2014-african-transformation-report

19import most of their fabric. But theregion has the potential, with additionalprogress on regional integration,to develop a more integratedtextiles and clothing industry. WestAfrican countries like Burkina Fasoand Mali are significant producersand exporters of raw cotton, butthey lack the logistics, large middleclass, and industrial infrastructureof some of their coastal neighborssuch as Côte d’Ivoire, Ghana,Nigeria, and Senegal. A regionalcotton textile and garment industry,which would be more competitivethan the current national industries,could be facilitated by an EconomicCommunity of West African Statescustoms union and better intercountrytransport infrastructure.With several countries across Africanow producing oil and gas, thecrude ingredients for a synthetictextile industry are more available.Regional integration could helpturn this potential into a viableindustry. In addition, Sub- Saharancountries should get the EuropeanUnion and the United Statesto allow garments incorporatinginputs sourced from any countryin the region to qualify for full dutypreferences under Everything ButArms and the African Growth andOpportunity Act, regardless ofwhether the supplying country isdeveloping or least developed andwhether it also is eligible.In agroprocessing, easier marketaccess among countries would boostthe fruit and juice industry in Eastand West Africa. It would also acceleratesoybean growing, processing,and trade in the region. For example,Nigerian soy products could beexported more easily to Angola andSenegal to support modern poultryindustries and improve diets, particularlyin the fast- growing urbanareas. Even in traditional agriculturalexports, improved regionalintegration would enable Africancountries to realize more value—forcoffee it would make feasible theestablishment of a coffee tradinghub in say Nairobi, which would helpcoffee exporters from Ethiopia, Tanzania,and Uganda as well.More integrated regional marketswould also greatly improve thechances of attracting FDI in garments,textiles, agroprocessing,and other forms of manufacturing,particularly for smaller countries.Today, only Nigeria and SouthAfrica have domestic markets largeenough to attract market-seekingFDI. But regional economic blocscould enable many more countriesto have access to the benefits of awider domestic market. The SouthernAfrican Development Communitycomprises 15 member stateswith a market of almost 250 millionconsumers, and a combined GDPof $649 billion. Similarly, the EconomicCommunity of West AfricanStates comprises 15 member states,with a market of about 320 millionpeople and a combined GDP of$396 billion. With an open marketin each bloc, FDI manufacturerswould become more interested inthe blocs as possible sites for manufacturingplants. And membercountries—even the small ones—would with good policies, adequateinfrastructure, and logistics standa better chance of becoming locationsfor FDI manufacturing.There are also opportunities in services.Tourism could get a boost ifit were possible for tourists obtaininga visa for a country in East,West, or Southern Africa that couldbe used to travel to other neighboringcountries, along the linesof the Schengen model. Togetherwith other forms of regional cooperation,such developing regionalgame circuits in East and SouthernAfrica, this could attract more touristsand encourage Africans to traveland pursue business opportunitieswithin the region. Nationals ofsome Economic Community of WestAfrican States, Southern AfricanDevelopment Community, and theEast African Community membercountries can now travel withintheir blocs without visas, and thereare attempts to pilot the Schengenmodel for tourists from the outside.In skills development African countriescould pull together in waysthat make the whole better than thesum of the parts. Examples includeregional centers of excellence inscience and technology, as pioneeredby the African University ofScience and Technology in Abuja,the African Institute of Science andTechnology in Arusha, Tanzania, andthe International Institute for Waterand Environmental Engineering inOuagadougou. Countries could gofurther and develop common curricula,textbooks, and accreditationsystems in science and technology.This would not only reduce theunit costs of textbooks. It wouldalso integrate skills markets andpromote cooperation in developingand exchanging scientific and technicalknowledge.What would it take for Africa to seizethe opportunities that regional integrationoffers for economic transformation?Three key elements:• Financing and building regionalinfrastructure, including roads,rail, ports, air connections, andinformation and communicationtechnologies, notably underthe Program for InfrastructureDevelopment in Africa.• Trade facilitation, includingcustoms and other cross- borderregulations (with one-stopborder posts as a key element),as well as logistics, shipping, forwarding,finance, and insurancedriven by the private sector.• Political leadership and commitmentto the regional project.Regional infrastructure—linkingcountries and providing cheaperservicesInfrastructure is critical for eachcountry’s economic transformation.More integratedregional marketswould greatlyimprove thechances ofattracting FDI ingarments, textiles,agroprocessing,and other formsof manufacturing,particularly forsmaller countriesAfrican Transformation Report 2014 | Overview