The global economic crisis requires the examination of existing approaches to international development, the United Nations Conference on Trade and Development (Unctad) said on Thursday, when it released the ‘Economic Development in Africa 2009 Report',

Unctad economic affairs officer Dr Janvier Nkurunziza stated that Africa has historically been reliant on specific economic flows, mostly consisting of economic aid and foreign direct investment. However, he noted that with the economic climate in its current disarray, these sources of economic support were drying up.

The report also stated that the African continent was too fragmented to achieve its needed transformation and to compete in the global economy.

"So the message here is that we need to find solution to the fragmented nature of African economies," Nkurunziza said at a briefing in Johannesburg .

Deeper regional integration would enable Africa to build more resilient economies, he said, adding that a focus on more physical and non-physical infrastructure would allow the continent to reap the benefits of integration.

Better links between countries, ranging from paved roads to banking cooperation, were needed to spur mutual economic growth. The report further stated that weak physical and institutional infrastructure was the key obstacle to increasing intra-African trade and investment.

Currently, only 9% of Africa's exports were done with other African countries, while only 10% of the continent's imports were supplied by other African nations, said Nkurunziza. The continent currently had the world's lowest shares of regional trade and investment.

However, the report recognised that over the last two decades, Africa has made progress in creating subregional institutions dedicated to economic integration. But, the establishment of these communities has not increased intra-African trade, investment, and mobility of people, as expected.

Nkurunziza stated that as part of a broader, more well-designed development strategy, regional integration could enhance productive capacity, intensify economic diversification, and improve competitiveness. The pooled resources and economies of scale would allow African countries to participate more effectively in the global economy.

To boost regional integration, countries need to strengthen their regional physical infrastructure, such as roads, railways, telecommunications and regional airlines. Considering the high cost of infrastructure projects, and in view of the limited financial capacities of individual African countries, planning at the supranational level and pooling resources to fund priority regional projects was the most realistic strategy for advancing regional integration, the report stated.

Physical infrastructure would need to be complemented by improvements in soft infrastructure, including policy harmonization at the regional level, trade facilitation, efficiency in border procedures, and the adoption of national policies that help, rather than hamper the process of integration, Nkurunziza said.

Developing services trade was also a key component of successful regional integration in Africa.

Services represented, or had the potential to become significant sources of export earnings for a large number of African economies. Tourism, construction, ports, and logistic services relating to road and rail transport, offered important export potential for several countries. Also, considering that professional and transport services, telecommunications, banking and insurance were inputs into other economic activities, they either facilitated or hindered trade and production in other economic sectors, depending on the efficiency with which they were made available to users.

The report also noted that a more positive approach to intra-African migration was needed..

Most regional integration agreements in Africa included provisions on the free movement of persons, and the right of residence. Although these were among the most poorly implemented provisions, they have led to the easing or abolition of visa requirements for travellers within the integration group concerned.

The report stated that there was a need for stronger political will to overcome national lobbies opposed to this form of integration, and forging ahead with this agenda could also imply amending and harmonising national laws and investment codes, particularly their provisions barring foreigners from participating in certain categories of economic activity.