Economic Commission for Africa 2011 Dialogue with the Economic and Social Council July 2011...

Economic Commission for Africa

2011 Dialogue with the Economic and Social Council

July 2011

“Regional Cooperation as a Catalyst for Development”

Abdoulie Janneh, USG & Executive Secretary of the Economic Commission for

Africa


July 2011

“Regional Cooperation as a Catalyst for Development”

Abdoulie Janneh, USG & Executive Secretary of the Economic Commission for

Africa


OutlineOutlineOutlineOutline

Africa’s Improved Economic Performance Inevitability of Regional Cooperation in Africa Potential of Regional Cooperation in Africa Africa’s Regional Cooperation Efforts Promoting Regional Integration: Opportunities

and Challenges Transboundary Cooperation Improved Participation in Global Processes Conclusions

Africa’s Improved Economic Performance Inevitability of Regional Cooperation in Africa Potential of Regional Cooperation in Africa Africa’s Regional Cooperation Efforts Promoting Regional Integration: Opportunities

and Challenges Transboundary Cooperation Improved Participation in Global Processes Conclusions


Africa’s Improved Economic PerformanceAfrica’s Improved Economic PerformanceAfrica’s Improved Economic PerformanceAfrica’s Improved Economic Performance

Africa’s economic performance quite encouraging: grew on average by nearly 6% since 2000 showed relative resilience during the global economic

crisis, growing at 2.4% in 2009

Africa’s economic performance quite encouraging: grew on average by nearly 6% since 2000 showed relative resilience during the global economic

crisis, growing at 2.4% in 2009

Growth performance (average)

Source: ARIA IV, 2010 ECA, compiled from IMF website


Africa’s Improved Economic PerformanceAfrica’s Improved Economic PerformanceAfrica’s Improved Economic PerformanceAfrica’s Improved Economic Performance

Six of the world’s ten fastest growing economies are in Africa

Prospects of wider African markets and participation in large scale regional infrastructure projects

Improved economic performance due to: better macroeconomic performance and high commodity

prices highly successful regional cooperation efforts to reduce

conflicts, integrate economies, improve transboundary cooperation and engage more in global economic processes

Outcome of a wider regional effort to improve governance in the continent the New Partnership for Africa’s Development (NEPAD)

Six of the world’s ten fastest growing economies are in Africa

Prospects of wider African markets and participation in large scale regional infrastructure projects

Improved economic performance due to: better macroeconomic performance and high commodity

prices highly successful regional cooperation efforts to reduce

conflicts, integrate economies, improve transboundary cooperation and engage more in global economic processes

Outcome of a wider regional effort to improve governance in the continent the New Partnership for Africa’s Development (NEPAD)


Inevitability of Regional Cooperation in AfricaInevitability of Regional Cooperation in AfricaInevitability of Regional Cooperation in AfricaInevitability of Regional Cooperation in Africa

Regional cooperation expected to continue to contribute to growth and development of Africa

Great priority from the early post-independence period in the 1960s

RC not as a matter of choice for African countries but necessity

Of the countries on the continent, 39 have fewer than 15 million people — and 21 fewer than 5 million

32 countries have per capita incomes below $500 a year (10% of the world average of $5,000)

While Africa contains 12% of the world’s population, it produces just 2% of its output

15 out of 53 African countries are landlocked while 13 of them have a land area less than 40,000 square km

The imperative of RC in Africa is also due to the arbitrary nature of colonially inherited boundaries

Regional cooperation expected to continue to contribute to growth and development of Africa

Great priority from the early post-independence period in the 1960s

RC not as a matter of choice for African countries but necessity

Of the countries on the continent, 39 have fewer than 15 million people — and 21 fewer than 5 million

32 countries have per capita incomes below $500 a year (10% of the world average of $5,000)

While Africa contains 12% of the world’s population, it produces just 2% of its output

15 out of 53 African countries are landlocked while 13 of them have a land area less than 40,000 square km

The imperative of RC in Africa is also due to the arbitrary nature of colonially inherited boundaries


Inevitability of Regional Cooperation in AfricaInevitability of Regional Cooperation in AfricaInevitability of Regional Cooperation in AfricaInevitability of Regional Cooperation in Africa

Need to reduce high freight and transport cost Need to reduce high freight and transport cost

Transport costs (freight costs as a percentage of total import value)

Note: The transport cost rate is the ratio of transport costs as a percentage of the value of imports.Source: ARIA IV, 2010 Calculations by ECA


Potential of Regional Cooperation in AfricaPotential of Regional Cooperation in AfricaPotential of Regional Cooperation in AfricaPotential of Regional Cooperation in Africa

Political unity increasingly important great potential for regional cooperation to contribute to growth and dev’t in Africa

For instance:

If it was a single economic unit, the value of Africa’s GDP would be $1543 billion which is comparable to Brazil with a GDP of about $1575 billion

Africa’s total population of one billion people is in the same range as China and India the potential of using education to create a skilled and competitive workforce

