CHAPTER ONE:
Introduction
1.1. Background of the Study
Regional economic integration became an important subject in Africa as more African countries began to achieve independence from the early 1960s. This was due to the realization that considering colonial rule and the effects of Africa’s balkanization, it would be difficult for newly-created African states to make progress in an international system dominated by powerful, rich and industrialized countries of the West. African states would need to unite. As such, the quest for cooperation and integration was influenced by pan-African desires for collective self-reliance, solidarity, development, peace and unity. This led to the establishment of the Organization of African Unity (OAU) and, subsequently, the formation of sub-regional groupings and institutions to promote regional integration. However, while some level of progress has been recorded at the sub-regional level in some of Africa’s regional economic communities (RECs) such as the ECOWAS, EAC, SADC, the continent has lagged behind other regions in its integration efforts.
Notwithstanding the lack of satisfactory success, regional integration issues continue to feature prominently on Africa’s development agenda as expressed in continental initiatives such as the OAU’s 1980 Lagos Plan of Action; 1991 Abuja Treaty establishing the African Economic Community (AEC); and New Partnership for Africa’s Development (NEPAD) adopted by the African Union. The concept of international cooperation is linked almost automatically to the English Word ''aids''. This connection as well as its translation as ''ayuda'' into Spanish is no accident. Rather, it reflects a situation which existed five decades ago. At that time, the idea of cooperation began to develop on the global scene and was then understood as an aid or transfer of resources by way of grants from the more developed countries to other countries where, due to their level of income and precarious living standards, could be classified as underdeveloped. Presently, the concept of international cooperation has evolved to acquire a more general meaning. This is basically in reply to the increasing complexity of the issue which currently combines the concept of aid and solidarity with that of commercial promotion and political interests. Flowing from this perspective, one could this day, conceive international cooperation as a series of actions that attempt to coordinate policies or join efforts to achieve common objectives on the international sphere. The foregoing explanation which is apparently too general and vague presents an idea of the broad meaning has achieved today. In this sense, the concept economic cooperation is an answer to the emergence of new challenges in the process of globalization and commercial integration that call for the concept of cooperation as a relevant variable to be included. It goes beyond the terms of the political relations between states to include the economic relations established in the international context.
From a historical perspective, it may be reasoned that, in economic terms, states have always maintained relations of exchange and interdependence based on trade and investment. In addition, during the second half of the 20th century, foreign trade became increasingly important as a share of gross domestic product (GDP) and of the socioeconomic development of countries. Specifically, foreign trade has grown at a rate higher than GDP since the 1950s. Therefore, it may be stated that, presently, the existence of global markets is the result of an advanced stage of the process of internalization of the different economies, which began with the start of industrial capitalism in the 19th century.
This notwithstanding, it needs be understood that, features of any phenomenon become more clearly defined as the process becomes more explicit in the everyday activities of societies. The same forces which have given rise to the processes of globalization of the world economies, have also triggered new realities which not only involve more advanced phase in the process of integration but also constitute a completely different state. This new qualitative status of the process of integration may be expressed by the differentiation made by ECLAC, the Economic Commission for Latin America and the Carribbean which distinguishes between the so called ''superficial integration phase'' and the ''deep integration phase''. Superficial integration is the phase in which trade mainly of goods, played the major role. Thus, the goals sought by the different countries were relatively independent from each other. The only other requirement on the international arena was that ''the rules of the game'' should lead to the gradual and progressive liberalization of trade in such a way as to prevent a subsequent invalidation through Administrative measures. Once the rules of the game were established and guaranteed, the market was supposed to be operating as to maximize the benefits for the countries participating in the exchange.
In economics, the word integration was first employed in industrial organization to refer to combinations of competitors, vertical integration, to combinations of suppliers with economic agreements, cartel, concerns, trusts, and merger – horizontal integration referring to combination of competitors, vertical integration of combination of suppliers with customers. In the current sense of combining separate economies into larger economic regions, ''the use of the word integration to the 1930s and the 1940s''(Macblup, 1977). There are economic as well as political reasons why nations pursue economic integration. The economic rationale for the increase in trade between member states of economic unions is that it leads to higher productivity. This is one of the reasons for the global tendency towards the development of economic integration, a phenomenon now realized in continental economic blocs- like the European Union, the European Community, the comprehensive Economic Partnership for East Africa, the Transatlantic Free Trade Area, the Economic Community of West African States (ECOWAS), etc. It is therefore, necessary to identify some of the benefits ECOWAS to member-states since its inception.
Africa is bedeviled by deep-seated poverty level, lowest share of world trade, slow pace of development in human and structural development. This has made regional economic integration pertinent issue. “Just as its importance in enhancing economic growth and development through trade need not to be overemphasized, it also goes with a lot of noneconomic benefits such as the prevention and resolution of conflicts and the promotion of regional security'' (Carbaugh, 2004). In ordinary parlance, the term 'integration' means to bring parts of an object into a complete whole, while in economic terms, it would imply, in its narrowest sense ''the coordination of economic activities within a country for the purpose of enhancing the development of that particular country''(Mutharika, 1972). In the views of Biswaro (2003), ''regional economic integration involves the process of trade, economic and financial convergence of integrating states''.
Imbriani and Reganati (1994), observe that, ''the theory of economic integration evolved from the traditional trade theory which assumes perfect competition and whose major concern is the location of production of different types of goods''. Bhagwati in Jhingan (1986), defines 'free trade policy', as “absence of tariffs, quotas, exchange restrictions, taxes and subsidies on production and consumption'' while Lipsey (2001) believes, a world of free trade would be one with no tariffs and restrictions of any kind on importing or exporting''.
Economic integration introduces a degree of cooperation which ensures the benefits of free trade. The term is defined by Tinbergen (1965) as, “the creation of most desirable structures of international economy, removing artificial hindrances to the optimum operation and introducing deliberately, all desirable elements of coordination or unification. “International economic integration, therefore, refers to a decision or process whereby two or more countries combine into a larger economic region by removing discontinuities and discriminations existing along national frontiers, and by establishing certain elements of cooperation and co-ordination between them.
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