African Development Bank to Boost Electricity and Transport Infrastructure, Value Chain Development and Trade Facilitation to Spur Regional Integration in East Africa in 2023-2027
…Investment in the regional electricity trade should enable East African cross-border electricity interconnections to increase from 7 to 9
The African Development Bank (AfDB) has committed to supporting East African countries to accelerate structural transformation, reinforce resilience, and create more decent jobs. This ambition is encapsulated in the Bank’s East Africa Regional Integration Strategy Paper (EA RISP) 2023-2027.
The strategy paper, approved by the Bank’s Board of Directors on 08 May, sets out two priority areas to achieve its main objective, namely: (1) Improve regional infrastructure; and (2) Support regional value chains development and trade facilitation.
Under the first priority area, the Bank will invest in cross-border electricity interconnections to strengthen connectivity and increase cross-border trade in electricity. It will also support regional solar energy development through the Desert to Power initiative as well as hydroelectric and geothermal energy to harness the region’s endowments.
Strengthening the capacity of the East African Power Pool and regional electricity infrastructure initiatives such as the Nile Equatorial Lakes Subsidiary Action Program and Energy in the Great Lakes countries will also be areas of focus.
Investment in the regional electricity trade should enable East African cross-border electricity interconnections to increase from 7 to 9, and for the regional power pool to become operational. It will also support cross-regional power pools interconnectors such as the one between Eastern and Southern Africa Power Pools.
The African Development Bank will also commit financial resources to multimodal transport systems for roads, railways, air transport and inland waterways while continuing to strengthen transport management institutions’ capacity and regional corridors. Particular emphasis will be placed on the main corridors and feeder roads that link production centres to major markets and promote intra- and inter-regional connectivity.
These initiatives will help reduce transit times along strategic corridors and enhance trade within the region and under the African Continental Free Trade Area (AfCFTA).
Under the second priority area, the bank will support the development of regional value chains, particularly agro-industry, manufacturing (textiles and clothing) and mining.
The Regional Integration Strategy Paper aims to contribute to an increase in manufacturing value added in the region from 9% in 2020 to 11% in 2027 as a result of support to upstream interventions.
To ensure lasting development results under these two priority areas, the bank’s interventions will mainstream the following cross-cutting issues: gender equality, fragility, climate change, human and institutional capacity development, and private sector development.
Regarding capacity development, the will provide, among others, technical assistance to national, regional and continental institutions responsible for promoting regional trade, implementing the African Continental Free Trade Area and developing regional public goods.
Under the RISP, three main outcomes are expected: (i) reduced border crossing times in the Central Corridor from one hour in 2022 to half an hour in 2027; (i) an improvement in the score on the Logistics Performance Index for cross-border trade from 53.8% in 2018 to 60% in 2027; and (iii) an increase in the proportion of goods and services traded under the provisions of the African Continental Free Trade Area from 0% of the region’s total trade in 2022 to 5% in 2027.
