NEWS RELEASE
\nVisa launches first African Integration Index in South Africa<\/p>\n
\u2022 South Africa\u2019s integration improving
\n\u2022 Low levels of regional integration amongst African countries
\n\u2022 Africa still offers major growth potential<\/p>\n
SOUTH AFRICA, 5 June 2013 \u2013 Visa in South Africa today launched the first Visa Africa Integration Index that measures the degree of economic integration within key trade corridors of sub-Saharan Africa, namely West Africa, East Africa and Southern Africa.<\/p>\n
Together with its partners, global payments company Visa touches 500 million people in these key African markets.<\/p>\n
Rationale<\/p>\n
Mandy Lamb, Acting General Manager for Visa sub-Saharan Africa, said: \u201cThere is growing evidence that supports the argument that cross-border interactions, or openness, drives economic growth and socio-economic advancement.<\/p>\n
\u201cOur objective was to construct an index for a number of selected sub-Saharan 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.\u201d<\/p>\n
She added that the Visa Africa Integration Index is particularly timely given the release of the Africa Competitiveness Report 2013 last month.<\/p>\n
The 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\u2019s long-term competitiveness and ensuring that the continent delivers on its massive growth promise.<\/p>\n
Study Methodology<\/p>\n
The study offers a detailed analysis of key country clusters in sub-Saharan Africa, revealing strengths and areas of growth potential.<\/p>\n
The clusters are:
\n\u2022 West Africa: Ghana and Nigeria
\n\u2022 East Africa: Kenya, Uganda, Rwanda and Tanzania
\n\u2022 Southern Africa: South Africa, Angola, Mozambique, Zimbabwe and Zambia.<\/p>\n
The 11 constituent countries are highly representative of the region, with a combined population of 437 million people, or 55 percent of the total population at the end of 2012.<\/p>\n
The study was carried out in conjunction with Professor Adrian Saville, Visiting Professor of Economics at the Gordon Institute of Business Science (GIBS), and Dr Lyal White, Director of the Centre for Dynamic Markets and a Senior Lecturer at GIBS.<\/p>\n
Four key metrics to measure integration were used: 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).<\/p>\n
This TCIP model assigns a numeric value to the level of integration, with the global median score being 100.<\/p>\n
Findings<\/p>\n
Southern Africa cluster Visa Africa Integration Index Score
\nSouth Africa 63.3
\nMozambique 42.4
\nZambia 35.8
\nZimbabwe 31.1
\nAngola 28.8
\nWest Africa cluster Visa Africa Integration Index Score
\nGhana 52.1
\nNigeria 40.6
\nEast Africa cluster Visa Africa Integration Index Score
\nKenya 53.9
\nUganda 48.7
\nRwanda 47.3
\nTanzania 45.3<\/p>\n
Professor Saville said that Africa is still the least integrated region in the world, but there are signs of change. \u201cWhile improving off a modest base, the countries that make up the Index have undergone positive structural transformation over the past decade.<\/p>\n
\u201cThe Index offers both recent and robust evidence of this: all 11 countries show improvements in economic integration over the period measured, namely the four half-year periods that make up 2011 and 2012.\u201d<\/p>\n
South Africa has the highest score on the Visa Africa Integration Index, improving from 61.1 at the start of 2011 to 63.3 at the end of 2012.<\/p>\n
But, like Angola, South Africa is an outlier that does not follow the conventional trend of matched regional and global integration seen elsewhere in the Visa Africa Integration Index.<\/p>\n
In some cases the improvements are modest. Zimbabwe and Angola record gains in integration that amount to less than one percent per year. In other cases the gains are swift and substantial. Rwanda\u2019s index score rises by almost 20 percent over the two years. Ghana, Nigeria and Zambia all record a robust single digit improvement in economic integration.<\/p>\n
Depth and Breath of Integration<\/p>\n
The analysis also considers the depth and breadth of integration, and how integrated each country is globally and regionally. Measuring economic integration by way of depth and breadth provides for a more granular description and better understanding of the nature of integration beyond conventional economic measures.<\/p>\n
In terms of \u201cdepth\u201d, a country is considered to be \u201cdeeply integrated\u201d if the economy is particularly open and highly connected to the rest of the world. However, integration only becomes \u201cdeep and broad\u201d if a highly connected economy is engaged with a wide variety of counter parties across the different strands of its global relationships.<\/p>\n
The chart below shows the depth and breadth component of each country\u2019s integration value measured at the global level and regional level. Combining these four elements produces the final index score.<\/p>\n
Component contributions to the Visa Africa Integration Index (2012)<\/p>\n
South Africa is by far the most integrated economy in Africa, with a global integration score of 39.1 out of 50.0, a regional integration score of 24.2 out of 50.0, producing a final index of 63.3 out of 100.<\/p>\n
South Africa\u2019s impressive global depth and breadth components are indicative of the country\u2019s focus on liberalization dating back to the mid-1990s, higher levels of industrialization, economic diversification, and pursuit of trade agreements and preferential market access arrangements around the globe.<\/p>\n
Secondary Findings<\/p>\n
A second line of integration analysis relates to how connected African countries are to one another. Once again, the evidence points to exceptionally low levels of intra-Africa flows and regional integration that, like low levels of global integration, are a key reason for Africa\u2019s poor economic record.<\/p>\n
Trade relationships effectively illustrate the low degree of Africa\u2019s regional integration. On this score, World Bank data show Africa\u2019s intra-regional trade amounted to just 13.1 percent of its total trade in 2011 \u2013 well below the global average. By contrast, in South-East Asia and Europe where intra-regional trade accounts for 50.2 percent and 72.1 percent of total trade, respectively.<\/p>\n
Implications<\/p>\n
\u201cThe continent\u2019s low level of integration \u2013 with the rest of the world and, more importantly, with one another \u2013 points to an opportunity for large and sustainable gains in prosperity,\u201d Professor Saville noted.
\nAfrica needs to trade and become more integrated in global value chains if it is to harness its natural potential and stimulate wealth and prosperity.<\/p>\n
\u201cThis also means improving integration within Africa: building economies of scale and competitiveness in global markets, and weighing in alongside the likes of Asia,\u201d Saville said.<\/p>\n
Conclusion<\/p>\n
\u201cWe expect the Index to provide thought leadership on Africa\u2019s regional integration and enable us to track changes and progress over time,\u201d added Lamb.<\/p>\n
\u201cThe Index offers Visa an academically rigorous foundation to understand how we can serve Africa better. We hope the Index provides another constructive contribution for policymakers when making strategic economic decisions.\u201d<\/p>\n
Lamb concluded by noting that the findings were unambiguous in at least two regards.<\/p>\n
\u201cFirst, while coming off a modest base, the economies that we measure are rising in terms of the degree and sophistication of economic integration. Second, although the economies have some way to go in terms of catch up, they are catching up.\u201d
\n###<\/p>\n
URL<\/strong>: http:\/\/www.visa.co.za<\/a> Author: Grant Henry<\/strong> from Communications Advisory<\/a>. Originally distributed by MyPR.co.za<\/a>.<\/strong><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" NEWS RELEASE Visa launches first African Integration Index in South Africa \u2022 South Africa\u2019s integration improving \u2022 Low levels of regional integration amongst African countries \u2022 Africa still offers major growth potential SOUTH AFRICA, 5 June 2013 \u2013 Visa in South Africa today launched the first Visa Africa Integration Index that measures the degree of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[3257,1452],"class_list":{"0":"post-20271","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-mypr","8":"tag-public-relations","9":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/20271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=20271"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/20271\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=20271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=20271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=20271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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