Regional Paper

Regional Paper

This paper will analyze the role of regional integration in promoting global business in Africa. Additionally this paper will discuss the advantages and disadvantages of regional integration (NAFTA, EU, APEC, ASEAN, CAFTA, etc.). This paper will also compare and contrast the economic development stages of countries within Africa and the ramifications of Africa's economic development for global business. The business world's most significant trend in the new millennium is global competitiveness. Facing opportunities and challenges posed by the paradigm of the global economy, nations are moving to integrate economies with neighbors in order to create a larger of intense competitive regional economic blocs; and engaging in international trading as a regional power.

Advantages and Disadvantages

Regional integration is probably more important in economically distressed countries, such as Africa, than economically sound regions. The combine impact of less developed economies can take advantage of international terms of trade, and the legacy of colonialism, mis-rule, and conflict has meant that Africa has not yet assumed a global market share - despite the significant market size. Africa has seven integrations of regional economic communities which are considers the building blocks for the African Economic Community:

• The Arab Maghreb Union (UMA)

o Algeria, Libya, Mauritania, Morocco, and Tunisia

• The Common Market for Eastern and South Africa (COMSEA)

o Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe

• The Community of Sahel-Saharan States (CEN-SAD)

o Benin, Burkina Faso, Central African Republic, Chad, Djibouti, Egypt, Eritrea, Gambia, Libya, Mali, Morocco, Niger, Nigeria, Senegal, Somalia, Sudan, Togo, and Tunisia

• The Economic Community of Central African States (ECCAS)

o Angola, Burundi, Cameroon, Central African Republic, Chad, Democratic Republic of Congo, Republic of Congo, Equatorial Guinea, Gabon, Sao Tome and Principe, and Rwanda

• The Economic Community of West African States (ECOWAS)

o Benin, Burkina Faso, Cape Verde, Cote d'lvoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo

• The Inter-Governmental Authority of Development (IGAD)

o Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan, and Uganda

• The Southern African Development Community (SADC)

o Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe

These seven trade agreements, and their members, help recognize the importance of economic integration for promotion intraregional trade and accelerating development, which were established by Africa's leaders. Although the developed economic roads are paved with good intentions, there are plenty of potholes to navigate through. (ECA, 2004)

The agreement UMA has numerous members with the specified objective of full economic union. The free trade area, for UMA, has not been achieved but conventions in force for investments, payments and land transports. Integration has been moving slowing for UMA since 1995. COMSEA is a common market in which achieved free trade area among the nine members in October 2000. A customs union is expected to enhance in the near future and a policy convergence criteria has been set for macroeconomics. CEN-SAD has a free trade area and integration in some sectors. Currently a study on feasibility of free trade area has just been launched. ECCAS is attempting a full economic union with their members, in which a study o free trade area is being considered for implementation. ECOWAS is also a full economic union with their members. Tariffs have been removed on unprocessed goods, full elimination of tariffs industrial goods has not yet been achieved, a second monetary zone is in progress, peace and security mechanism is set in place, and macroeconomic policy convergence is in place. IGAD is another full economic union of their members which has multilateral programs elaborated in key priority areas (agriculture and environment, political and humanitarian affairs, and regional economic cooperation, including physical infrastructure projects. Lastly, SADC is also a full economic union which provides free trade area to their members since September