Unravelling African Integration Physical Infrastructure, Energy, ICT & Trade: the Greater Horn & the Great Lakes of Africa - A Comparative Case Study

     Africa faces the usual panoply of challenges endemic in developing countries with too few instruments and too few resources, while also grappling with the perennial problem of managing development. These are sequencing of policy reforms, all subject to the political constraints of containing the disruptive impacts of policy reforms to acceptable levels. This is a particularly important problem for Africa given the very narrow margins for manoeuvre imposed by fiscal and external deficits, subsistence levels of household income for much of the population and a complex political weave in the regions social fabric. Getting the priorities right and managing change are thus particularly vital issues for African integration. Hence, infrastructure development (energy, ICT, roads, railways, hydro dams, power transmission and industry – sugar factories, metallurgy, fertilizer plants…), a consumer goods revolution is just beginning in much of Africa.

      Emerging export industries—in mining, manufacturing and exportable services—are already making their mark as sources of growth in the economy and will soon overtake traditional foreign exchange earnings from minerals and agricultural goods. However, two overwhelming pressures in Africa’s current economic climate—inflation and challenging new regulations—are putting strains on private business and could potentially dent the country’s positive growth prospects. Hence, Africa should modify regulatory policies that inflate business costs and depress urban consumer incomes, go for bolder and more unconventional agricultural policies and put in place a smarter set of policies for the financial sector.

       Much of the public investment laid out in the two cases are needed, justified, and on the whole appropriate, but how such investment is to be financed remains only partially addressed and the issue of who should carry out the investments is—in at least three specific cases—quite questionable. The case for government investments in public goods such as roads and power infrastructure is undeniable, as it is laying the essential foundations—the necessary conduits and circuitry—of a modern economy.

Key words: infrastructure, transformation, entrepreneurship, capital, policy, trade, peace & security

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