This paper is based on an expert paper written for the E15 Initiative working group on extractive industries. It focuses on the opportunities to anchor mineral infrastructure in regional integration for broader economic development and diversification. The presentation looks at potential synergies and the role for policy makers.

1. What role for policy frameworks?
The E15
Second Expert Group Workshop on Extractive Industries
11 – 12 June 2015, Geneva
Isabelle Ramdoo
Deputy Head of Programme, Economic Transformation
ECDPM
Anchoring mineral infrastructure in
Regional Integration

2. Outline of presentation
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1. The context: why is this question important?
1. Why potential synergies? Some maps to illustrate
1. Where is it happening? Why (not)?
1. What roles for policy frameworks?
1. Key priorities

3. q Lack of infrastructure a significant barrier to mobility (people, goods
and services), productivity and economic development
ü World will require US$ 57 trillion in infrastructure investment from now to
2030
ü Energy and transport infrastructure are particularly important;
ü In Africa, high transport costs add up to 75% to price of goods;
ü Underdeveloped infrastructures skim off at least 2% of Africa’s annual growth.
q Extractive industries are particularly consumer and producer of
infrastructures
ü Extractives are expected to invest up to $ 2 trillion in resource-rich countries
by 2030
ü Capex in infrastructure in bulk ore minerals can go up to 40% (mostly in
transport)
q Regional cooperation and integration matters: Scope to leverage use
of (regional) infrastructure for broader economic development:
ü Africa’s geography is particularly challenging (biggest no. of landlocked
countries)
ü Essential benefit is to provide larger and more competitive markets, reduce
transport costs and establish connectivity across countries.
1. The Context: Why is this question important?

4. q Africa infrastructure needs are enormous…
Africa needs US$93 billion per year to bridge infrastructure deficits
(current spending is only about $45 billion per year)
ü Access to electricity: 30% of the population compared to 70 - 90%
elsewhere in the developing world (Asia, Central America and the
Caribbean, Middle-East and Latin America)
ü Road access rate: 34% compared to 50% elsewhere
ü Access to water and sanitation: 65% of the population compared to 80 -
90% in other developing regions.
ü Telecommunications penetration rate: ~ 3% compared to ~ 40% in other
developing regions (very low penetration rate for broadband services)
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5. Visualizing the deficits
Source: African Union
Energy Railways

6. 2. What potential synergies?
These maps say it all….
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7. Overview of mineral deposits in Sub Saharan Africa
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Mineral industry corridors

8. Infrastructure investments in Sub-Saharan Africa: Key sectors
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Source: Frost and Sullivan, 2013

9. ü (Too) few examples in the extractive sector. Where they exist,
partial successes (MDC – scope is narrow, roads only, short
corridor; SAPP, South Africa driven, low trade (7% of energy
needs)
ü Lessons can be learnt from elsewhere (non-extractives, but
regional focus) (Europe connectivity; Baltics; Central America)
ü Reasons for success:
1.Political leadership;
2.Proper planning and coordination;
3.Strong institutions;
4.Clear regulatory frameworks, implemented, monitored and
evaluated;
5.Incentives (access to cohesion in case of EU; industrial zones
and business prospects in case of GMS)
3. Where is it happening? Why (not?)
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10. 1. Any policy measure must ensure it fit the golden rules
of:
ü Transparency: Any framework (regulatory, voluntary,
incentives-based etc.) should be clear, well presented and
accessible;
ü Predictability: Policy decisions should be well coordinated
(among countries in the region) to prevent policy reversals or
inconsistencies;
ü Flexibility: Policies should be developed in coordination with all
stakeholders to avoid too rigid frameworks.
4. What role for policy frameworks?
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11. 2. Regulations important:
ü When they exist, they should be implemented: Trade
protocols, investment codes, road regulations, power pool MOUs
should be duly implemented or countries must be supported to do
so.
ü If they are not robust enough, they should be strengthened:
Eg. Customs procedures for effective border posts.
ü If they are outdated, they should be adapted: E.g
harmonisation of certain regulations to ensure cross-border
infrastructure provision
ü If they do not exist, may be they should be created:
Dedicated regional authorities to coordinate and ensure proper
functioning of regional infrastructure (like the MCLI for e.g.)
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12. 3. But regulations are not the panacea: Alternatives are
important:
ü Incentives: Compensation mechanisms to incentivise private
operators to share their infrastructure;
ü Sequencing: upfront project design and economic growth poles;
ü Coherence: Bridge the disconnect between infrastructure policies
and agricultural/ industrial policies;
ü Alignment of strategies and policies: national and regional
infrastructure priorities;
ü Collaborative partnership and multi stakeholder approach:
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13. 5. Key priorities
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14. Thank you
www.ecdpm.org
www.slideshare.net/ecdpm
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