- Africa has a major infrastructure gap which is hindering trade between countries.
- To this end, the continent has a significant annual infrastructure financing need of $130-170 billion.
- African countries have, however, made progress in implementing regional integration even though slow policy implementation and funding gaps remain.
The Economic Commission for Africa (ECA) said Africa remains constrained by huge infrastructure gaps, noting that the continent has an estimated annual infrastructural financing need of between $130 to $170 billion.
The ECA’s Director of Regional Integration and Trade Division, Mr Stephen Karingi, stated this in a statement on Friday.
He noted that improvements are reported in access to information and communications technology constituting an important driver of the African infrastructure development index.
The ECA, however, warned that member states will need to address integration challenges, which include inadequate financial resources, poor infrastructure networks, increasing violence, terrorism and political instability and also energy challenges as Nigeria, South Africa and North African countries drive demand.
Progress report: The ECA said African countries have made commendable progress in implementing the regional integration agenda and promoting intra-regional trade presenting its assessment of progress on regional integration in Africa.
This was achieved through monitoring frameworks and tools, including the indicators developed by the ECA, the African Union (AU) Commission and the African Development Bank (AfDB) and presented ahead of the March 20 to March 21 ministerial segments of the Conference of African Ministers of Finance, Planning and Economic Development taking place in Addis Ababa, Ethiopia. Part of the statement said:
- “Member states will need to address integration challenges, which include inadequate financial resources, poor infrastructure networks, increasing violence, terrorism and political instability.
- “Furthermore, the integration agenda is experiencing slow implementation of policies and agreements. For instance, the Protocol on Free Movement of Persons, Right of Residence and Right of Establishment needs ratification.
- “This is because it is the bedrock of deepening integration as it interacts with the ability to move goods and services and help to optimise the AfCFTA.”
Constraints and improvements: They urged all African nations must contribute to the collective efforts towards boosting regional economic integrations and the AfCFTA, adding the ECA developed a prototype macroeconomic model and provided support and training in 15 countries, which shows infrastructure funding gaps and digital growth.
- “Africa remains constrained by huge infrastructure gaps, with an estimated annual financing need of between 130 to 170 billion dollars, and an annual financing gap of between 68 billion dollars to 108 billion dollars.
- “But improvements are reported in access to information and communications technology constituting an important driver of the African infrastructure development index.
- “Digitalisation in Africa was further accelerated by the pandemic, creating greater potential for trade and business growth.
- “The COVID-19 pandemic and the war in Ukraine have, however, worsened public deficits and the debt burden, which have reduced infrastructure investment in Africa,” Karingi said.
The added energy price increases exacerbated by the war in Ukraine have put a strain on African countries in particular on those that are net energy importers, adding that energy demand on the continent was mainly driven by Nigeria, South Africa and North African countries.
Acting Executive Secretary of ECA, Antonio Pedro, said collaborative efforts, from the United Nations, AU, and regional economic communities have been deployed to respond to threats to peace and security, adding to foster regional integration in Africa, ECA will continue to prioritise the support provided to Member States, regional economic communities, AU Commission and AfDB toward implementation of the free trade area.
What you should know: The African Continental Free Trade Area (AfCFTA) increased intra-African trade by 20 per cent in 2022. This was disclosed by the Acting Executive Secretary of the Economic Commission for Africa (UNECA), Antonio Pedro, at the Ninth Session of the Africa Regional Forum on Sustainable Development in Niamey, Niger.
They said the levels of intra-African trade have gone up from 13 per cent or so, before the African Continental Free Trade Area agreement was adopted, to now around 20 per cent but that is not good enough because other regions are trading amongst themselves.
