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International community should back efforts in East Africa to bring together the economies of 5 states.
In fact, regional integration has long been touted as necessary for economic development in sub-Saharan Africa. Trade experts have pointed out that Africa is one of the most protectionist areas in the world; simply reducing tariffs between countries has the potential to increase trade significantly. Though the region has 14 landlocked countries, only 10 percent of African exports are intraregional, according to the World Trade Organization. In contrast, intraregional trade in Western Europe, is 68 percent.
Beyond tariffs, infrastructure is a major barrier to increased regional economic activity. According to a 2009 World Bank study of Africa’s infrastructure, the continent needs a shocking $93 billion annually for the next 10 years to finance its infrastructure. Most individual countries are too small to develop infrastructure on their own in a cost-effective manner.
Despite the research and speeches — U.S. Secretary of State Hillary Clinton touted regional integration during her August trip to Africa — most U.S. aid to Africa remains bilateral. The Millennium Challenge Compact, one of the cornerstones of U.S. foreign aid to Africa, only makes country-specific grant agreements. Similarly, the bulk of funds disbursed through USAID are bilateral.
This strategy is out of sync with Africa’s needs. International donors need to reprioritize aid to focus on regional projects.
The World Bank has made some efforts toward regional aid projects. It launched a regional integration strategy for Africa in June 2008, and it has a regional integration department. Funding does not reflect integration as a priority, however. Only 10 percent of the bank’s money allocated to Africa was for regional projects.
Analysts say that the African Development Bank is focused on regional infrastructure projects, but its resources are limited in comparison to European and U.S. donors and the World Bank. International donors should partner with the African Development Bank to implement aggressive regional infrastructure projects across the continent.
The changes happening across East Africa show that businesspeople and politicians in the region are serious about integration. They deserve greater financial and technical support from international donors.