If it’s good for the region it’s good for the nation. What can regional public goods do for Africa?

If it’s good for the region it’s good for the nation. What can regional public goods do for Africa?

If it’s good for the region it’s good for the nation. What can regional public goods do for Africa?

Africa, it is noted, puts in a 'disappointing' economic performance as a continent, and yet aid is provided on an individual country by country basis. Regional partnership within Africa is thus discouraged. Should aid be a one-way gift to individual countries? The marginalisation of Africa could be reversed, argues a Harvard Institute for International Development paper, if aid were geared towards producing the regional public goods necessary to stimulate private foreign investment. Neither influxes of aid nor domestic savings will provide the level of resources necessary to sustain recent moderate improvements in Africa's growth prospects.

To date, recriminations abound concerning Africa's poor development performance. Despite moderate growth in the second half of the 1990s, poverty remains endemic, and the apparent recovery is fragile: savings and investment rates remain low and dependence on Official Development Assistance (ODA) is high. Debates on how to improve aid effectiveness focus on individual countries, alleging that sound domestic policies, ownership of reform, and the strategic interests of bilateral donors improve outcomes. Such analyses, although valuable at the national-level, contribute little to understanding regionally-based challenges and problems.

Introducing the concept of public goods will help dispel the notion of aid as being a one-way benefit and focus attention on the mutual benefits of cooperation. The debate needs to shift away from improving development cooperation through national ownership, selectivity and improved aid effectiveness, to one that supports policies enabling the region as a whole to become competitive. Such improvements in Africa's growth prospects cannot be sustained without stronger private foreign direct investment, given declining ODA and low domestic incomes. Stimulating this investment requires regional- rather than national-level action.

Five key initiatives that could help regional public goods in stimulating investment are:

  • encouraging regional planning to improve transport links given that many African states are landlocked
  • managing cross-border environmental and health hazards to minimise spread of disease, or fire, for example
  • strengthening security and defence initiatives to support peace and stability
  • harmonising business regulations to help reduce transaction costs and create region-wide spaces for business
  • encouraging macroeconomic stability for investors - a regional and a national responsibility

Regional public goods provision, it is now recognised, will reinforce national policy reform. The Lagos Plan of Action, with other regional associations, aims to harmonise policies and develop regionalism. Yet, for such institutions to have a positive impact on regional development, certain pre-requisites are essential, such as

  • political commitment at the national level
  • adequate funding
  • strong managerial capacity
  • coherent institutional framework
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