PM CONNECT provides up to date press releases on what is happening in the world of project management.
NEW YORK, NY - June 25, 2009 -- Deeper regional integration is crucial for building stronger and more resilient African economies, particularly in light of the current global financial crisis which has hit the continent hard, the United Nations says in a new report released today.
Economic Development in Africa 2009: Strengthening regional economic integration for Africa's Development, produced by the United Nations Conference on Trade and Development (UNCTAD), argues that regional integration, which would address the long-standing structural weaknesses of African economies, is essential for sustained development.
"Better links between countries, ranging from paved roads to banking cooperation, are needed to spur mutual economic growth," the agency says in a news release."Indeed, weak physical and institutional infrastructure is the key obstacle to increasing intra-African trade and investment."
The report recognizes the progress made in Africa over the last 20 years in creating subregional institutions dedicated to economic integration. They include the Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).
However, these groups have not "substantially" increased intra-African trade, investment and mobility of people as expected, says UNCTAD. In fact, the report finds that relative to other regions, Africa has by far the most fragmented market.
"The result of intra-African trade is still quite insignificant," UNCTAD Secretary-General Supachai Panitchpakdi told a news conference in New York yesterday as he launched the report. He added that the cost of transportation is a major factor hampering intra-African trade.
In addition, intra-African investment is "quite small," amounting to about 13 per cent of total foreign direct investment (FDI) into Africa.
Mr. Supachai said that Africa has been enjoying some benefits of the 5-6 per cent economic growth experienced between 2002 and 2007, and several nations have made progress in reducing poverty and achieving some of the other targets that make up the Millennium Development Goals (MDGs).
But these achievements are under threat because the drops in external demand for exports from Africa, remittances from migrant workers, FDI and official development assistance (ODA) will mean that Africa will have less resources for growth, he said.
He added that the report comes at the right time, as Member States discuss the global financial crisis and its impact on development at the three-day high-level conference that began at UN Headquarters in New York yesterday.
In a related development, Secretary-General Ban Ki-moon has informed the General Assembly of his intention to confirm Mr. Supachai as head of UNCTAD for a further four-year term beginning on 1 September 2009 and ending on 31 August 2013, according to a spokesperson for the world body.