Logistics holds key to African growth – report

Regional integration is essential for sustained development on the continent, especially within the context of the current world economic crisis, according to the Unctad report Economic Development in Africa 2009. Better links between countries, ranging from paved roads to banking cooperation, are needed to spur mutual economic growth, says the report. Weak physical and institutional infrastructure is the key obstacle to increasing intra-African trade and investment. This is why Africa has the world's lowest shares of regional trade and investment, according to the report. Official statistics put Africa’s share of external trade at 9% of the global total, and inward foreign direct investment (FDI) at 13%, it adds. Subtitled “Strengthening Regional Economic Integration for Africa’s Development”, the 2009 edition of the Unctad annual report on Africa says the establishment of subregional economic communities has not substantially increased intra-African trade, investment and mobility of people as expected. To boost regional integration, countries need to strengthen their regional physical infrastructure such as roads, railways, telecommunications and regional airlines. Given the limited resources of individual African countries, there would have to be joint funding by neighbouring countries. Physical infrastructure will need to be complemented by improvements in soft infrastructure, including policy harmonisation at the regional level, trade facilitation, efficiency in border procedures and the adoption of national policies that help rather than hamper the process of integration, the report says.