technologies (ICT) and persistent infrastructure deficit as major barriers to higher levels of regional integration.
It also shows that these challenges are particularly pronounced for Africa’s landlocked economies.
Building better infrastructure
Africa’s infrastructure deficit presents a serious impediment to regional integration, a problem that is made more pronounced by growth in consumer markets and urbanization.
Developing adequate and efficient infrastructure will assist African economies to increase productivity in manufacturing and service delivery, contribute to improvements in health and education and help deliver more equitable distribution of national wealth.
The report examines how developments in energy, transportation and ICT can be deployed to maximize the benefits of regional integration.
Defined as multi-year, generally public-private investments aimed at accelerating export facing-industries and their supporting infrastructure, growth poles represent important ways of building productive capacity and boosting regional integration through the attraction of investment.
As the World Bank has invested in growth poles for a number of years, the report looks at how best practice can be deployed to deliver further benefits across the continent.
“Africa’s growth needs to be seen in the wider international context, where encouraging gains in economic growth belie an underlying weakness in its long-term competitiveness. Regional integration is key to addressing this weakness through the delivery of wider social and economic benefits and should be prioritized by Africa’s leaders as they look to ensure that Africa delivers on its promise,” said Jennifer Blanke, Chief Economist, World Economic Forum.
“Sustained high economic growth often occurs in an environment where there is a meaningful infrastructure development. It is therefore imperative that planning for both national and regional infrastructure projects is coupled with the requisite legal and regulatory framework that will allow for increased involvement of the private sector in infrastructure development on a public-private partnerships model” said Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank (AfDB).
“Improved infrastructure investment in Africa is crucial for the continent’s competitiveness and productivity; and contributes to spatial-inclusion and reducing spatial inequalities,” he said.
“Africa has been enjoying an economic transformation, with growth rates of more than 5 percent annually over the past decade,” says Gaiv Tata, Director, Africa Region, World Bank Group.
“To turn its economic gains into sustainable growth and shared prosperity, Africa’s public and private sectors must work together to connect the continent’s markets, deepen regional integration, and adopt reforms that enhance national competitiveness.”
Also included in the report are detailed competitiveness profiles of 38 African economies. The profiles provide a comprehensive summary of the drivers of competitiveness in each of the countries covered by the report, and are used by for policy-makers, business strategists and other key stakeholders, as well as those with an interest in the region.