There are many players who have been supporting various endeavors which are aimed at ensuring on a more integrated continent African Development Bank is one of the players that is working hard to ensure that African regional trade is enabled.
In an interview with the Guardian Simon Mizrahi, AfDB Director of Operations Committee and Quality Assurance Department, highlights the most promising examples that illustrate the Banks High 5 commitment “to integrate Africa” on the ground.
How can the Bank increase its efforts to assist in the achievement of a genuine and “seamless” free trade area on the African continent, especially after the ratification of the AfCFTA?
From the point of view of operations, industrlization and infrastructure in Africa depend, as do many other challenges, on a more integrated continent, and a genuine and seamless free trade would be the best outcome of all.
African economic integration will provide manufactures the access to the markets they need, and this will encourage more trade and more investment therefore more employment for Africans long suffering youth. This is because the growth of integrated supply chains across borders will add value to primary commodities, creating more jobs and increasing economic activity.
But intra-African trade is still just 14.2 % of total trade in goods, because of high costs and complexities in cross-border trading among other less easily defined factors. Other continental blocs manage at least four times this percentage.
Of course, Africa’s regional economic communities continue to promote integration, but much more progress is needed in comparatively straight areas such as visa liberalization. This is why the Bank is a major investor in cross border infrastructure. in 2017 for example. We build hundreds of one-stop border crossing to facilitate trade across borders.
What gives the Bank a comparative advantage over other development finance institutions in the area of African Integration?
The Bank Groups convening power gives it a clear comparative advantage in regional infrastructure development and other regional development initiatives. It has a big portfolio of multinational projects in the road sector which support the African Unions integration agenda. And in regional power initiatives, where we are helping to address power generation capacity gaps.
The Bank can unlock investments in regional projects by helping to meet the high project preparation costs and to make collaboration easier between states and regional economic communities. The NEPAD –infrastructure project preparation (IPPF) managed by the bank has been at the forefront of preparing large regional infrastructure projects.
The Bank has also developed a valuable niche in the development of cross-border infrastructure and soft or institutional infrastructure to make intra-African trade easier. Drawing on its unique mandate and close relations with African governments, it can also help to encourage the pursuit of regional public goods, such as improved management of cross border natural resources and the promotion of integrated regional labour and financial markets.
What are the most promising examples you have seen or experienced to illustrate the Banks High 5 commitment “to integrate Africa” on the ground?
I’ll use three recent examples. The first is the Trans-Gambia Bridge. This creates once an efficient and productive transport link between the north and south of the Gambia. It’s the first phase in the development of a transport corridor that will cut the long delays caused by ferry crossings, poor roads and inefficiencies at the boarder.
it will have freight costs, and provide over 900,000 people in local communities with better access to transport, health and education services. The first phase of the project was supported by $93.8 million in Bank lending.
The Second is the Addis- Mombasa highway. It links Kenya and Ethiopia and has made cross –border traffic between the two countries a lot easier. The Kenyan section of the corridor was completed in 2016, and the last part of the road in Ethiopia will only be finished later this year.
Yet trade and employment opportunities between both have already increased and will grow further, with additional foreign investments in the region as transport and shaping costs of goods start to plummet.
The third is the Walvis Bay port expansion, which will make Namibia a regional logistic hub for international markets. The project include a new container terminal on 40 hectares of land reclaimed from the sea, which will create more trade between SADC and the rest of the world.
The Bank contributed about 90 % of the project cost with $300 million loan, which helped muitiply the ports container capacity from the current 355,000 twenty –foot equivalent units (TEUs) to just over 1,000,000 TEUs at its completion later this year.