The World Bank (WB) on Wednesday tasked African leaders billed to attend the regional integration summit in Ethiopia to challenge the African Union (AU) to pursue changes to escape the current straight jacket of trade fragmentation.
“Africa need to pursue changes in three critical key areas that is improving cross-border trade; removing a range of non-tariff barriers to trade and reforming regulations and immigration rules,” Marcelo Giugale, WB Africa Director for Poverty Reduction and Economic Management stated in a document made available to the Ghana News Agency in Accra.
The Bank called for simplification of border procedures, limiting the number of agencies at the border and increasing the professionalism of officials, supporting traders associations, improving the flow of information on market opportunities, and assisting in the spread of new technologies such as cross-border mobile banking that improve access to finance.
It urged African Governments to remove a range of non-tariff barriers to trade, such as restrictive rules of origin, import and export bans, and onerous and costly import and export licensing procedures.
“Reforming regulations and immigration rules that limit the substantial potential for cross-border trade and investment in services would increase Africa’s trade potential,” the Bank stated.
The WB noted that trade and regional integration were core elements of the Bank's new Africa strategy, to help countries create opportunities for their transformation and sustained growth.
The Bank has therefore doubled its investment in regional integration from $2.1 billion in 2008 to $4.2 billion in July 2011, and will rise to $5.7 billion by July 2012.
According to a WB survey, regional fragmentation could become even more costly for the continent as a result of the economic slowdown in the Eurozone could shave Africa’s growth by up to 1.3 percentage points this year.
While uncertainty surrounds the global economy and stagnation is likely to continue in traditional markets in Europe and North America, enormous opportunities for cross-border trade within Africa in food products, basic manufactures and services remain unexploited.
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