BY PROVIDENCE OBUH

Visa Nigeria, has unveiled the Africa Integration Index, a study that measures the degree of economic integration within key trade corridors of sub-Saharan Africa.

The study, which offers a detailed analysis of key country clusters in sub-Saharan Africa: West, East and Southern Africa, reveals strength and areas of growth potential. A report jointly produced by the African Development Bank, the World Bank and the World Economic Forum, said closer regional integration would be crucial in addressing underlying weaknesses in Africa’s long-term competitiveness and ensuring that the continent delivers on its massive growth promise.

Four key metrics were used to measure integration: the flow of goods and services or trade (T), financial integration and the movement of capital (C), the flow of information and knowledge (I) and the movement of people (P). This TCIP model assigns a numeric value to the level of integration, with the global median score being 100.

Meanwhile, the integration index constructed for a set of 11 constituent countries, representative of the regions, with a combined population of 437 million people, or 55 per cent of the total population at the end of 2012, shows that Nigeria scored 40.6, below average of the countries measured.

Although, the country made significant strides in regional integration efforts where its score increased from 30.8 to 35.7 in the same period, yet global integration score was relatively stagnant from the start of 2011 to the end of 2012, with only real movement arising in the flow of people.

Speaking at a launch of Visa Africa Integration Index in Nigeria, Country Manager, Visa West Africa, Mr. Ade Ashaye said, “there is growing evidence that supports the argument that cross border interactions or openness, drives economic growth and socio-economic advancement.

“Our objective was to construct an index for a number of selected sub-Sahara African countries to measure their global and regional integration based on recent data. We want to better understand Africa to help unleash the enormous growth potential in electronic payments on the continent, now the heart of the developing world.”

He pointed out that the integration index is particularly relevant, given the release of the Africa Competitiveness Report 2013 earlier this year.

Also, visiting Professor of Economics, Gordon Institute of Business Science (GIBS) Johannesburg and partner to the study, Mr. Adrian Saville, noted that Africa is still the least integrated region in the world, saying, “but there are signs of change. While improving the base, the countries that make up the index have undergone positive structural transformation over the past decade.

“The index offers recent evidence of the 11 countries show improvements in economic integration over the period measured: the four years period that make up 2011 and 2012,” Saville said.

However, South Africa has the highest score on the visa Africa integration index, improving from 61.1 at the start, to 63.3 at the end of 2012.