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Regional Integration: Comparison Between SADC and ECOWAS

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Regional Economic Integration in West Africa

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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.

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Author information

Authors and Affiliations

  1. University Paris 1, Paris, France

    Falilou Fall

  2. ENSAE, Malakoff, France

    Blandine Vachon

  3. MAE, Ministry of Foreign Affairs, Paris, France

    Cosimo Winckler

Authors
  1. Falilou Fall
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  2. Blandine Vachon
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  3. Cosimo Winckler
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Corresponding author

Correspondence to Falilou Fall .

Editor information

Editors and Affiliations

  1. CREPOL - Center for Research on Political Economy, Dakar, Senegal

    Diery Seck

Additional information

Disclaimer

 This paper does not reflect any of the views of the French Ministry of Foreign Affairs, or those of the Ecole Nationale de la Statisique et de l’Administration Economique. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors.

Appendices

Appendix 1: Evolution of Imports and Exports for SADC and ECOWAS

Fig. 2
figure 2

SADC exports (WTO data)

Full size image
Fig. 3
figure 3

SADC imports (WTO data)

Full size image
Fig. 4
figure 4

ECOWAS exports (WTO data)

Full size image
Fig. 5
figure 5

ECOWAS imports (WTO data)

Full size image

Appendix 2: Share of Global Flows in 2010

Fig. 6
figure 6

WTO data for 2010. na not available

Full size image
 

Imports

Exports

Country

Share of exchanges

Global rank

Share of exchanges

Global rank

WAEMU

Merchandises

Services

Merchandises

Services

Merchandises

Services

Merchandises

Services

Benin

0.01

0.02

148

148

0.01

0.01

140

151

Burkina Faso

0.01

0.02

151

142

0.01

0

142

163

Cote d’Ivoire

0.05

0.06

99

95

0.07

0.02

82

126

Guinee-Bissau

0

0

195

190

0

0

178

190

Mali

0.02

0.03

138

130

0.01

0.01

128

144

Niger

0.01

0.03

144

120

0.01

0

147

171

Senegal

0.03

0.03

119

122

0.02

0.01

125

118

Togo

0.01

0.01

157

154

0.01

0.01

155

148

WAEMU

0.14

0.2

143.9

137.6

0.14

13.1

151.4

 

Appendix 3: Exports Adressee Over Time

Percentage of exports by destination (in terms of revenue)

 

SADC

ECOWAS

WAEMU

 

1995–2000

2001–2004

2005–2010

1995–2000

2001–2004

2005–2010

1995–2000

2001–2004

2005-2010

High income countries

72.65

71.75

59.65

63.32

56.2

47.32

51.15

39.78

37.7

Arab-world

2.07

1.65

2.9

1.57

1.1

1.86

2.51

1.81

2.57

Developing countries in SSA

12.04

13.56

18.45

12.1

19.43

20.4

21.35

34.91

33.71

Developing countries outside SSA

9.98

10.09

19.64

15.44

16.13

24.62

24.67

19.78

24.07

  1. Source: World Bank Indicators

Appendix 4: Openness Rate

REC and leading country’s openness rate over the period

REC

1995–2000

2001–2004

2005–2010

SADC

0.56

0.33

0.74

SACU

0.52

0.58

0.63

ECOWAS

0.35

0.36

0.36

Nigeria

0.80

0.75

0.70

WAEMU

0.63

0.66

0.70

Cote d’Ivoire

0.74

0.81

0.85

  1. Source: Based on world development indicators

Appendix 5: Basic Gravitational Model and Augmented Equations

5.1 SADC OLS Estimates, 1995–2010

Fixed effects were controlled by time dummies and clustering of exporters

 

Model 1 (gravitation equation)

Model 2 (1 + trade costs)

Model 3 (2 + economic dynamics)

Model 4 (3 + institutions)

GDP of exporter (current mn US$)

0.000000001

0.000000001

0.000000001

0.000000001*

(0.000000000)

(0.000000000)

(0.000000000)

(0.000000000)

GDP of importer (current mn US$)

0.000000001**

0.000000000*

0.000000001*

0.000000000

(0.000000000)

(0.000000000)

(0.000000000)

(0.000000000)

Weighted distance (population-weight, km)

−0.000003004***

−0.000002914***

−0.000002885***

−0.000001954***

(0.000000838)