Combined consumer spending in Africa is over $900 billion while its combined foreign exchange reserves are in region of $470 billion

There are over 60 transboundary river basins in Africa home to 90% of world reserves of platinum, palladium and rhodium

Political unity increasingly important great potential for regional cooperation to contribute to growth and dev’t in Africa

For instance:

If it was a single economic unit, the value of Africa’s GDP would be $1543 billion which is comparable to Brazil with a GDP of about $1575 billion

Africa’s total population of one billion people is in the same range as China and India the potential of using education to create a skilled and competitive workforce

Combined consumer spending in Africa is over $900 billion while its combined foreign exchange reserves are in region of $470 billion

There are over 60 transboundary river basins in Africa home to 90% of world reserves of platinum, palladium and rhodium


Africa’s Regional Cooperation EffortsAfrica’s Regional Cooperation EffortsAfrica’s Regional Cooperation EffortsAfrica’s Regional Cooperation Efforts

Africa has sought to overcome its economic limitations and achieve the full benefits of its comparative strengths

Africa paid close attention to deepening these processes over the years

Such cooperation evident from the opportunities and challenges arising from actions that have been taken thus far:

Promote regional cooperation Scale up transboundary cooperation Build consensus for Africa’s engagement with the outside

world

Africa has sought to overcome its economic limitations and achieve the full benefits of its comparative strengths

Africa paid close attention to deepening these processes over the years

Such cooperation evident from the opportunities and challenges arising from actions that have been taken thus far:

Promote regional cooperation Scale up transboundary cooperation Build consensus for Africa’s engagement with the outside

world


Promoting Regional Integration: Opportunities Promoting Regional Integration: Opportunities and Challengesand Challenges


Regional integration offers opportunities to African development Examples: Institutions of Integration, Infrastructure and Trade

Regional integration offers opportunities to African development Examples: Institutions of Integration, Infrastructure and Trade

Institutions of Integration:

Abuja TreatyAbuja Treaty establishing the establishing the African Economic African Economic Community in 1991 Community in 1991 and the creation of the and the creation of the African Union in 2002 African Union in 2002 RECsRECs building building blocs for continental blocs for continental integrationintegration

By 2003 out of 53 By 2003 out of 53 African countries, 26 African countries, 26 were members of 2 were members of 2 RECs, 20 were RECs, 20 were members of 3 RECs, members of 3 RECs, while 1 country while 1 country belonged to 4 RECsbelonged to 4 RECs

A challenge !A challenge ! but but through ECA’s 2through ECA’s 2ndnd ARIA report, the AU ARIA report, the AU Heads of State and Heads of State and Government decided Government decided to limit the no. of to limit the no. of recognized RECs to recognized RECs to eighteight

Institutions of Integration:

Abuja TreatyAbuja Treaty establishing the establishing the African Economic African Economic Community in 1991 Community in 1991 and the creation of the and the creation of the African Union in 2002 African Union in 2002 RECsRECs building building blocs for continental blocs for continental integrationintegration

By 2003 out of 53 By 2003 out of 53 African countries, 26 African countries, 26 were members of 2 were members of 2 RECs, 20 were RECs, 20 were members of 3 RECs, members of 3 RECs, while 1 country while 1 country belonged to 4 RECsbelonged to 4 RECs

A challenge !A challenge ! but but through ECA’s 2through ECA’s 2ndnd ARIA report, the AU ARIA report, the AU Heads of State and Heads of State and Government decided Government decided to limit the no. of to limit the no. of recognized RECs to recognized RECs to eighteight




Infrastructure:

Africa needs first rate infrastructure

The small size of African economies a challenge ! e.g. larger projects such as the INGA Dam Project (which can supply 60% of Africa’s hydropower needs) economically unviable and raising finance a challenge

The African Development Bank set aside resources to finance cross-border infrastructure projects and regional public goods

More of such facilities are needed and the establishment of the African Finance Corporation would lend further impetus

Hoped that the G20 High Level Panel on Infrastructure Investment will come up with recommendations that help Africa to obtain resources

Infrastructure:

Africa needs first rate infrastructure

The small size of African economies a challenge ! e.g. larger projects such as the INGA Dam Project (which can supply 60% of Africa’s hydropower needs) economically unviable and raising finance a challenge

The African Development Bank set aside resources to finance cross-border infrastructure projects and regional public goods

More of such facilities are needed and the establishment of the African Finance Corporation would lend further impetus

Hoped that the G20 High Level Panel on Infrastructure Investment will come up with recommendations that help Africa to obtain resources




Trade:

Intra-Africa trade is about 10% low compared to other regions but poses an opportunity increasing through product diversification and trade facilitation

Recent example: the on-going Aid for Trade pilot project on the North-South Corridor to facilitate trade in Eastern and Southern Africa in the Chirundu One Stop Border Post, clearing time for commercial trucks went down from 5 days to 1-2 days whilst for passenger coaches it went down from 2 hours to 1 hour A "fast lane facility" even allows commercial trucks to be cleared in 5 hours

