AFRICAN DEVELOPMENT BANK GROUP REGIONAL INTEGRATION

AFRICAN DEVELOPMENT BANK GROUP

REGIONAL INTEGRATION

POLICY AND STRATEGY (RIPoS) 2014-2023

INTEGRATING AFRICA: CREATING THE NEXT GLOBAL MARKET

AFRICAN DEVELOPMENT BANK GROUP

REGIONAL INTEGRATION

POLICY AND STRATEGY (RIPoS) 2014-2023

INTEGRATING AFRICA: CREATING THE NEXT GLOBAL MARKET

Rights and Permissions

Copyright ? African Development Bank 2015 All rights reserved. Photos: AfDB library; Jos? Carlos Alexandre; Arne Hoel

The information in this publication may be reproduced provided the source is acknowledged. Reproduction of the publication or any part thereof for commercial purposes is forbidden. The views expressed in this paper are entirely those of the author(s) and do not necessarily represent the view of the African Development Bank, its Board of Directors, or the countries they represent.

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Acknowledgements

Preparation of the Regional Integration Policy and Strategy for 2014?2023 (RIPoS) was led by ONRI with inputs from a diverse group of experts in Bank Departments and externally. The Strategy was developed under the overall guidance of Sylvain Maliko (Director OIC, ONRI). The core team was led by Moono Mupotola (Division Manager, ONRI.2) and comprised Patrick Kanyimbo (Principal Regional Integration Officer), Dovi Amouzou (Senior Operations Coordinator) and Michael Mah'moud (Consultant).

Members of the Strategy and Operational Policies Department (COSP)--Kapil Kapoor, Diene Massamba and Alex Mubiru--reviewed the document and provided substantive contributions. Richard Schiere (ORQR) provided valuable inputs and guidance on the Results Measurement Framework. Inputs were also received from Mohamed Hassan, Mamady Souare, Bamory Traore, Callixte Kambanda and Hatem Chahbani. Janvier Litse and Alex Rugamba (former ONRI Directors), Mthuli Ncube (former Chief Economist and Vice President), Steve Mugerwa, Victor Murinde, Issa Faye, Bernadette Dia Kamgina, Ralph Olaye and Bitsat Yohannes also made important contributions. Departmental Focal Points nominated by Directors across the Bank also participated in the development of the RIPoS: Cecile Ambert (OPSM), Alemayehu Wubeshet-Zegeye (ONEC), Francis Bougaire (OWAS), Ali Aymen (OITC), Patrick Agboma (OSAN), Feng Zhao (OSHD), Abdoulaye Coulibaly (OSGE), Frederik Teufel (OSFU), Wilberforce Mariki (ORWA), Adalbert Nshimyumuremyi (ORWB), Lamin Manneh (EARC), Emmanuel Santi (ORNA), Mouna Diawara (ORCE), Ernest Addison (ORSB), Medjomo Coulibaly (ORPC), Ralf Kruger (EDRE), Narina Letsara (ESTA), Floribert Ngaruko (EADI), Eneas Gakusi (IDEV) and Uzoamaka Nwamarah (CCCC/COO).

Work on the strategy included an internal brainstorming session facilitated by Stephen Karangizi Hakim Ben Hamouda and Mateus Magala. A second brainstorming session was held with think tanks on the margins of the African Economic Conference 2013 in Johannesburg. Participants from think tanks and regional bodies included Samson Mwangi Kimenyi (Brookings Institution), Lemma Senbet (African Economic Research Consortium), Olatunji Nelson Olaniyi (African Business Roundtable), Fantu Cheru (North-South Institute), Catherine Grant Makokera (South African Institute of International Affairs), Cheikh Hadjibou Soumare (West African Economic and Monetary Commission), Thaladidia Thiombiano, John Moturi and Ibrahim Diarra. Contributions were also received from the following representatives of RECs, private sector bodies and continental integration organizations during brainstorming sessions in Abidjan, C?te d'Ivoire, and Lusaka, Zambia and a Validation Workshop held in Tunisia: Fatima Haram ACYL (AUC), Imed Ben Hadj Hamouda (UMA), S?diko Douka (ECOWAS), Augustin Ndabihore (ECCAS), Joseph Amihere (AADFI), Kara Diallo (Borderless Alliance), Abu Sufian Dafalla (COMESA), Amany Omar Omar Asfour (COMESA Business Council), Philip Wambugu (EAC), Lovemore Bingandadi (SADC), Mwathi Kungu (IGAD), Treasure Maphanga (AU), Soteri Gatera (ECA), Adama Deen (NEPAD PCA), Lynette Chen-Jules (NEPAD Business Forum), Andrew Sinyangwe (Walvis Bay Corridor Group) and Christian Diguimbaye (JSSO).

Substantive comments and suggestions on the draft Strategy were received from members of the Senior Management Coordination Committee, regional directors and sector directors who reviewed the document at various stages. Valuable contributions were also received from Kennedy Mbekeani, Sunita Pitamber, Freddie Kwesiga, Shem Simuyemba, Jacque Moulot, Jean-Guy Afrika, Emely Mutambatsere, Tilahun Temesgen, Emanuele Santi, Anne ValkoCelestino, Mtchera Johannes Chirwa and from other multilateral development banks: Barbara Ramos (Inter-American Development Bank), Jay Menon (Asian Development Bank) and Andrew Roberts (World Bank).

