Perspectives on Regional Integration as a Tool for Economic Growth

Professor Kelly Kingsly

Independent; Copperstone University ; Charisma university

Date Written: June 20, 2019

Abstract

The market size is a key component of turnover in any business community. The more people we have in a market place, the higher our chances of selling our products. The liberation of our continent and country is a function of those we trade with however, it is common knowledge that our focus is on those with hard currency rather than those with an effective demand potential. Gains are not only measured in financial terms but the macroeconomic perspective is key in moving our continent to the next level. The most impactful approach would be to have a giant block regulated by one superstructure.T he integration vision for an African Economic Community through five geographic regions was recommended by the Abuja Treaty (1991). To streamline the existing multiple blocs in these regions, the African Union identified eight Regional Economic Communities (RECs) in its rationalization drive. The integration vision seeks to attain collective autonomy and contribute to raising the living standards of the population through the expansion of African markets and increased trade between Africa and the world.

According to the Bank Group’s Medium-Term Strategy (2008-2012) and Regional Integration Strategy (2009-2012), a Regional Integration Strategy Paper (RISP) will be prepared for the Centre region. Accordingly, the current RISP concerns Central Africa which comprises the ten ECCAS countries: Angola, Burundi, Cameroon, Central African Republic (CAR), Congo, Democratic Republic of Congo (DRC), Gabon, Equatorial Guinea (REG), Sao Tome and Principe (STP) and Chad. Central Africa is mainly characterized by the Congo Basin (CB) which is home to the world’s second forest and water reserve – one of the lungs of the planet; and a considerable but largely untapped mineral and agricultural potential. This is the least integrated region of the continent. Economically, Central Africa performed relatively well over the last ten years, with an average growth rate of about 6.2% during the 1999-2009 period, with 7.3% on average in the six oil-producing countries (Angola, Cameroon, Congo, Gabon, Equatorial Guinea, and Chad) and 4.7% in other countries. Economic growth in the region, which is above the African average (4.8%), was generally marked by higher exports of crude oil and mining products making it possible to finance non-oil activities. Accordingly, the region’s economy remains vulnerable to external shocks, mainly on account of its heavy dependence on oil production. From the political standpoint, the attainment of mutual understanding and concord between nations, in the spirit of the African Union, is the biggest challenge to regional integration in Central Africa. In addition, this region is made up of fragile states, landlocked countries, forested countries, and sparsely populated MICs. This set-up highlights the relevance of the regional integration process in Central Africa. Weak basic infrastructure compared with the continents other regions is also one of the challenges of this region. Specifically, the inadequate interconnection of national transport networks between Central African countries is an obstacle to economic and physical integration and the development of countries in the region. Similarly, electricity and water supply difficulties impede the emergence of a dynamic and competitive private sector. Conversely, the region has advantages that distinguish it from the rest of the continent. Central Africa’s pivotal and strategic position makes it a potentially preferred transit zone between regions of the continent. The region abounds with huge highly valued oil, mineral and mining resources. Recently, proven oil reserves in the region are estimated at 31.3 billion barrels, representing 28% of the continents total reserves. Central Africa has huge agriculture, forestry, and hydroelectric power potential. Climatic conditions and the availability of quality arable land favor agricultural development. Finally, the region has the continent largest hydro-electric potential. Actually, the immense water network density accounts for 60% of Africa’ hydropower potential.

Keywords: Regional intergration, economic growth, tranformation, Africa, financial markets, productivity

Suggested Citation: Kingsly, Professor kelly, Perspectives on Regional Intergration as a Tool for Economic Growth (June 20, 2019). Available at SSRN: https://ssrn.com/abstract=3407539