Highlights

The global financial crisis requires the re-examination of current approaches to international development. One area which is important for Africa is the role of regional integration in addressing the long-standing structural weaknesses which have lowered the long-term growth performance of most countries on the continent, increased their economic vulnerability and undermined efforts to reduce poverty.

The Economic Development in Africa Report 2009 focuses on ways of strengthening regional economic integration for Africa´s development. It complements existing institutional analyses of regional integration in Africa with an economic analysis of trade in goods and services, migration and investment.

The report surveys recent trends in these flows and assesses the potential for increasing them in ways that will support economic development.

The report finds that - when designed and implemented within a broader development strategy to promote economic diversification, structural changes and technological development - regional integration could help enhance productive capacities of African economies, realize economies of scale, improve competitiveness and serve as a launching pad for African economies´ effective participation in the global economy.

The Report is organized as follows:

Chapter 1 provides a brief assessment of regional integration initiatives over the past years in Africa. It describes the historical evolution in African regional integration efforts, culminating with the decision to create an African Economic Community. It also provides an assessment of regional integration initiatives in the areas of trade, investment and migration.

Chapter 2 analyses intraregional trade performance in goods, the direction and composition of Africa’s trade flows as well as their determinants. The chapter also provides an answer to the question whether trade flows among African economies are at their potential or whether there are prospects for expansion.

Chapter 3 examines the global significance and scope of foreign direct investment (FDI) flows among African countries, the determinants, and the geographical and sectoral distribution of such flows.

Chapter 4 explores intraregional performance in two emerging areas of regional integration in Africa, namely trade in services and migration. Hindrances to expand intraregional cooperation in those areas are discussed and proposals are made to improve the performance in those areas.

Chapter 5 summarizes the main findings of the report and gives some policy recommendations about whether and how to meaningfully use regional economic integration for development and as a building bloc for Africa’s participation and integration into the world economy.