Regional Economic Integration in Africa: A Review of Problems and Prospects with a Case Study of COMESA

Abstract

Major issues of regional economic integration in Africa could be grouped into two interrelated broad areas: issues of implementation and the limitation of insight form both the theoretical and empirical literature regarding the specific approaches that are appropriate for the continent. Implementation issues cover the economic, political and institutional constraints that surface at the implementation stage of economic integration treaties. The approach issue refers to the menu of options available to pursue economic integration. These options range from a step-wise bilateral cooperation to continent-wide integration. This paper critically reviews these issues and tests the determinants of trade flows using the experience of COMESA as a case study. The major conclusions that emerge from the study are, first, bilateral trade flows among the regional groupings could be explained by standard variables as demonstrated by the results of the conventional gravity model. The result shows that regional groupings had insignificant effect on the flow of bilateral trade. Second, the review of the issues indicates that the performance of regional blocs is mainly constrained by problems of variation in initial condition, compensation issues, real political commitment, overlapping membership, policy harmonisation, lack of diversification and poor private sector participation. These problems seem to have made building successful economic groupings in Africa a daunting task, despite its perceived importance in the increasingly globalised world.