A new United Nations Conference on Trade and Development (UNCTAD) report Economic Development in Africa 2009 argues that regional integration in the African continent is essential for sustained development on the continent, especially within the context of the current global economic crisis.
Subtitled “Strengthening Regional Economic Integration for Africa´s Development”, the 2009 edition of the UNCTAD annual report on Africa highlights the increasing level of investment from the Arab countries of North Africa in the wider African continent.
Better links between countries, ranging from transport infrastructure such as paved roads to banking cooperation, are needed to spur mutual economic growth, the UN body says.
Weak physical and institutional infrastructure is the key obstacle to increasing intra-African trade and investment.
This is why, at 9 percent of recorded flows of total external trade and 13 percent of recorded flows of total inward foreign direct investment (FDI), Africa currently has the world´s lowest shares of regional trade and investment, the report explains.
The report highlights the trends in “intra-African investment”, of particular interest is the increased investment from some North African countries in the continent. These investments are occurring in other regions.
Libya established a sovereign wealth fund in 2006 called the Libyan African Portfolio for Investment (LAP), which has become a dynamic force through its investments in a wide range of sectors in several African countries. One of its subsidiaries, LAP Green Network, operates telecommunications companies in Côte d´Ivoire, Niger, Rwanda and Uganda.
The LAP also funds the Libyan Arab African Investment Company, which invests in the telecommunications, mining, tourism, real estate, manufacturing and agricultural sectors, in 25 African countries across the continent.
The report says that over the last two decades Africa has made progress in creating sub-regional institutions dedicated to economic integration.
However, the establishment of sub-regional economic communities has not substantially increased intra-African trade, investment and mobility of people as expected. Hence, relative to other regions, Africa has by far the most fragmented market, the report finds.
Among the many issues that the report covers, it says that more attention should be given to creating an efficient services sector in Africa.