- African Development Bank to boost regional integration initiatives with $2 billion in 2022 and 2023.
Panelists at the European Union-Africa Business Forum 2022 in Brussels called for more strategic cooperation between Europe and Africa to address trade and economic imbalances between the two continents.
Several speakers at the session on integrating EU and African value chains argued that Africa must scale up value chains, especially in the wake of the devastation caused by Covid-19. Recent statistics show that Africa's participation in global value chains remains low at 3%.
Albert Muchanga, Commissioner for Trade and Industry at the African Union Commission, said Africa can improve its stake in the global value chain with the help of a strong EU partnership in a win-win formula.
"Rather than relying just on exporting raw materials, integrating EU-Africa value chains should aim to process goods within Africa. This is where jobs are created and poverty reduced," Muchanga stressed.
Thierry Breton, EU Commissioner for the Internal Market, called for a more robust economic integration between the two continents. "It is extremely important that we continue, from both sides, to break the barriers to integrating our markets as a very strong booster for our economies," he said.
Breton told the participants that Africa and Europe should follow their harmonized rules and economic partnership agreements to enable value addition for processing in Africa before exporting to European markets. He also highlighted several strategic sectors in which African countries can position themselves, including renewable energy, digitalization, human capital investment, and skills development.
"We are trying to put the tools together from our side with our new global strategy. We will dedicate €150 billion to Africa. We will, of course, support massive infrastructure in Africa, which we know is extremely important and we will help improve the investment climate and support sustainable development," he said.
Breton stated that the European Union will continue to help African countries in the fight against the Covid-19 pandemic, saying the region was pushing hard to support the continent's capacity to produce vaccines locally in South Africa, Rwanda, Ghana and Senegal.
The African Development Bank has a statutory responsibility to support regional integration as a crucial economic development factor for Africa. In remarks during the discussions, Yacine Fal, the Bank's Acting Vice President for Regional Development, Integration and Business Delivery, said: "But we also need to support a more dynamic push to pull African countries and their enterprises into the European value chain," she said, adding that the African Development Bank plans to make available roughly $2 billion for regional integration initiatives between 2022 and 2023.
Fal said the Bank is supporting the establishment of the African Continental Free Trade Area's institutional framework and its secretariat, and funding projects under the African Free Trade Program. "Boosting regional integration in Africa must involve lower-income countries and not only champions," she said.
To integrate EU value chains, African countries need to increase their involvement in global trade and production patterns, Fal said.
Private sector representatives on the panel highlighted the importance of a fair and equal relationship. This should be built on common goals and aspirations that will lead to a win-win relationship for both regions, according to Mansur Ahmed, President of the Pan African Manufacturers Association.
"Today, the wealth of nations is built on the addition of value to basic endowments. This needs to be transformed and refined to create a more equitable relationship," said Ahmed, who is also the Executive Director of the Dangote Group.