(0.000000811)

(0.000000800)

(0.000000512)

Exporter

Cost to export (US$ per container)

 

−0.000012448

−0.000011709

−0.000011726

 

(0.000006686)

(0.000006054)

(0.000006035)

Cost to import (US$ per container)

 

0.000008550

0.000007970

0.00000685

 

(0.000005414)

(0.000005030)

(0.000005220)

Time to import (days)

 

0.000173185*

0.000198581*

0.000228833**

 

(0.000078263)

(0.000085367)

(0.000083857)

Tariff rate, applied, weighted mean, all products (%)

 

0.000006846

0.000021378

0.000011251

 

(0.000024706)

(0.000026089)

(0.000022954)

Cost to import (US$ per container)

 

0.000000132

0.000000401

−0.000000136

 

(0.000000510)

(0.000000399)

(0.000000294)

Tariff rate, applied, weighted mean, all products (%)

 

0.000032694

0.000026469*

0.000013999

 

(0.000017001)

(0.000011181)

(0.000011366)

Roads, paved (% of total roads)

  

−0.000029349

−0.000010680

  

(0.000020205)

(0.000013149)

Imports of goods and services (annual % growth)

  

−0.000007605

−0.000018766

  

(0.000053674)

(0.000054253)

Exports of goods and services (annual % growth)

  

0.000070816

0.000056221

  

(0.000059433)

(0.000051594)

Industry, value added (annual % growth)

  

0.000009226

0.000004208

  

(0.000072071)

(0.000058474)

Agriculture, value added (annual % growth)

  

−0.000010594

−0.000013587

  

(0.000070553)

(0.000061138)

Services, etc., value added (annual % growth)

  

−0.000148587

−0.000166438

  

(0.000140470)

(0.000139898)

Manufacturing, value added (annual % growth)

  

−0.000114466*

−0.000097469*

  

(0.000054550)

(0.000047385)

Importer

Roads, paved (% of total roads)

  

−0.000010782

0.000007247

  

(0.000006728)

(0.000007129)

Imports of goods and services (annual % growth)

  

0.000010774

0.000001520

  

(0.000011594)

(0.000014575)

Exports of goods and services (annual % growth)

  

−0.000016723

−0.000037042*

  

(0.000015576)

(0.000016295)

Industry, value added (annual % growth)

  

0.000066738*

0.000070025**

  

(0.000029604)

(0.000025805)

Agriculture, value added (annual % growth)

  

0.000037383

0.000045505

  

(0.000021450)

(0.000023248)

Services, etc., value added (annual % growth)

  

0.000027666

0.000023322

  

(0.000050221)

(0.000046408)

Manufacturing, value added (annual % growth)

  

−0.000014076

0.000007503

  

(0.000012133)

(0.000014244)

Regional characteristics

Gdp of leader (constant 2000 US $)

  

−0.000000000

−0.000000000

  

(0.000000000)

(0.000000000)

Gdp of region (constant 2000 US $)

  

0.000000000

0.000000000

  

(0.000000000)

(0.000000000)

Battle-related deaths (exporter)(number of people)

   

−0.000002088*

   

(0.000000824)

Battle-related deaths (importer) (number of people)

   

−0.000001408***

   

(0.000000406)

One for contiguity

   

0.099817336***

   

(0.029764886)

One if a language is spoken by at least 9 % of the

   

0.004121298**

Population in both countries

   

(0.001508841)

Common legal origin

   

−0.000580729

   

(0.000898401)

One for common colonizer post 1945

   

0.001117352

   

(0.001974749)

Constant

0.028849828***

0.026713916***

0.029642768***

0.018059550***

(0.007876255)

(0.007193926)

(0.008225510)

(0.005087587)

5.2 ECOWAS OLS Estimates, 1995–2010

Fixed effects were controlled by time dummies and clustering of exporters

 

Model 1 (gravitation equation)

Model 2 (1 + trade costs)

Model 3 (2 + economic dynamics)

Model 4 (3 + institutions)

GDP of exporter (current mn US$)

−0.000000960*

−0.000001132*

−0.000001173*

−0.000015005*

(0.000000326)

(0.000000465)

(0.000000533)

(0.000004826)

GDP of importer (current mn US$)