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Contents

1 | Introduction

Acknowledgments Acronyms and abbreviations Executive summary

Background and rationale Preparation

2 | Africa's regional integration progress, challenges and opportunities

Progress Challenges Opportunities

3 | Lessons from Bank Group

Measures to Improve Bank regional operations Key success factors

support to regional integration

4 | Regional integration policy

5 | Regional Integration Strategy, 2014?2023

Vision, goal and objectives Eligibility and priority criteria Guiding principles Implementation

Strategic position Strategic pillars and operational priorities Pillar I: Supporting regional infrastructure development

Hard and soft regional infrastructure development Regional public goods Pillar II: Enhancing industrialization and trade Industrialization, export diversification and market development Trade policy and trade facilitation Trade finance capacity Cross-cutting pillar: Strengthening regional and country mechanisms and institutional capacities Support to countries Human and institutional capacity building

6 | Implementation plan

Internal and external arrangements Incentive mechanisms for developing integration programs Resource implications Bank instruments Risks and mitigation Results framework

Expected outcomes Results matrix Monitoring and evaluation

| iii | vii | ix | 1 | 1

| 3 | 3 | 4

| 5 | 6

| 7 | 8 | 8 | 10

| 11 | 11 | 11 | 11 | 13 | 13

| 14 | 16 | 16 | 17

| 17 18

| 21 | 22 | 22 | 22 | 23 | 23 | 23 | 23 | 23

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REGIONAL INTEGRATION POLICY AND STRATEGY (RIPOS) ? 2014-2023

Annexes

References Tables, figures and boxes

Annex 1 From the Ten Year Strategy to the Regional Integration Policy and Strategy

Annex 2Schematic summary of the Bank Group's Regional Integration Strategy sector strategy

Annex 3 Results measurement framework

Annex 4 Strategies of key partner institutions and international organizations

Annex 5 How the Bank will support RMCs to address some specific "soft" issues raised in the Regional Integration Policy and Strategy

Annex 5aAddressing environmental and natural resource issues in trade development

Annex 5b Free movement of people and regional integration

Annex 5c T ackling youth unemployment through infrastructure development and trade- and industrialization-related capacity building

Annex 6 Challenges along the trade and transit chain and possible trade facilitation interventions

Annex 7 Institutional arrangements

Annex 8 Implementation instruments

Annex 9 Regional financial integration: A generic roadmap

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| 33 | 34

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| 35 | 36 | 38 | 43

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Tables Table 1 Bridging hard and soft infrastructure gaps Table 2 Facilitating and supporting private sector

participation in regional integration activities Figures Figure 1 How trade facilitation can contribute to

inclusive growth Boxes Box 1 Eligibility and ineligibility for RO incentive

mechanisms Box 2 Key regional initiatives supported by the Bank

| 12 | 19

| 16 | 9 | 15

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Acronyms and abbreviations

AfDB

African Development Bank Group

ADERAnnual Development Effectiveness Review

ADF

African Development Fund

AMU

Arab Maghreb Union

ARIA

Assessing Regional Integration in Africa

AU

African Union

AUC

African Union Commission

AU MIP

African Union Minimum Integration Program

BIAT

Boosting Intra-African Trade

CAADPComprehensive African Agricultural Development Program

CEMACCentral African Economic and Monetary Community

CEN-SAD Community of Sahel-Saharan States

CERDCommunications and External Relations Department (AfDB)

CFTA

Continental Free Trade Area

COMESACommon Market for Eastern and Southern Africa

COSPStrategy and Operational Policies Department (AfDB)

CSP

Country Strategy Paper

CU

Customs Union

DAADakar Agenda for Action (on financing Africa's Infrastructure)

DFIs

Development Finance Institutions

EAC

East African Community

ECCASEconomic Community of Central African States

ECONOffice of the Chief Economist, Vice Presidency (AfDB)

ECOWASEconomic Community of West African States

EDREDevelopment Research Department (AfDB)

ESTA

Statistics Department (AfDB)

EU

European Union

FDI

Foreign Direct Investment

FRMBResource Mobilization & External Finance Department (AfDB)

GDP

Gross Domestic Product

GVC

Global Value Chain

G8

Group of 8 major economies

G20

Group of 20 major economies

HSG

Heads of State and Government

IAISInternational Association of Insurance Supervisors

ICA

Infrastructure Consortium Africa

ICTInformation and Communication Technology

IDEVIndependent Development Evaluation Department (AfDB, previously OPEV)

IFC

International Finance Corporation

IFRSInternational Financial Reporting Standards

IGADInter-Governmental Authority on Development

IGOs

Inter-Governmental Organizations

IMF

International Monetary Fund

IPPFNEPAD Infrastructure Project Preparation Facility

JSSO

Joint Secretariat Support Office

LPI

Logistics Performance Index

MDBs

Multilateral Development Banks

MIC

Middle Income Country

MRU

Mano River Union

MTR

Midterm Review

MW

Megawatt

NEPAD

New Partnership for Africa's Development

NPCANEPAD Planning and Coordination Agency

NGO

Non-Governmental Organization

NTM

Non-Tariff Measure

ODA

Official Development Assistance

OECDOrganisation for Economic Co-operation and Development

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