AfDB places regional integration at the heart of its 2014 African Development Report
Regional integration is viewed as a "major pillar" for Africa's development.The African Development Bank (AfDB) released on Tuesday, December 16th its annual report on development in Africa in which it highlights regional integration as a "major pillar" for the development of Africa.
Nearly 25 per cent of African countries are landlocked and many of them have "a narrow and fragmented domestic market", the report says.
Regional integration is essential in order to achieve the economies of scale needed to access capital markets and direct foreign investment.
But its development is hindered by several obstacles according to the AfDB, citing the reluctance of some countries to transfer part of their national sovereignty to regional bodies.
The lack of sanction when decisions taken at the regional level are not passed onto national policy is also hampering the strengthening of regional integration.
However, better integration would allow countries to pool their resources to carry out major infrastructure projects in the transport, ICT and energy sector, said the institution.
In addition, it facilitates intra-regional trade, which is considered "an important driver of growth that is contributing to the development of the manufacturing sector and economic diversification."
And in the financial sector, the report notes that it would be particularly beneficial for Africa to develop cross-border banking and capital markets in order to compensate for the narrowness and shallowness of markets on the continent.