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The Road to Regional Integration in Africa: Macroeconomic Convergence and Performance in COMESA

Author

Listed:
  • Fabrizio Carmignani

    (United Nations Economic Commission for Africa and United Nations Economic Commission for Europe)

Abstract

COMESA (Common Market for Eastern and Southern Africa) aims at the establishment of a currency union in 2025. To this purpose, a policy harmonization program and a set of convergence criteria have been set up. A number of projects to foster trade, economic and financial integration have also been launched. Using timeseries econometrics, this paper provides evidence on some of the dimensions involved by such a process. Some highlights are as follows. The monetary policy stance mildly converges across countries; fiscal stabilization is instead still problematic in several member states. In spite of a low level of intra-regional trade, the economic fundamentals in a bulk of member states share a common stochastic trend; this suggests that shocks might be symmetric and hence business cycles synchronized. The implications is that countries might indeed benefit from deep forms of monetary integration. The distribution of income across countries in the region is highly unequal and there is no sign of convergence. In fact, the gap between poorer and richer countries appears to be widening. Against these results, some policy implications can be drawn concerning the design of transition towards monetary unity, mechanisms for self-financing of regional projects and compensation, removal of barriers to trade integration.

Suggested Citation

  • Fabrizio Carmignani, 2003. "The Road to Regional Integration in Africa: Macroeconomic Convergence and Performance in COMESA," Working Papers 67, University of Milano-Bicocca, Department of Economics, revised Dec 2003.
    • Handle: RePEc:mib:wpaper:67
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    File URL: http://repec.dems.unimib.it/repec/pdf/mibwpaper67.pdf
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    Citations

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    Cited by:

    1. Serge Rey & Florent Deisting, 2012. "GDP per Capita among African Countries over the Period 1950–2008: Highlights of Convergence Clubs," Economics Bulletin, AccessEcon, vol. 32(4), pages 2779-2800.
    2. Fabrizio Carmignani, 2010. "Endogenous Optimal Currency Areas: the Case of the Central African Economic and Monetary Community," Journal of African Economies, Centre for the Study of African Economies, vol. 19(1), pages 25-51, January.
    3. Amélie Charles & Olivier Darné & Jean-François Hoarau, 2009. "Does the real GDP per capita convergence hold in the Common Market for Eastern and Southern Africa?," Working Papers hal-00422522, HAL.
    4. Jean-Francois HOARAU, 2009. "INVESTISSEMENTS DIRECTS eTRANGERS ET INTeGRATION ReGIONALE : UN eTAT DES LIEUX POUR LE MARCHe COMMUN D’AFRIQUE DE L’EST ET DU SUD," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 29, pages 69-103.
    5. Carlos Vieira & Isabel Vieira, 2013. "Monetary Integration In Eastern And Southern Africa: Choosing A Currency Peg For Comesa," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 356-372, September.
    6. Amélie Charles & Olivier Darne & Jean-François Hoarau, 2012. "Convergence of real per capita GDP within COMESA countries: A panel unit root evidence," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(1), pages 53-71, August.
    7. Zheng Ying & Chang-Rui Dong & Hsu-Ling Chang & Chi-Wei Su, 2014. "Are Real GDP Levels Stationary in African Countries?," South African Journal of Economics, Economic Society of South Africa, vol. 82(3), pages 392-401, September.
    8. Bhattacharya, Mita & Inekwe, John Nkwoma & Valenzuela, Maria Rebecca, 2018. "Financial integration in Africa: New evidence using network approach," Economic Modelling, Elsevier, vol. 72(C), pages 379-390.
    9. Adom, Assandé Désiré & Sharma, Subhash C. & Morshed, A.K.M. Mahbub, 2010. "Economic integration in Africa," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(3), pages 245-253, August.
    10. Awad, Atif, 2019. "Does economic integration damage or benefit the environment? Africa's experience," Energy Policy, Elsevier, vol. 132(C), pages 991-999.
    11. Serge Rey & Florent Deisting, 2012. "GDP per Capita among African Countries over the Period 1950-2008: Highlights of Convergence Clubs," Post-Print hal-01885301, HAL.
    12. repec:kap:iaecre:v:15:y:2009:i:3:p:278-295 is not listed on IDEAS
    13. Attiat Ott & Oswaldo Patino, 2009. "Is Economic Integration the Solution to African Development?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 15(3), pages 278-295, August.
    14. Button, Kenneth & Martini, Gianmaria & Scotti, Davide & Volta, Nicola, 2019. "Airline regulation and common markets in Sub-Saharan Africa," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 81-91.
    15. Eduardo Almeida & Pablo Guimarães, 2014. "Economic Growth and Infrastructure in Brazil: A Spatial Multilevel Approach," ERSA conference papers ersa14p219, European Regional Science Association.

    More about this item

    Keywords

    Regional economic integration; COMESA; optimal currency area; policy convergence; income convergence.;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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