Cross-Continental Joint Investment
Shared Goals for Comparative Advantages
The approach for the continent in promoting coordinated joint investment is to be based largely on the comparative advantages of the participating African nation states. This has to take into account their capacity for innovative joint investment for trans-boundary initiatives. A critical aspect is to grow African mind-set of setting up continental and regional shared development goals that have long term perspectives. This calls for coordination of ventures at regional level through the operationalization of the development priorities within the framework of the regional entities such as Regional Economic Communities (RECs). Generating comprehensive and inclusive shared goal for the continent is fundamental for a sustained development.
It is imperative from the outset of planning for joint investments that the continent envisions shared goals and makes commitments to embrace the joint social and economic ventures through sector prioritization for joint initiatives. In most cases, the development priorities have been expressed by the nation states or regional development visions. The shared goals are used as reference points to trigger current and future large scale investment as well as identifying joint opportunities.
The commitment for the shared goals by the African nation states to joint investment is a critical starting point for joint undertaking for medium and long term transformation. For development transformation to take place, the Africa nation states need to act as change agents. There must be a need to be willing to champion the course of working together on joint undertakings and to inspire the citizenry and the population as stakeholders to become involved.
Effective approach for joint investment requires that such commitments transcend the level of few individual nation state commitments to become a continental commitment shared by the designated African Union (AU) regions as a whole. At the same time the commitment at regional levels has to become national commitment for those working on the identified joint initiatives with the responsibility to execute joint missions and mandates.
The continental development shared goals for the long-term transformation have to be designed to reflect the regional joint investment priorities in response to the development challenges in the continent. They should thus guide the definition of the specific continental and regional joint undertakings.
Commitment to Shared Goals
The process for creating a shared goal and commitment involves key participating nation states and the regional entities. This is to be done within the regional framework to reach common understanding and commitment of the overall challenges of joint investment. It also requires regional cooperation within the different development clusters. The major objective is to identify a set of common goals that reflect the continental core mandates and responsibilities.
At times the lead role of particular regional entities will be critical in achieving the set of shared goals. The continental and regional entities, working in tandem, will aim to identify concrete shared goals and objectives for the future joint ventures for joint funding and implementation.
Shared goals for joint investments must respond to the needs to address development challenges for the continent. This can be expressed in terms of medium and long-term development aspirations as espoused within the framework of Agenda 2063. The following aspects provide key consideration as a framework for establishing a shared goal:
- Determination of how the joint investments can be included as a design variable for both the continental and regional on going and planned initiatives.
- Determination of a framework to formulate joint ventures that respond to the continental and regional development challenges.
- Establishing the current and future impact of effective joint investment as a way to justify the emphasis on joint ventures under the Agenda 2063.
- Determination of mechanisms for joint funding and implementation of cross-border joint investment.
- Reviewing on regular basis, the continental and regional development challenges that need to be addressed as joint ventures, within the framework of Agenda 2063.
- Establishing what policies and strategies would help to promote shared goals to ensure enhanced synergy in the use of development resources.
Synergy Relating to Joint Investment
The lessons from the different regions in the continent show that joint ventures can be promoted and implemented to enhance the synergy and impact from the expected transformational outcomes. The tripartite mechanisms such as COMESA-EAC-SADC encourage addressing issues common to all the respective RECs. It is to be noted that there are different challenges and processes in the continental and regional entities. These include different stages of development of different initiatives.
It has been observed that a flexible arrangement enhances internal coherence, i.e. the vertical coherence between continental development initiatives. This take into account the nation state specific undertakings, as well as the horizontal coherence between continental development priorities and other development priorities of the regional cooperation, which the specific regional entities may bringing forward.
While keeping a common thrust and shared goals for the continental transformation, this approach translates into using flexible approaches within the framework of Agenda 2063. Blocs of nation states have to enter different programmatic partnerships on specific joint ventures, gradually and on voluntary basis, depending on existing progress of various parts of regional cooperation.
The specific objectives of joint investment for the continental and regional development effectiveness are to: strengthen the joint approach to the exploitation of resource endowment in the continent and at the regional levels. This is to spearhead articulation of a comprehensive long-term continental and regional investment strategy to ensure sustainable exploitation of available resources and to promote systematic beneficiation of the natural resources. This will enhance expanded industrialization with strong linkages within the regional value chain.
Through key priorities espoused in Agenda 2063, efforts have to be made to provide support to the participating African nation states and regional entities on issues related to natural resource management and macroeconomic dimensions. For effective joint investment, the shared goals have to aim at providing the nation states and regional entities with technical assistance to enable them to build their capacity for policy design and implementation. As a part of longer-term regional integration, efforts have to be made to deepen economic reforms, strengthening the regulation of financial institutions, harmonizing fiscal and monetary policies, improving governance and accountability.
