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REGIONAL INTEGRATION: RURAL POVERTY


MORETRADEJUST THAN


IT'S ABOUT


Sara Mbago-Bhunu is Regional Director, East and Southern Africa, at the International Fund for Agricultural Development (IFAD). The following is an edited version of an interview conducted over email. Mbago-Bhunu details the challenges and opportunities associated with regional integration, and the long-standing relationship between IFAD and the OPEC Fund. PHOTO: Andrey_Kuzmin/Shutterstock.com


“R


egional integration has a much broader aim than simply efforts


to liberalize trade. Regional integration helps countries facilitate the flow of goods, services, capital, energy, people, customs and ideas. It includes investments in regional


infrastructure, harmonization of regulations and standards, common approaches to macroeconomic policy, management of shared natural resources and greater labor mobility. Human development is about creating the conditions that allow the population to live lives that they value by expanding their freedoms and building their capabilities. Therefore, the nexus between regional integration and development brings into play communities’ ability to lead their own development and ensure their sustainability. Though there are clear benefits like


trade and jobs, there are also trade- offs that sovereign nation states have to consider when looking at regional integration, like the relocation of some jobs to other countries.”


Africa: Work still to be done “Although Africa has made efforts toward regional integration like the recently adopted African Continental Free Trade Agreement (AfCFTA), there is still a lot that needs to be done. When looking across Africa, we can identify four regional blocks that have varying levels of integration: the East African Community (EAC), the Economic Community of West Africa States (ECOWAS), the Southern African Development Community (SADC) and the Common Market of Eastern and Southern Africa (COMESA). Though the benefits of regional integration are clear, the push toward integration is still facing obstacles and challenges such as limited policy harmonization, and poor transport and communication infrastructure. The prevalence of malnutrition, hidden hunger and ongoing conflict hamper human capital accumulation and human development. There is need for technological upgrading and deployment of digital transformation that is hampered by limited access to energy, particularly in forgotten borderlands, especially for landlocked countries. Finally, unskilled workers, complex currency markets, poor trade logistics and increased transaction costs also slow regional integration.”


8


Some sectors are natural integrators “Some sectors by their very nature are predisposed to trade and trading activities that promote and thrive on regional integration. The largest sector is the extractives industry, which has driven the development of infrastructure like railroads to facilitate exploitation and transportation. What we see, however, is that economic models that depend on extractives do not create jobs for the rural poor and young people. The next largest sector is agriculture and food trade, which forms a significant portion of all economies in Africa and is projected to be a US$1 trillion market by 2030 that will be facilitated by AfCFTA. Learning from IFAD investments on the ground, we note that when countries build on their comparative advantages in agriculture and invest in agricultural processes, there is a natural flow of agricultural goods between countries. Other sectors that rely on regional integration to some degree include tourism and the digital economy, such as fintech, telecommunications and the financial sector.”


PHOTO: arrowsmith2/ stock.adobe.com


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