AEC 2018: Energy integration in Africa crucial for regional integration and trade

Kigali, Rwanda, December 6, 2018 (ECA) – Energy integration in Africa is crucial to catalyse regional integration while intra-African trade has been proven to reduce environmental deterioration, two new studies unveiled at the 2018 African Economic Conference in Kigali, Rwanda, revealed.

The studies were conducted separately to cover ECOWAS countries in the case of regional integration and energy; and 46 countries in the study on economic integration and the environment.

In a paper presented on Regional Integration and Energy Sustainability in Africa: Exploring the Challenges and Prospects for ECOWAS, Opeyemi Akinyemi said regional integration plays a crucial role in enhancing energy sustainability as a key infrastructure for development on the continent.

“There are efforts and initiatives put in place to enhance the integration of energy systems and resources in ECOWAS. However, barriers ranging from political to economic continue to hamper implementation,” he said.

Findings of the study reveal that there are prospects and benefits for energy integration in the region. 

Regional integration, says Mr. Akinyemi, can strengthen Africa’s energy sector through human capital development, adoption of common infrastructural network and institutions, and a harmonized policy and regulatory framework for a smooth integration across the member countries.

“It is recommended that the political economy surrounding regional energy integration should be given a priority among member States to ensure that there is positive political will for speedy achievement of set goals.  Also, investment in human capital to manage the numerous projects and resources; and maintain the facilities cannot be over-emphasised,” he said.   

“Assessing the extent of regional integration for energy sustainability is crucial for supporting firm productivity in a green or low-carbon model so as to equally increase the level of intra-regional trade flows.”

Inadequate energy supply continues to constrain manufacturing and industrial output in the region which in turn affects the volume of trade internationally. 

Mr. Akinyemi said to meet Goal 7 of United Nations Sustainable Development Goals, the region has to develop a feasible model of energy integration that can improve energy security to boost economic growth and development.

“This we believe to be a viable channel for accelerating progress in the region in particular, and the continent in general,” he added. 

Meanwhile, results of another new study reveal that trade and the environment are mutually supportive.  The results show that intra-African trade reduces environmental deterioration thus current efforts to promote and facilitate regional integration through trade should continue to offer protection for the environment on the African continent.

The study results were unveiled by Atif Awad in a presentation titled; Does Economic Integration Damage or Benefit the Environment at the 2018 African Economic Conference in Kigali, Rwanda.

“As we expected, the results of this study are substantial and provide significant policy implications for the economies examined, as well as for regional economic blocks, international trade and environmental organisations,” Ms. Awad said. 

The results are also imperative for future research as it is anticipated that this study may open further research directions.

For example, although the results show that intra-Africa trade is beneficial for Africa’s environmental quality, the important question that requires future study is to identify the exact channel through which the continent gained this optimistic impact.

Further study is also required to investigate the impact of trade on environmental quality that results from global trade with that of intra-trade. Ms. Awad says additional specific studies to examine the validity of the “Pollution Haven” hypothesis and the “Race to the bottom” hypothesis in the context of Africa are also required. 

Mr. Ojijo Odhiambo, Senior Economic Advisor with the UNDP in Nigeria said​​; “These are two very good papers with results that are backed by data showing us that intra-Africa trade reduces environmental deterioration and that the more countries integrate in the form of energy, the more they promote regional integration.”

The 2018 African Economic Conference was held under the theme; Regional and continental integration for Africa’s development.

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Tel: +251 11 551 5826