This paper investigates why regional integration does not improve income convergence in Africa, despite the common goal of more open and freer trade. Based on empirical analysis using African countries data, the paper presents the evidence that there has been little progress in income convergence in Africa. The paper shows that despite the importance of regional integration there has been limited progress and prospects of the African integration process are not as promising as would be expected for such an important pillar in Africa's development agenda.
Significant progress has been made by the East African Community partner states in implementing the East African Community customs union. Trade within the East African Community is now free from import duties, and partner states have adopted a three-band common external tariff. This paper assesses how the customs union has supported intraregional trade and industrialization, in particular through the development of competitive smokestack-free industries. It concludes that regional integration has provided a support environment for the development of smokestack-free industries, but significant opportunities still exist within the region.Recommendations are provided on what should be done to harness these opportunities.
Despite concerted efforts, Africa's regional integration process has encountered delays. Since the third stage of the Abuja Treaty in 2008, piecemeal progress has been observed. It therefore begs a difficult but relevant question: why is the regional integration process stalling? The conventional answer lies in challenges such as inadequate financial resources and infrastructure for trade among others. However, an approach is proposed to refocus regional integration on resource-based industrialization. The level of industrialization is examined in Africa using Balassa's Revealed Comparative Advantage Indexes based on the BACI dataset. Further, an input-output table analysis on production of Kenya's trade in intermediate inputs is done based on the GTAP 8 dataset. The analysis finds that while the level of industrialization is heterogeneous among African economies, the overall level is low. Also, in the case of Kenya and five regions in Africa, imported intermediate was found to be a critical input to production, lending support to the importance of trade facilitation measures in ensuring timely and cost-effective sourcing of inputs.
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