ABSTRACT
Development of infrastructure is crucial to trade facilitation, trade development and creating an enabling environment for development in general. Transport infrastructure, in particular, is at the centre of achieving internal market integration and mainstreaming the domestic market into the global trading space. Condition of transport infrastructure and cost matter for export and determine the extent to which cost-minimizing firms are able to confront producers from other parts of the world in meaningful competition for the global market. Mainstreaming African producers and those of the Caribbean and Pacific groups into integrated internal and external markets is an important agenda for mutually beneficial trade between the African, Caribbean and Pacific (ACP) countries and the European Union (EU) member countries. Evidences have shown that a wellintegrated transport infrastructure is of tremendous importance in the EU success story on regional integration and trade performance. Regional integration is recognized as an important anchor for regional competitiveness as demonstrated by the EU experience. Studies (including Oyejide 2003; Alaba 2006) have identified various benefits derivable from regional and global integration arrangements. The benefits include intra-and extra-regional trade expansion, improvement of competitiveness and higher growth. Regional integration is growth enhancing and capable of providing mutual benefits to all participating countries. An important indicator of regional integration is physical integration, which depends on well-developed physical infrastructure, and transport infrastructure in particular. All the regional economic communities (RECs) in Africa recognize the importance of an efficient, functional and well-integrated transport system in facilitating national and international traffic to foster factor mobility, trade and regional integration. However, despite the formulation of a strategic master plan to interconnect African routes, physical links in Africa still fall short of requirement for meaningful integration, as African transport networks remain fragmented. The existing links are in dismal condition, which translates into high transport costs and, therefore, high cost of trading in and beyond Africa. Empirical evidences (Radelet and Sachs 1998; Venables 2005) suggest that countries with lower
transport costs have achieved faster growth of manufactured exports than countries with higher transport costs. Improvement in transport infrastructure and links is, therefore, capable of bringing down transport costs, foster connectivity of the internal market, integrate the regional market and efficiently mainstream them into the global trade system. Given the proven capacity of regional integration in promoting trade and growth, physical links that promote the process are fundamental for poor countries to survive growing competition in the emerging world trade order. Political leaders in Africa have over the years, with assistance from development agencies, developed encompassing frameworks to achieve economic, political and social unity in Africa. The Lagos Plan of Action of 1980 and the signing of the Abuja treaty in 1991 demonstrate the common desire to establish a continent-spanning union in Africa. Close to three decades later, the effort is yet to yield desired results due to several stumbling blocks, including technical and financial problems, plus lack of political will to reserve the necessary resources towards a more integrated Africa. The proposal by the EC strategically anchors EPAs in regional integration among the countries of sub-Saharan Africa (SSA). This implies that the Economic Partnership Agreement (EPA) process itself is – or should be – a relevant platform for promoting integration in Africa. The main focus of this chapter, therefore, is to examine what role EPAs could play in achieving this important objective in Africa by improving transport infrastructure. In doing that, the rest of the chapter is sectioned as follows. The second section presents an overview and explanation of trade cost in Africa. The third section discusses the state of transport infrastructure in Africa. The fourth section presents models of development support for infrastructure, while the role of EPAs is examined in the fifth section. The sixth section gives conclusions of the chapter.
