Catalysing regional integration in Africa: The role of infrastructure

Abstract

AbstractNow, more than ever, infrastructure integration in Africa has become critical to recalibrating Africa's growth strategy toward increased intraregional trade, especially in an era of global isolationism, protectionism and supply chain disruptions from COVID and the war in Ukraine. This paper investigates the extent to which infrastructure development and integration can act as a catalyst for trade, innovation and income improvements in Africa. Using panel data analysis, we show that the infrastructure sector with the strongest multiplier effect on economic activity is the information and communication technology (ICT) sector, followed by the transport sector, the electricity sector and, last, the water sector. This ranking of the catalytic role of infrastructure sectors should guide policy prioritisation on infrastructure investments to accelerate growth and unlock the potential of the AfCFTA. Benchmarking exercises on infrastructures' catalytic role in the regional economic communities (RECs) show that infrastructure has had the strongest impact on economic outcomes in the East African Community bloc, making the EAC a type of flying‐geese RECs for other regions to emulate.