November 7th, 2013 A Business Plan for Africa Breakaway Sessions 2: Market Enhancement & Segmentation Session 1: Rationalizing the market through Regional Integration : One Africa, One People, One Future.

2 P OLICY R ECOMMENDATIONS WITHIN THE A FRICA 2.0 M ANIFESTO A Regional Champions Development Initiative (RCDI) will serve as the focal point for galvanizing resources and strengthening collaboration between relevant Regional Champions and country-specific institutions to directly address constraints of regional and continental expansion for African companies. A Regional Champions Index will form the comparable basis for measuring progress and performance of African businesses on their journey towards Regional Championship. A Diaspora Bond will financially support regional and international expansion of Regional Champions. As it currently stands, these Champions do not benefit from national export credit agencies or powerful stock markets to support their international growth.

3 K EY F ACTS AND F IGURES Fact 1: Africa is the most dynamic place on earth. Africa’s annual GDP growth rate over the period has averaged at 5.4%. This amounts to almost 4 times the European Union (EU) average estimated at 1.4% for the same period.

4 Fact 2: Africa is an attractive place. In 2012, Africa experienced a 5% increase in FDI inflows ($50 billion) while other Regions experienced a decline. BRICS countries are amongst the top investing countries in Africa. In 2010, the share of BRICS in FDI inward stock to Africa reached 14% and their share of inflows reached 25%. K EY F ACTS AND F IGURES

5 H OW DOES A FRICA COMPARE ? Source: Mo Ibrahim Foundation, 2013

6 A FRICA IS DIVIDED IN REGIONAL ECONOMIC COMMUNITIES (REC) Source: Mo Ibrahim Foundation, 2013

7 A FRICA IS DIVIDED IN REGIONAL ECONOMIC COMMUNITIES (REC) Source: Mo Ibrahim Foundation, 2013

8 How do the RECs compare? A FRICA IS DIVIDED IN REGIONAL ECONOMIC COMMUNITIES (REC)

9 L EVERAGING S TRENGTHS AND O PPORTUNITIES, A DDRESSING W EAKNESSES AND T HREATS ISSUES HAMPERING REGIONAL INTEGRATION IMPLICATION Too much overlap in regional economic community memberships; Lack of capacity within regional institutions; Poor implementation of agreed programs at national level; Unclear view of the costs and benefits of integration; Growing but insufficient private sector participation; Almost no popular participation; Inappropriate Integration Template (based on European Integration model). Intra-African trade is very weak : 13.1% compared to 70% in the European Union. Africa is still fragmented into small uncompetitive markets.

10 OPPORTUNITIES: Promote Regional Champions Building one big market for the emergence of African regional champions. The African Regional Champions are corporations whose turnover can reach US$80 billion. Below are the current 40 African regional champions: L EVERAGING S TRENGTHS AND O PPORTUNITIES, A DDRESSING W EAKNESSES AND T HREATS

11 The African Regional Champions have an average growth ranging between 13-25% annually and have solid international ambitions. They have outperformed both developed and Emerging markets capital. OPPORTUNITIES: Promote Regional Champions L EVERAGING S TRENGTHS AND O PPORTUNITIES, A DDRESSING W EAKNESSES AND T HREATS

12 B EST P RACTICES  OHADA has succeeded in setting a common/harmonized investment code for all 17 member countries thus facilitating the mobility of investments in the zone and easing business practices through smoother expansion of economic agents in the area.  The East African Community prepared an Action Plan to address the issue of Transport Corridors in East Africa. On the Northern Corridor, fully implementing the Action Plan would: Decrease the price of road transport by 25%; Decrease the price of rail transport by 11-14%; Reduce the time of shipping by road by 21-33%; Reduce the time of shipping by rail by an average reduction of 53%. On the Central Corridor, fully implementing the Action Plan would: Decrease the price of road transport by 9-11%; Decrease the price of rail or rail/lake transport by 30-36%; Reduce the time of shipping overall by 40-50%. There is a need for a pragmatic approach focused on immediate key deliverables with tangible results to reinforce credibility and generate momentum.

13 K EY Q UESTIONS TO A DDRESS IN T ODAY ’ S S ESSION What are the main bottlenecks of African integration? How can those challenges be addressed? What could Africa’s future be if it becomes one unified continent ? How to facilitate the rise of African regional champions? What role can the champions play in helping the continent to leapfrog? On which priority fields should Africa build its integration?

14 A CTION PRIORITIZATION M ATRIX AND S TAKEHOLDER E NGAGEMENT M ATRIX For each identified leapfrogging action, complete the Stakeholder Engagement Matrix below: Complete the Action Prioritization Matrix below with the key short, medium and long-term leapfrogging actions.