CHAPTER ONE INTRODUCTION          Background to the statement of the Research Problem

The concept of integration denotes the joining together of two or more economies, polities or abstract entities for a common purpose. Economic integration is therefore the fusion together of two or more economies in order to achieve a common economic purpose. Approaching the concept of economic regional integration as a general term, Ernest Haas writing in 1971, sees it as a process of combining separate economies into larger political communities. To the extent that political and economic forces are inextricably intertwined, any discussion of integration must encompass both economic and political variables.1 Ernest Haas went further to define the term integration as:

The process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations and political activities toward a new center, whose institutions possess or demand jurisdiction over preexisting national states. The end result of a process of political integration is a new political community, superimposed over the pre-existing ones2.

Haas’ position on the concept of regional integration has been supported by Karl Deutsch and other early theorists who noted unequivocally that authentic regional integration encompasses the whole “system”.3 That means that the generic reference to regional integration should be used. Deutsch, has therefore seen the concept of regional integration, as “a process of peacefully creating a larger coherent political system out of previously separate units, each of which voluntarily cedes some part of its sovereignty to a central authority and renounces the use of force for resolving conflict between members”.4

According to Salvatore, as cited by Mwasha, who wrote in 2009 on the “The Benefits of Regional Economic Integration for Developing Countries in Africa: A Case of East African

Community (EAC)”, the concept of economic integration can be regarded as the commercial policy of discriminatively reducing or eliminating trade barriers (technical and non-technical barriers) only between the states joining together.5 Also, Alemayehu Geda and Haile Kibret, observed that the impulse or the drift for regional integration derives its rationale from the standard trade theory, which states that “free trade is superior to all other trade policies”.6 As an extension of this basic principle, therefore, free trade among two or more countries will improve the welfare of the member countries as long as the arrangement leads to a net trade creation. Their argument reflects the fact that historically or originally, regional integration aims solely at trade and other economic benefits. More clearly put, the standard trade theory provides the impetus for the development of the concept of regional integration.

It is imperative to mention that, the coming together of separate economies to exchange ideas, best practices, products and skills would go a long way to greatly benefit in one way or the other all the parties involved in the merger. It is, therefore, in line with this reasoning that there is the need for regional economic integration in Africa. Since the 1960s, independent African states have attempted to create economic groupings ‘in order to improve their bargaining position and achieve “sustained” economic growth and development in a world structured by unequal and dependent relations by the international division of labour.7 According to Yansane, “the purpose for which many African states formed economic integration groupings was to breakdown debilitating dependencies on the old metro poles without shattering the nation- state structures based on the old colonial boundaries”.8 Integration of the sub-region became inevitable in view of the “need to prepare the sub-region, as well as continental Africa, to curb neo-colonial challenges at the first instance, and on the long run square-up efforts to take a strong stand in the global capital-driven economy.”9

Many scholars over the years have been advocating for a strong integration of the African continent in various relevant areas such as economic, political, security and social and justice. Mwasha, for instance opined that the benefits of regional economic integration depend on the level of economic integration and the deeper the integration, the greater the benefits to the participating Partner States.10 Mwasha, added that the degree of integration depends upon the willingness and commitment of independent sovereign states to share their sovereignty.11 Fernandez, also observed that regional economic integration can serve a useful economic purpose beyond the direct gains from trade liberalization, by reducing uncertainties and improving credibility and thus making it easier for the private sector to plan and invest.12 Indeed, reducing uncertainty may be vital for realizing gains from liberalization.13 Whether economies benefit  from a particular regional trade agreement depends on the scope and coverage of its provisions, the nature of the enforcement mechanism and the circumstances in which the agreement can be modified.14 Economic integration can also serve as incentives for investment and attraction of foreign direct investment (FDI). Park and Park, alluded to the fact that general reforms such as stabilization, market liberalization, and privatization adopted under regional economic arrangements can raise returns to all factors and are likely to be more than enough to increase private investment.15

Post-colonial African states have attempted to restructure this system directed toward self- sufficiency, integrated economies, economic decolonization and reduced dependence on state institutions handed over to them by the colonial powers. The desire to adopt economic integration was also as a result of the positive gains the European Union experienced from economic integration. These benefits influenced political leaders of African countries who also decided to “integrate their economies in order to overcome the challenges such as declining economies, mounting debts and the shortfalls in export receipts, the small size, low

per capita incomes, small populations, narrow resources bases they faced at the second decade of their independence.”16

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