# 29. Africa’s Competitivenes: The Role of Economic Integration and Intra Regional Trade+

Abstract

Even with catch phrases like, “the new growth pole”, “Africa’s growth miracle”, among others, Africa’s records in growth, till date, have fallen short of lifting the continent out of poverty and underdevelopment. This is partly due to the stubborn pessimism scaffolding the trade patterns and global competitiveness of the continent, with its attendant volatility in income and foreign exchange revenues needed to finance its development. But the oft cited lack of diversity among African economies as a factor militating against competitive intra-African trade does not seem to hold much credibility any more. After all, in regions which have encouraged and pursued intra-regional investment and trade, the proportion of mutual trade is about 70 percent among EU-27, 52 percent for Asian countries, over 50 percent for North American countries and 26 percent among the nations of South America (Rugwabiza, 2012).  But since African countries have been “jinxed” to believing that competitive trade within the continent is a non-starter, little or no effort has been devoted to same. It is not surprising that intra African trade is only about ten percent, which contrasts sharply with the other regions just cited.  Even then, focusing on the structure of production alone among African countries is rather narrow.  We show that what are important are not the observed production patterns by themselves, but, in fact, the structure of Africa’s exports and imports or the structure of its production and its consumption.

As the paper shows, if the diversity in African exports and imports is combined with inter African industrial production of these goods and services, the trade creation and trade diversion implied are enough to sustain Africa’s strong growth for years to come. Instead of chasing some elusive historical deus ex machina in regard to Africa’s investment and competitiveness, what is needed is the actualization of African Union’s enacted plan of regional economic communities and its committed goal of the complete unification, that is, economic integration, of the 54 member- nation continent.

 

Keywords: Growth, Competitiveness, Africa, Trade and Production



+ Professor of Economics, Indiana Wesleyan University, 4201 S. Washington St., Marion, IN 46953  oladele.omosegbon@indwes.edu 317-450-0993

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