−0.000000087

−0.000000061

−0.000000151

0.000001939

(0.000000131)

(0.000000101)

(0.000000071)

(0.000004457)

Weighted distance (pop-wt, km)

0.000005193

0.000006148

0.000005238

0.000075857

(0.000009137)

(0.000010041)

(0.000009545)

(0.000190024)

Exporter

Cost to export (US$ per container)

 

−0.000115243

−0.000108617

0.000459655*

 

(0.000091437)

(0.000104151)

(0.000155192)

Cost to import (US$ per container)

 

0.000050395

0.000043277

−0.001066940

 

(0.000083671)

(0.000079621)

(0.000606337)

Time to import (days)

 

0.000924354

0.000736402

0.010367521

 

(0.002546651)

(0.002977881)

(0.007412750)

Tariff rate, applied, weighted (%) mean, all products

 

0.003520863

0.003746173

0.018791017*

 

(0.003922823)

(0.003764270)

(0.006556396)

Cost to import (US$ per container)

 

0.000014441

0.000005392

0.000774740*

 

(0.000015366)

(0.000006381)

(0.000296712)

Tariff rate, applied, weighted(%) mean, all products

 

0.000686430

0.000421525

−0.021068090

 

(0.000551083)

(0.000431472)

(0.013394095)

Roads, paved (% of total roads)

  

0.000036881

−0.002504209

  

(0.001157985)

(0.001797708)

Imports of goods and services (annual % growth)

  

0.000378399

−0.020548336

  

(0.001039557)

(0.022497233)

Exports of goods and services (annual % growth)

  

0.000276975

0.005332885

  

(0.001674619)

(0.007611829)

Industry, value added (annual % growth)

  

0.000453099

0.098618160*

  

(0.002276938)

(0.033762821)

Agriculture, value added (annual % growth)

  

0.001121895

−0.006290263

  

(0.001469741)

(0.006273985)

Services, etc., value added (annual % growth)

  

0.002887031

0.014486231

  

(0.003784952)

(0.013672443)

Manufacturing, value added (annual % growth)

  

0.003395197

−0.077503931*

  

(0.002307559)

(0.033539057)

Importer

Roads, paved (% of total roads)

  

−0.000285483

0.000742602

  

(0.000275832)

(0.003777166)

Imports of goods and services (annual % growth)

  

−0.000302464

0.014471593

  

(0.000453357)

(0.017789164)

Exports of goods and services (annual % growth)

  

−0.000308690

0.002742438

  

(0.000398954)

(0.006664289)

Industry, value added (annual % growth)

  

0.000031377

−0.091392420

  

(0.000318239)

(0.042510859)

Agriculture, value added (annual % growth)

  

0.000182207

0.006297388

  

(0.000302425)

(0.006035650)

Services, etc., value added (annual % growth)

  

0.000198404

0.012793635

  

(0.000445730)

(0.011674590)

Manufacturing, value added (annual % growth)

  

−0.000578954

0.057728605

  

(0.000540759)

(0.034012653)

Regional characteristics

GDP of leading country (current 2000 $)

  

0.000000000

0.000000000

  

(0.000000000)

(0.000000000)

GDP of ECOWAS region (constant 2000 $)

  

−0.000000000

−0.000000000

  

(0.000000000)

(0.000000000)

Battle-related deaths (number of people)

   

−0.000081264

   

(0.000070125)

Battle-related deaths (number of people)

   

0.000068705

   

(0.000060424)

One for contiguity

   

−0.059559681

   

(0.271821973)

One if a language is spoken by at least 9 % of the

   

1.599560467

Population in both countries

   

(0.828583121)

Common legal origin

   

0.102372882

   

(0.216002581)

One for common colonizer post 1945

   

−1.586363038

   

(0.820105020)

Constant

0.187384902***

0.167476627***

0.137809526**

−0.079552334

(0.041405699)

(0.039919778)

(0.042599790)

(0.495759783)

5.3 WAEMU OLS Estimates, 1995–2010

Fixed effects were controlled by time dummies and clustering of exporters

 

Model 1 (gravitation equation)

Model 2 (1 + trade costs)

Model 3 (2 + economic dynamics)

Model 4 (3 + institutions)

GDP of exporter (current mn US$)

−0.000000000

−0.000000000

−0.000000000

−0.000000000

(0.000000000)

