- Trade Integration
Faster, most cost-effective trade benefits business and consumers alike. - Productive Integration
Producing goods and services where countries have a comparative advantage allows nations to take part in regional and global value chains. - Macroeconomic Integration
Freeing the movement and convertibility of capital spurs investment and allocates finance to where it can be most productive.
- Infrastructural Integration
Digital communications and connections by road, air, and water directly affect transaction costs, prosperity, and ultimately, stability. - Free Movement of People
Allowing people to move more freely across Africa fosters social links and makes production more efficient.
African countries are least integrated in terms of production and infrastructure. The same is true for Africa’s regional economic communities. Corrective measures are urgent, as these two dimensions of integration are the foundations upon which the other dimensions rely to function properly.
The trade dimension scores higher than the productive and infrastructure dimensions, but with an average score of only 0.383 out of 1, it, too, leaves ample room for growth. Implementation of the African Continental Free Trade Area (AfCFTA) agreement offers promise in this regard. The operational phase of the AfCFTA was launched in July 2019 and outstanding issues such as rules of origin and tariff offer exchanges are currently being negotiated. Once these issues are resolved, intra-African trade is expected to increase, fostering integration at the continental level. The increase in trade will diffuse to other dimensions, accelerating the build-up of productive capacities and infrastructure to meet growing demand.
On average, the continent performs at a moderate level on the macroeconomic dimension and the free movement of people dimension. This said, there is great disparity in countries’ performance.
Insofar as macroeconomic policy is concerned, the disparities are mainly driven by the high inflation rate of some low-performing countries. Prioritising the convergence of sound fiscal and monetary policies would bring economic stability to the continent. This would help increase cross-border investments and enhance macroeconomic integration as a result.
With regard to the free movement of people dimension, the top-performing countries offer visas on arrival to the citizens of all of the other countries in Africa. They have also signed the Free Movement of Persons Protocol (Kigali). This is not the case with the bottom performers, whose policies create difficulties for African travellers: they hinder business, discourage tourism, and prevent integration in general.