African countries should understand the costs, benefits of regional integration before going into it – Economic expert

Nov. 29, 2021

According to the World bank, thirty-two percent of African countries are landlocked and depend on coastal countries for access to regional and international markets.

While the Africa Continental Free Trade Agree was created for the African continent to have a single market for goods and services, facilitated by movement of persons in order to deepen the economic integration, extensive efforts have been made in recent years to remove trade barriers and foster regional integration, but a lot still has to be done and the World Bank says it has stepped up its support for regional integration, which currently accounts for 13% of its Africa portfolio.

With the need to remove trade barriers in other to foster regional integration in mind, an economic expert has called on countries in Africa to perform a cost-benefit analysis before entering any new stage of integration.

Speaking at a Virtual Regional Course on Economic and Financial Report Writing for Public Relations Officers and Journalists, organised by the West African Institute for Financial and Economic Management (WAIFEM), Dr. Robert Korsu, Executive Director, Economic, Social and Financial Research Institute (ESFRI), Sierra Leone noted that Economic Integration is useful but it is important to note that its implementation can sometimes lack coherence and removing economic obstacles between countries may not be sufficient to produce economically desirable outcomes.

In his lecture titled: Regional Economic Integration, Korsu said removing economic obstacles need to be accompanied by appropriate policies (policy integration) to achieve the following:
– enhanced economic efficiency
– sufficient equity
– sufficient stabilization.

According to him, many countries go into different forms of regional integration with the motive being the expected welfare gain. However, there have been cases of integration failures and they are often associated with deep economic crisis.

Countries should therefore clearly understand the costs and benefits of regional integration before going into it.

He added that the greater the extent of market integration, the greater
the need for policy integration.

“There are different stages of economic integration and they do not necessarily follow once one is achieved all that is required is systematic effort”.

“Economic integration is not necessarily beneficial for countries. Hence, before entering any new stage of integration, countries need to perform a cost-benefit analysis”.

“Political considerations often dominate integration debates. However, economic arguments should play an important role. On the road to monetary integration both nominal convergence and structural considerations should play the role”.

Report by: Theresa Igata