Published on February 18, 2014
Achieving Regional Integration in North Africa Challenges & solutions African Development Bank Group AfDB Moono Mupotola Division Manager Regional Integration & Trade Dept. 1
Why it matters Increased returns and competition Collective Bargaining Power Management of Shared Natural Resources Security Increased investments Economies of scale Social development Economic diversification
The dimensions of integration Physical infrastructure Regional Public Goods Soft Infrastructure
What needs to be done Ensure that integration has a development impact Strengthen institutional architecture for regional integration; Enhance physical connectivity through the development of regional or sub regional infrastructure that adequately connects production zones with regional markets; Scale up trade facilitation assistance through harmonization and/or mutual recognition of regulations, procedures and standards; Promote business environment reforms that facilitate regional private sector cooperation and cross border investments; Accelerate the domestication of regional agreements.
FDI and RI • Think regionally: Made in the Maghreb? or Made in UMA? • Maghreb as single production base: Maghreb Investment Area (FDI) • RI provides opportunities for TNCs to expand in a region and develop value chain arrangements. • Hub and spokes model
TF & The rise of Global Value Chains Source: Boeing Co 6
Regional Integration in NA Status Opportunities Challenges Renewed political commitment for Regional Integration Well developed Services sectors: Finance, Tourism, Telecommunications Institutional architecture does not cover all 6 NA countries Mixed outcomes arising out of the Arab spring High prevalence of NTBs and NTMs Vibrant private sectors in Tunisia, Morocco, Egypt Inadequate cross-border/maritime trade facilitation Reliance on oil, natural resources, tourism and remittances Surpluses of capital in Lybia, Algeria Manufactured exports are labor intensive & low tech Weak regional institutions Lowest levels of intra-regional trade in Africa Potential to create wealth through high value added industries Low domestication of Regional Agreements
What the Bank plans to do Our Focus • Making Africa Accessible Our approach • To leverage the renewed interest and mobilize additional resources in support of RI Our priorities • Improving dialogue; • Supporting governance reforms; • Operationalizing PIDA Priority Action Plan; • Trade Facilitation; • Private Sector development • Connecting Africa to Africa The Bank is currently developing a Regional Integration Strategy Paper for North Africa
Sample of planned regional operations in PIDA SECTOR TRANSPORT DESCRIPTION Trans-Maghreb Highway: The programe will cover the following countries: Morocco to Egypt through Algeria, Tunisia and Libya. It will design and implement a smart corridor system and install “state of the art” one-stop border posts. COST US$ 75 millions North Africa Transmission: 2,700 km line from Morocco to Egypt through Algeria, Tunisia and Libya. TBD Nigeria–Algeria Pipeline: 4,100 km gas pipeline from Warri to Hassi R’Mel in Algeria for export to Europe 1,200 US$ millions Nubian Sandstone Aquifer System: Implementation of regional strategy for the use of the aquifer system TBD North-West Sahara Aquifer System: Prefeasibility studies for improved use of the aquifer system TBD ENERGY Water Resources Management
Connecting Africa to Africa • Growing middle class; increased purchasing power; • Opportunities: Real Estate Development; financial services, tourism, Energy, Agriculture and mining. • More integrated regional blocs & the promise of the Tripartite: $1 trillion market, 600 million consumers, 26 Countries, 58% of Africa’s GDP. • Language is not a barrier!
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