African heads of state have in the recent past often broadcast to the world how Africa was “open for business” and that the continent had attracted more than $95 billion in foreign direct investment over the past two years.
However, as those investments begin to see a slow decline, African Development Bank experts say that regional integration is now more pertinent than ever in continuing the continent’s economic growth.
Africa experienced 3.5 percent real gross domestic product growth in 2018, similar to its 3.6 percent growth in 2017, according to the AfDB’s report “2019 African Economic Outlook,” released last month.
East Africa remains the continent’s fastest-growing region and is expected to reach 6.1 percent growth by 2020.
A rather unstable Central Africa could be the reason why it remains the continent’s weakest performing region, with just 2.2 percent growth; while West Africa reported a “stable outlook” driven by recovery in Nigeria and strong growth in Côte d’Ivoire and Senegal.
The special theme this year is regional integration for Africa’s economic prosperity—integration not just for trade and economic cooperation but also for the delivery of regional public goods.
As per the 2019 Outlook, it looks at the gains possible from regional public goods, such as synchronizing financial governance frameworks, pooling power, opening skies to competition, and opening borders to free movements of people, goods, and services.
It goes on to say that in order to ensure that Africa’s total gains rise to 4.5 percent of its GDP, or $134 billion a year, then some trade policy actions are necessary. These include; eliminating all of today’s applied bilateral tariffs in Africa and keeping rules of origin simple, flexible, and transparent.
Additionally, other actions would involve removing all nontariff barriers on goods and services trade on a most-favored-nation basis, implementing the World Trade Organization’s Trade Facilitation Agreement to reduce the time it takes to cross borders and the transaction costs tied to nontariff measures as well as negotiating with other developing countries to reduce by half their tariffs and nontariff barriers on a most-favored-nation basis.
In its last part, the report provides short-to-medium term forecasts on the evolution of key macroeconomic indicators for all 54 regional member countries, as well as analysis on the state of socio-economic challenges and progress made in each country.