(0.000000000)

(0.000000000)

(0.000000000)

GDP of importer (current mn US$)

−0.000000000*

−0.000000000*

−0.000000000

0.000000000

(0.000000000)

(0.000000000)

(0.000000000)

(0.000000000)

Weighted distance (pop-wt, km)

−0.000001779***

−0.000001791***

−0.000001757***

−0.000000798***

(0.000000401)

(0.000000399)

(0.000000389)

(0.000000214)

Exporter

Cost to export (US$ per container)

 

−0.000009936*

−0.000009299*

−0.000008130*

 

(0.000004289)

(0.000004572)

(0.000003976)

Cost to import (US$ per container)

 

0.000005274

0.000004745

0.000004186

 

(0.000003494)

(0.000003494)

(0.000003209)

Time to import (days)

 

0.000064534

0.000058168

0.000032796

 

(0.000096272)

(0.000097278)

(0.000096182)

Tariff rate, applied, weighted mean, all products (%)

 

0.000118866

0.000095386

0.000075451

 

(0.000091782)

(0.000086703)

(0.000088764)

Cost to import (US$ per container)

 

0.000000942

0.000000770

0.000000942

 

(0.000000840)

(0.000000775)

(0.000000758)

Tariff rate, applied, weighted mean, all products (%)

 

0.000111615

0.000087984

0.000076596

 

(0.000074316)

(0.000072198)

(0.000079729)

Roads, paved (% of total roads)

  

−0.000055291***

−0.000037049**

  

(0.000015385)

(0.000013674)

Imports of goods and services (annual % growth)

  

−0.000035008

−0.000012145

  

(0.000029788)

(0.000031593)

Exports of goods and services (annual % growth)

  

−0.000048767

−0.000016545

  

(0.000072200)

(0.000069934)

Industry, value added (annual % growth)

  

0.000148573*

0.000101431

  

(0.000069662)

(0.000066706)

Agriculture, value added (annual % growth)

  

0.000086167

0.000057251

  

(0.000050273)

(0.000044947)

Services, etc., value added (annual % growth)

  

0.000036206

0.000060004

  

(0.000152650)

(0.000152550)

Manufacturing, value added (annual % growth)

  

−0.000041814

−0.000016755

  

(0.000038035)

(0.000039536)

Importer

Roads, paved (% of total roads)

  

−0.000049864***

−0.000030800***

  

(0.000012704)

(0.000008273)

Imports of goods and services (annual % growth)

  

−0.000008420

0.000008147

  

(0.000022849)

(0.000025243)

Exports of goods and services (annual % growth)

  

−0.000053836**

−0.000026318

  

(0.000020593)

(0.000018607)

Industry, value added (annual % growth)

  

0.000020976

0.000000716

  

(0.000026313)

(0.000019149)

Agriculture, value added (annual % growth)

  

0.000046383*

0.000023266

  

(0.000020890)

(0.000015461)

Services, etc., value added (annual % growth)

  

−0.000010895

0.000026368

  

(0.000056939)

(0.000054923)

Manufacturing, value added (annual % growth)

  

−0.000006651

0.000013370

  

(0.000011822)

(0.000018074)

Regional Characteristics

GDP of leading country constant 2000 $

  

0.000000000

0.000000000

  

(0.000000000)

(0.000000000)

GDP of UEMOA region constant 2000 $

  

−0.000000000

−0.000000000

  

(0.000000000)

(0.000000000)

Battle-related deaths, exporter (number of people)

   

−0.000000809

   

(0.000000492)

Battle-related deaths, importer (number of people)

   

−0.000000809***

   

(0.000000159)

One for contiguity

   

0.051125214***

   

(0.013101407)

One if a language is spoken by at least 9 % of the population in both countries

   

0.014887259***

   

(0.003690201)

Constant

0.016294816***

0.015272784***

0.017400122***

0.006183705**

(0.003662205)

(0.003283899)

(0.003799242)

(0.001855934)

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Fall, F., Vachon, B., Winckler, C. (2014). Regional Integration: Comparison Between SADC and ECOWAS. In: Seck, D. (eds) Regional Economic Integration in West Africa. Advances in African Economic, Social and Political Development. Springer, Cham. https://doi.org/10.1007/978-3-319-01282-7_9

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