Implications of Isolationist Policies on Regional Integration in Africa

Authors

Department of Economics, University of Ibadan, Ibadan, Nigeria

Abstract

The renewed isolationist rhetoric among countries in the global north has implications for international trade integration. This study investigated the effect of isolationist measures on regional trade integration in Africa. The export supply function was estimated with a dynamic Markov switching model utilizing data between January 2005 and December 2018 for five African countries (Nigeria, Kenya, South Africa, Uganda, and Morocco). The results showed that the current isolationist policies have made Kenya and Uganda conduct more of intra-African trade; Uganda and South Africa to be more integrated into their regional economic trade blocs; and have generated a significant shift in the trade direction of Nigeria, South Africa, and Morocco in favor of non-traditional extra-African trade directions. The key drivers of intra-Africa trade integration are industrial production and relative prices. Hence, African countries need to deepen and synchronize industrial policies, target low inflation and reform their equity markets to foster higher industrial performance required for deeper intra-African trade integration.
 

Keywords

References

Dodaro, S. (1993). Exports and Growth: A Reconsideration of Causality. The Journal of Developing Areas, 27, 227-244.
Draper, P. (2010). Rethinking the (European) Foundations of the Sub-Saharan African Regional Economic Integration: A Political Economy Essay. OECD Development Centre Working Paper, 293, Retrieved from https://www.oecd-ilibrary.org/docserver/5km5zrs9075k-en.pdf?expires=1591695068&id=id&accname=guest&checksum=9825E2895F47DFE78A8FD0BF9CCA2216
United Nations Economic Commission Africa. (2017). Assessing Regional Integration in Africa VIII. Bringing the Continental Free trade Area About. Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-viii
---------- (2016). Assessing Regional Integration in Africa VII: Innovation, Competitiveness and Regional Integration. UNECA Policy Research Report, Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-vii
---------- (2014). Assessing Regional Integration in Africa VI: Harmonizing Policies to Transform the Trading Environment. UNECA Policy Research Report, Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-vi
---------- (2012). Assessing Regional Integration in Africa V: Towards an African Continental Free Trade Area. UNECA Policy Research Report, Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-v
---------- (2010). Assessing Regional Integration in Africa IV: Enhancing Intra-African Trade. UNECA Policy Research Report, Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-iv
---------- (2008). Assessing Regional Integration in Africa III: Towards Monetary and Financial Integration in Africa. Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-iii
---------- (2006). Assessing Regional Integration in Africa II: Rationalizing Regional Economic Communities. Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-ii
---------- (2004). Assessing Regional Integration in Africa I. UNECA Policy Research Report. Retrieved from https://www.uneca.org/publications/assessing-regional-integration-africa-i
Gavin, B., & De Lombaerde, P. (2005). Economic theory of Regional Integration. In Farrell, B. Hettne, and L. Van Langenhove (Ed.). Global Theory of Regionalism: Theory and Practice. London: Pluto Press.
Ghysels, E., Lee, H. S., & Noh, J. (1994). Testing for unit roots in seasonal time series: Some theoretical extensions and a Monte Carlo investigation. Journal of Econometrics, 62, 415-442.
Laursen, F. (2008). Theory and Practice of Regional Integration. Jean Monnet/Robert Schuman Paper Series, Retrieved from http://aei.pitt.edu/8219/1/LaursenLongSympos08RegIntegedi.pdf
Lee, M. (2002). Regionalism in Africa: A Part of Problem or a Part of Solution. Numero Special Polis, 9, 1-24.
Hartzenberg, T. (2011). Regional Integration in Africa. World Trade Organization (WTO) Staff Working Paper, ERSD-2011-14, Retrieved from https://www.wto.org/english/res_e/reser_e/ersd201114_e.pdf
Archawa, P., & Townsend, R. M. (2019). The Impact of Regional Isolationism: Disentangling Real and Financial Factors. Puey Ungphakorn Institute for Economic Research, PIER Discussion Papers,109, Retrieved from https://www.robertmtownsend.net/sites/default/files/files/papers/working_papers/Villages%20-%2022%20April%202019.pdf
Negasi, M. Y. (2009). Trade Effects of Regional Economic Integration in Africa: The Case of SADC. Services Sector Development and Impact on Poverty Thematic Working Group, Retrieved from http://www.tips.org.za/files/13.Trade_effects_of_Regional_Economic_Integration_-_SSD.pdf
Ogunkola, E. O. (1998). An Empirical Evaluation of Trade Potential in the Economic Community of West African States. AERC Research Paper, 84, Retrieved from https://aercafrica.org/wp-content/uploads/2018/07/RP84.pdf
Oyejide, A., & Njinkeu, D. (2001). Implementation of the Trade Liberalization Programs of African Regional Integration Arrangements. Fourth Ordinary Session of the Conference of Ministers of Trade of the OAU/AEC, Abuja (Nigeria), Retrieved from  www.aercafrica.org/documents/AWTS/paper2.doc
Tanyanyiwa, V. I., & Hakuna, C. (2014). Challenges and Opportunities for Regional Integration in Africa: The Case of SADC. IOSR Journal of Humanities and Social Science, 19(12), 103-115.
Iranian Economic Review
Volume 26, Issue 1
March 2022
Pages 19-44

Files

Share

How to cite

Statistics