Wednesday, 02 November 2016

Understanding Regional Integration in Sub-Saharan Africa

In recent times, the trade and investment potential of sub-Saharan Africa (SSA) has been well-documented with many investors from emerging markets now tapping into the opportunity. But many Western investors are still undecided about its growth and return on investment prospects. Factors that influence investor’s decision regarding market attractiveness, particularly for the manufacturing and consumer sectors, include market size and market integration network for scale economies. Investors would most likely be interested in an integrated regional market that can be leveraged to link global supply chains. They are looking at the peculiarities of SSA geography in terms of landscape and the economy—a highly fragmented continent with over 40 percent of the countries having population of less than 10 million. Fifteen out of 49 countries are landlocked and when considered individually most African countries have small economies. Adopting a regional strategy is essential and crucial to success.