The trade goes beyond increasing industrialization and trade and

 

The
economic performance of most African Regional Trade Agreements has not met
their expectations, especially due to the very low market integration which
shows high trade barriers.  The first
RTAs were formed in Africa, particularly in the Sub-Saharan region as a means
to promote unity in the continent after the colonial era. A large number of
African trade goes beyond increasing industrialization and trade and focuses on
promoting democracy and reducing the number of regional conflicts.

 

Regional
integration generally tends to result in higher gains for smaller economies as
when the small markets are combined, they lead to economies of scale. Africa
has 34 of the world’s 50 least developed countries and of the 55 African
Preferential Trade Agreements, 43 were South-South and 12 were North-South. The
shift towards South- South shows that least developed countries are focused on
more to be included into the regional networks to strengthen these countries’
bargaining power in multi-lateral trade negotiations. Also, importance of trade
in natural resources is growing exponentially and African countries have till
now been just bystanders. Successful regional integration among these countries
is the way ahead, but a very strong economic base should be the focus of these
RTAs. Linear integration of the goods market with the monetary and fiscal
integration has slowed the progress of these RTAs with the world economy. However,
there have been lesser trade barriers in the region than before, but the high
costs of trade documented in the region has provided negative results for
regional integration.

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Figure 1: Regional
arrangements in Africa

Regional integration in Africa started with the
political determinants of the colonial era which resulted in the creation of arbitrary
borders and varied ethno-linguistic diversities and a large number of conflicts
which led to high trading and communications costs. During the first 10 years
of the independence integration had already started in Africa, with the Lagos
Plan of Action, an initiative of the Organization for African Unity (OUA) in
1980. Three regional agreements were made by the Economic Commission of Africa;
Economic Community of West African States (ECOWAS); Common Market for
Eastern and Southern Africa (COMESA), and the Economic Community for Central
African States (ECCAS), and later, the Arab Maghreb Union (AMU). The leaders of
post-independence Africa were, however, hesitant to empower the disintegration
of national power and the development of a supra-national authority. The varied
diversity across Africa; resource-rich and resource-poor, coastal and
landlocked, artificial borders, many ethnic groups and languages, translated
into different interests. This strengthened the different countries’ demand for
the ‘respect for the sovereignty and territorial integrity of each State and
the inalienable right to independent existence’, as mentioned in the OUA charter.

Following the cold war, regional
integration initiatives entered the second phase, most of which was spent in
the revival of the earlier efforts of integration efforts that had been
neglected or abandoned like the East African Community (EAC), the
non-functioning one such as the Common Market for Eastern and Southern Africa
(COMESA) and some others which overlapped with each other significantly showing
countries “hedging their bets”. This makes the whole integration process complicated
as large number of memberships makes deciding of delegation authorities
difficult. For instance,  Zambia, is both
a member of the COMESA Customs Union (CU)—which requires applying Common
External Tariff (CET) to non-members—and of the Southern African Development
Community (SADC) FTA, putting the country in a conflicting position.