Regional integration: Comparison between SADC and ECOWAS

Abstract

As the priority over regional integration in Africa is gaining a political momentum, this paper draws an overview on commercial regional integration over the past 15 years in two Regional Economic Communities (REC), ECOWAS and SADC. Since WAEMU is part of ECOWAS, we distinguish their respective dynamics as they may sometimes differ. Evolution of intraregional trade from 1995 to 2010 is proxied by the ratio of intraregional exports over total national exports over detailed bilateral trade data. As widely recognized, intraregional trade has slowly evolved at low levels since 1995. Based on gravity equations and national data, our study disaggregates some determinants of intraregional trade. As expected, bad national infrastructures affect intraregional trade, so as sectoral economic trends such as industrial and manufacturing growth. We also study whether the existence of regional leaders has positive or negative influences over intraregional trade. Adverse effects seem not to exist as the leading economies' performance appears to be positively correlated to intraregional trade. Conversely, overall economic performance of RECs' does not systematically translate into increased intraregional trade. When differentiating exports by types of goods, differences between levels of industrialization and development of RECs become more salient. SADC appears to be less regionally integrated and is more open to global trade. Conversely, ECOWAS and WAEMU are more integrated regionally but less integrated into global trade. Beyond a political processes, intraregional exports seems therefore to be a second best solution for these countries.