African Development Bank Commits to East Africa’s Structural Transformation and Regional Integration

The African Development Bank (AfDB) has reaffirmed its commitment to accelerating structural transformation, enhancing resilience, and fostering job creation in East Africa through its recently approved East Africa Regional Integration Strategy Paper (EA RISP) for the period 2023-2027. The strategy paper, endorsed by the Bank’s Board of Directors in May 2023, outlines two key priority areas to achieve its overarching goal. 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. Further, the AfDB will 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.

With respect to 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.

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.

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