Trade helped the free movement of people especially in the East African Community and Economic Community of West African States

Trade:

Intra-Africa trade is about 10% low compared to other regions but poses an opportunity increasing through product diversification and trade facilitation

Recent example: the on-going Aid for Trade pilot project on the North-South Corridor to facilitate trade in Eastern and Southern Africa in the Chirundu One Stop Border Post, clearing time for commercial trucks went down from 5 days to 1-2 days whilst for passenger coaches it went down from 2 hours to 1 hour A "fast lane facility" even allows commercial trucks to be cleared in 5 hours

Trade helped the free movement of people especially in the East African Community and Economic Community of West African States


Transboundary CooperationTransboundary CooperationTransboundary CooperationTransboundary Cooperation

Transboundary Cooperation in Africa:

Jointly manage river basins Establish regional power pools Improving education, health including HIV/AIDs, agriculture,

transport and communications The Niger Basin Authority, Lake Chad Basin Authority, Africa Rice Centre, and regional power pools in East and West Africa and regional strategies in the various sectors. Yamoussokoro Declaration

Education: various pan-African initiatives e.g. Second Decade of Education for Africa (2006-2015), Pan-African University, Arusha Convention for promoting academic mobility of lecturers and students in the continent

Increasing the private sector is using regional cooperation agreements including the right of establishment in existing regional economic groupings to provide services across national boundaries e.g. Globacom, Ecobank, ASKY

Transboundary Cooperation in Africa:

Jointly manage river basins Establish regional power pools Improving education, health including HIV/AIDs, agriculture,

transport and communications The Niger Basin Authority, Lake Chad Basin Authority, Africa Rice Centre, and regional power pools in East and West Africa and regional strategies in the various sectors. Yamoussokoro Declaration

Education: various pan-African initiatives e.g. Second Decade of Education for Africa (2006-2015), Pan-African University, Arusha Convention for promoting academic mobility of lecturers and students in the continent

Increasing the private sector is using regional cooperation agreements including the right of establishment in existing regional economic groupings to provide services across national boundaries e.g. Globacom, Ecobank, ASKY


Transboundary CooperationTransboundary CooperationTransboundary CooperationTransboundary Cooperation

Inter-African air connections

between the most populous cities

HOW DO WE CONNECT?HOW DO WE CONNECT?


Improved Participation in Global ProcessesImproved Participation in Global ProcessesImproved Participation in Global ProcessesImproved Participation in Global Processes

Africa’s participation in global trade processes regional cooperation acted as a catalyst the normative and analytical work of ECA and its convening power

Global negotiations and processes in trade, climate change and international finance at the forefront of concerns since the turn of the Millennium

African countries relatively disadvantaged in such processes and negotiations but there was a breakthrough in climate change negotiations in Copenhagen

ECA’ role:

Building capacity Producing relevant policy papers Providing forums for dialogue and consensus building Establishment of the African Trade Policy Centre and

African Climate Policy Centre Producing technical papers on reform of the international financial

system and official development assistance to backstop Africa’s participation in G20 and G8 meetings

Africa’s participation in global trade processes regional cooperation acted as a catalyst the normative and analytical work of ECA and its convening power

Global negotiations and processes in trade, climate change and international finance at the forefront of concerns since the turn of the Millennium

African countries relatively disadvantaged in such processes and negotiations but there was a breakthrough in climate change negotiations in Copenhagen

ECA’ role:

Building capacity Producing relevant policy papers Providing forums for dialogue and consensus building Establishment of the African Trade Policy Centre and

African Climate Policy Centre Producing technical papers on reform of the international financial

system and official development assistance to backstop Africa’s participation in G20 and G8 meetings


ConclusionConclusionConclusionConclusion

The presentation intended to give a flavour of how regional cooperation is promoting growth and development in Africa

There is much more that is taking place important to underscore that regional cooperation is taken very seriously in Africa the process has contributed to its recent good economic performance

However, there is much that still need to be done:

The work of the RECs still needs to be further harmonized Arrangements to negotiate as one could be extended to

other negotiating forums Intra-Africa trade needs to be greatly boosted Financing is required for climate change adaptation, to

scale up quality of primary education and build much needed infrastructure

The presentation intended to give a flavour of how regional cooperation is promoting growth and development in Africa

There is much more that is taking place important to underscore that regional cooperation is taken very seriously in Africa the process has contributed to its recent good economic performance

However, there is much that still need to be done:

The work of the RECs still needs to be further harmonized Arrangements to negotiate as one could be extended to

other negotiating forums Intra-Africa trade needs to be greatly boosted Financing is required for climate change adaptation, to

scale up quality of primary education and build much needed infrastructure

Economic Commission for Africa

Thank you for your attention !Thank you for your attention !

www.uneca.orgwww.uneca.org

Thank you for your attention !Thank you for your attention !

www.uneca.orgwww.uneca.org

Economic Commission for Africa 2011 Dialogue with the Economic and Social Council July 2011...

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