Framework for Flexibility and Coherence
The development priorities espoused under Agenda 2063 aim to promote joint ventures and implementation to enhance the synergy and impact from the expected outcomes. The priority areas have to encourage initiatives that bring together several African nation states and regional entities to address a particular development challenges. For instance, the tripartite arrangements such as COMESA-EAC-SADC provide a good case to build on.
Given the different challenges and processes in the different regions, including different stages of development of different initiatives, the joint approach by the regional institutions to development priorities of common concern, have to be flexibly cast around binding shared goals and agreements. This is to be cast within the same policies, programs, rules and implementation time frame for the regions and the participating nation states. A flexible arrangement has to be a framework allowing each regional institution to:
- Achieve its internal coherence, i.e. the vertical coherence between the continental development initiatives and the specific regional undertakings. This has also to consider the horizontal coherence between the participating nation states development priorities and other development priorities of the regional cooperation, which the specific regional institutions are bringing forward.
- Implement the required regional transformation articulated in the different planning instruments of the participating nation states and regional entities according to agreed time frame. This may be different for different regional entities and nation states, depending on different starting points and actual implementation drive.
- While keeping a common goal and objectives of the shared goals and planning instruments, this approach will translate into using flexible approaches within the regional coordination mechanisms with regional institutions or blocs of nation states entering different programmatic partnerships on specific joint initiatives, gradually, depending on existing progress of various parts of regional cooperation and on voluntary basis.
Flexible, internally coherent and harmonized joint ventures can be built around existing shared goals and planning instruments of regional institutions and groups of nation states, which already cooperate well in specific areas. The added value of this approach would be to look at existing multi-sector progress in each regional entities and nation states. This will help to find a niche for joint investment either as synergy-creation across sectors and countries or as expansion of existing ventures. In some cases it can be approached as multi-purpose programs related to specific sector such as agriculture or value chain development plans which identify and address in parallel bottlenecks on natural resources, infrastructure corridors and trade.
A flexible approach to setting shared goals for transformation could also mean that specific groups of nation states will be design and implement joint programs only among those with concrete interest in that particular area, and regardless of membership to one or more of the regional institutions. An example could be a regional irrigation programs only among those who share water resources (building on existing structures and processes led by lake and river basin commissions), e.g. Zambia, Angola, Zimbabwe, Mozambique for the Zambezi; Uganda, Kenya and Tanzania for lake Victoria; Indian Ocean countries given the peculiar challenges they share; and Mano River basin initiative.
Flagship Investment
The concept of flagship investments has been applied successfully in different regions. A number of such flagship investments have been identified under Agenda 2063 for joint implementation during the ten-year periodic implementation cycles. The overall responsibility for the implementation of the priority investment initiatives rests with the commitments of the African nation states working with their respective regional entities. The implementation process is to be informed by inclusivity and to be iteratively evaluated on continuous basis. All the regions can gear up to benefit from the interactive engagement built on comparative advantages of the regions.
Partnering for Joint Investment
Effective joint investment requires strong cooperation to nurture partnership among the African nation states and between the contiguous regional entities. Many of the nation states in the continent have well-developed dialogue mechanisms especially for joint ventures and mechanisms for cross-border cooperation. The mechanisms have worked ell for the multi-national corporations, but not fully exploited by locally based ventures.
Furthermore, a number of African nation states have both institutionalized and informal mechanisms for engagement with regional entities in setting priority for joint development agenda. The continental level joint investment strategy will build on this strength to trigger joint ventures and resource mobilization for strategic and priority initiatives.
It can be demonstrated that African nation states have a fairly well developed dialogue mechanism for building agenda for development (ACBF, ACI Survey Data, 2011). This provides an opportunity for the continent to develop a strong partnering mechanism among them to tackle regional development challenges. A well-developed partnering mechanism in the continent will facilitate effective resource mobilization for joint investments.
Continental Value Chain
There is a need to promote productive linkages both within the manufacturing sectors and other productive sectors such as agriculture, mining, information technology and services among others. These are essential to create business and employment opportunities for the population in the continent, building on the comparative advantages in different regions.
Special linkages have also to be established in relation to inclusive infrastructure corridors that serve and stimulate clusters and integrated local economic activities. It is important to generate and promote knowledge linkages to foster innovation, creativity, skills and capacity to maximize the economic and social potentials and benefits associated with joint investments in the continent.
Continental value chains offer new opportunities for structural transformation in the regions. Nation states and regional entities can integrate into regional value chains at specific stages, usually assembly in manufacturing and commodity production in natural resources. This would lead to opportunities for production upgrade and learning through knowledge transfers, product differentiation and the addition of adjacent stages of the value chain.
The nation states in the different regions so far capture only a small share of trade in value added terms. A good part of the regions’ forward integration in natural resource commodity exports is traded as inputs in foreign manufacturing, which creates relatively little additional value added in the continent. In the long term this need to be reversed in order to achieve employment-sustained growth and development.
