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Africa needs increased integration

05.10.2016

Experts from the Kiel Institute for the World Economy have called for more integration on the African continent. “An abundance of borders has long divided the continent’s 54 countries, limiting economic potential. Fixing common problems such as a shortage of roads takes teamwork—and in turn should lead to more integration,” said Manfred Wiebelt at the 11th PEGNet conference that took place at the University of Rwanda in Kigali. Wiebelt is Director of the Poverty Reduction Equity Growth Network (PEGNet) and a Senior Research Fellow in the research area Poverty Reduction, Equity, and Development at the Kiel Institute. “African countries need to open up. Average transport costs in Africa are twice the world average and harm trade on the continent more than anything else,” said Wiebelt.

Experts from the Kiel Institute for the World Economy have called for more integration on the African continent. “An abundance of borders has long divided the continent’s 54 countries, limiting economic potential. Fixing common problems such as a shortage of roads takes teamwork—and in turn should lead to more integration,” said Manfred Wiebelt at the 11th PEGNet conference that took place at the University of Rwanda in Kigali. Wiebelt is Director of the Poverty Reduction Equity Growth Network (PEGNet) and a Senior Research Fellow in the research area Poverty Reduction, Equity, and Development at the Kiel Institute. “African countries need to open up. Average transport costs in Africa are twice the world average and harm trade on the continent more than anything else,” said Wiebelt.

At the 11th PEGNet conference in Rwanda, which was co-organized by the Institute for Policy Analysis and Research (IPAR-Rwanda) and the German Agency for International Cooperation GIZ, researchers, experts, and policy makers from all over the world met to discuss ways to bring more prosperity to the African continent. Despite there being general agreement on the need for more integration on the African continent by the majority of the participants attending the conference, the participants did not feel that Africa should replicate the European model of deep regional integration. “This conference has attracted many experts and we learned a lot from them. We can emulate integration best practices from all over the world but also consider our own models,” said Eugenie Kayitesi, Director of IPAR-Rwanda. There was a consensus at the conference, that Africa should opt for an institutionally less demanding variant of trade facilitation driven by the needs of consumers and businesses.

Rwandan Minister of Finance and Economic Planning, Amb. Claver Gatete stated “For Rwanda, regional integration is essential, because only with access to a larger regional market will the country become more attractive for the foreign investors urgently needed to sustain the spectacular growth rates of the recent past that have made the country an African success story.” He pointed to some of the pragmatic steps—such as the introduction of a joint tourist visa for neighboring East African countries or the mutual recognition of standards—that the Rwandan government has initiated to foster regional integration. Rwandan Minister of Trade and Industry, Hon. François Kanimba argued that the country’s integration within the African Community at large could only be called a success, if it was associated with the establishment of a strong manufacturing sector.

“A shame, then, that regional economic deals are often poorly implemented. African firms selling goods on the continent still face an average tariff rate of almost 9 percent, compared to 2.55 percent overseas. That is one reason why intra-African trade is well below what is seen in other poor regions,” Wiebelt said.

The 12th PEGNet Conference will take place in early September 2017 at the NADEL – Center for Development and Cooperation, ETH Zürich in Switzerland. It will be supported by the German Federal Ministry for Economic Cooperation and Development and the Swiss Agency for Development and Cooperation.

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