Regional trade agreements in Africa: Success or failure?

Regional trade agreements in Africa: Success or failure?Regional trade agreements (RTAs) have been proliferating in the past three decades, reflecting among other things the increasing involvement of developing economies in international trade.In Africa, particularly in sub-Saharan Africa, the first RTAs were established as mechanisms that would facilitate the continent's unity in post-colonial times.Even today, the majority of African RTAs go beyond the economic objectives of increased industrialisation and trade, aiming at promoting democracy, preventing regional conflicts, harmonising institutional development, etc.1 The economic performance of most African RTAs has not met the expectations of member countries, partly due to below-potential market integration that reflects high trade barriers.However, beyond the removal of trade barriers, when combined with political benefits, the potential deep-integration outcomes of RTAs in Africa can substantially contribute to the inclusion of these economies in global value chains.From a physical and economic geography perspective, regional integration is generally expected to result in higher gains the smaller an economy is.When small markets are combined, regional integration leads to economies of scale.Guillaumont (2013, p. 280) estimates that if the Economic and Monetary Community of Central Africa (CEMAC) customs union and the West African Economic and Monetary Union (UEMOA) customs union had been integrated into a single economy over the period 1976-2011, the average annual per capita income growth in CEMAC and UEMOA would have been 1.7 percentage points and 1.9 percentage points higher, respectively.Moreover, Collier and Venables (2009) show that regional integration has the highest payoffs for landlocked countries which are highly dependent on resource-based exports.Integration in this case would result in a bigger economy and thus, higher output, which would slow down the pace of diminishing returns to the extraction of natural resources.