Journal of International Trade, Logistics and Law, Vol. 7, Num. 1, 2021, 67-74 67 PROGRESS OF REGIONAL ECONOMIC INTEGRATION IN EAST AFRICA Abdulmalik Abukar YUSUF Istanbul Commerce University, Turkey Received: March 08, 2021 Accepted: May 10, 2021 Published: June 15, 2021 Abstract: East African countries are deeply committed to adopting and implementing regional integration initiatives, which are viewed as a common approach for the region's growth. At the regional level, the main goal is to create the Economic Community as the sixth and final stage of integration, which includes increasing inter-sectoral coordination and establishing regional free trade zones, common market, economic union, and monetary union spanning the entire continent. In this article, we will look at their priorities, major accomplishments, and problems, as well as the progress achieved in the integration process and the threats it faces. The theoretical section of th is research was carried out in Africa, specifically East Africa. The research data came from articles and document analysis. There were also secondary sources used. The research is one of the first to evaluate integration areas in East Africa that could lead to faster integra tion. It assists organizations such as IGAD, COMESA, and EAC in revising or reassessing their strategies, as well as their institutional weaknesses and strengths, in order to achieve their integration objective successfully. Keywords: Regional Economic integration, trade, Regional integration 1. Introduction East Africa is well-known for its civil wars, drought, and migration. Regional governments also are noted for their internal rivalries, alliances, and anti-alliances. Because there are many different cultures, ethnic tensions, administrative issues, and injustice all affect intra-country politics. Its history is complicated, and it has been heavily inspired by global and local powers from all over the world (Nicolas, 2008). East Africa is divided into three economic blocs: COMESA, IGAD, and EAC, which includes Southern African countries. Conversely, these classifications pose several concerns: Are these organizations complex integrationists? Is it possible to use them? How would they benefit from other African as well as other continents' institutions? What are the outcomes of these organizations? Can East African principles make integration easier? Which kind of integration could East Africans advance: indigenous or imported? Integration encompasses not just the exchange of services and goods, but also the connection of cultures, their desires, and their movements through one state to another. The objective of this paper is not to solve all of these complex issues. Even so, the problems presented are those that must be addressed in every integration process. The regional economic integration initiative in East Africa is making very slow progress. African leaders must convert political will into practical action. We will not just talk about trade ties. Many elements, such as resources, transportation, and defense, must be considered as integration drivers. African policymakers appear to be ignorant of regional and national realities, and each government's weaknesses and strengths. They may not apply the appropriate medicine to the appropriate issue. To complicate things tougher, leaders neglect the will to address all recurrent issues, and East Africa remains a fractured region of Africa with weaker economies at the epicenter of several threats. In addition to better lead by evaluating the overall efficiency of each REC and their member nations, each year, the African regional index report is released with the cooperation of the Economic Commission for Africa (ECA), the African Development Bank (AfDB), and the African Union Commission (AUC). The report's main goal is to determine the weaknesses, strengths, and differences of each regional grouping using five features: trade integration, regional infrastructure, productive integration, microeconomic and financial integration, free movement of people, and then to propose solutions to create a comprehensive Africa. In the scenario of East Africa, Kenya was listed as a Abdulmalik Abukar YUSUF 68 top performer in the EAC in terms of productive integration, trade integration, and free movement of people in 2016. Kenya performed well in COMESA in terms of free movement of people, trade integration, and productive integration. Kenya played well on five of them inside IGAD, except for the free movement of citizens. Ethiopia is not viewed favorably in both IGAD and COMESA (ARIR, 2016). (Stefan Reith, 2012) Stefan draws a comprehensive view of each EAC member county's position. He delves deeply into the EAC's institutional strengths and limitations, as well as Kenya's unique position in reforming this organization. The EAC's high occurrence is "one destiny, one people." Stefan values the EAC more than most well- known federations such as ECOWAS, COMESA, and the 38 SADC since its establishing treaty embodied political union. On the other hand, he condemns the EAC's aggressive strategy, such as establishing a roadmap for a single currency by 2012 and launching the common market early in 2010, as influenced by the NAFTA, EU, and ASEAN. Furthermore, Stefan discusses how EAC is good on paper but poor in practice. He demonstrates the wide gap between expectations and fact, as well as practice and theory. Major claims with a shortage of societal awakening, a failure of work at the required level, and few concrete results can endanger the integration process. Of course, regional integration necessitates a powerful institution, widespread public support, and a full connection from political elites. The EAC is the strongest institution that could act as a blueprint for others. It was founded by Tanzania, Kenya, and Uganda. Therefore, it continued to function in 1977 due to the absence of a guiding role, irresolvable differences of view between leaders (Idi Amin and Julius Nyerere), and uneven distribution of benefits and burdens (Kenyan supremacy). It was reinstated in 1999 (Stefan Reith, 2012). 2. Literature Review Regional economic integration has gained traction in several regions of the world in past decades. There were over 14 arrangements relating to customs unions and free trade zones since 1990. Regional trading agreements offer numerous advantages and may promote economic growth in member states by reducing trade barriers and promoting better flexibility of physical and human resources. These advantages including lower consumer prices, lower transaction costs, more productive resource usage, scale economies, increased competition among businesses, investment and greater certainty, technical advancements, and productivity increases. Regional integration could also contribute to greater assimilation and can supplement multilateralism by establishing a framework that other countries can adopt (Carbaugh, 2015). With these possible benefits, it is not shocking that several nations in the world have pursued increased economic integration. Regional trade deals, on the other side, are unequal in the sense that certain countries are handled diversely than others. Furthermore, since trade bloc members do not achieve further scale economies by multilateralism, they might reduce incentives for countries to seek multilateral agreements. Finally, as recent actions of EU members including Spain and Greece have shown, integration is not a panacea. The lack of exchange rate policies and self-sufficient monetary can have significant consequences when dealing with financial crises. Furthermore, as evidenced by the United Kingdom's recent withdrawal from the EU, non-economic aspects, especially the position of vested interest politics, could be critical (Basnet and Pradhan, 2017). Although African leaders are usually involved in hastening the process of establishing an economic African Economic Community (AEC) by relevant predictors for the cohesion and harmonization of the tripartite free trade agreement (FTA) EAC, COMESA, and SADC. While regional economic communities (RECs) are working hard to accomplish the first three phases outlined in the Treaty Founding the AEC by gradually eliminating customs fees in intra-regional trade, there are significant gaps between their steps of growth. Many RECs have still to establish an FTA, whereas others have formed customs unions (CU). The simultaneous membership of several states in two or even more RECs causes a variation in the rate of growth. That is why it is critical to make tactical determinations and take steps to establish a continental FTA as the first move toward establishing a continental common market, a CU, and achieving the ultimate aim of establishing a fully functional AEC (Marinov, 2016). Regional integration progress in East Africa differs greatly around the three RECs. The EAC is now on the verge of reaching the pinnacle of regional integration, led by IGAD and COMESA. In the last few decades, East Africa has obtained significant strides in regional integration. The EAC is at the forefront of this development, preceded by IGAD and COMESA. The confirmation of the protocol for monetary union by the EAC is one indication of this development, which is significant since macroeconomic convergence is needed for such developed economic integration (AFDB, 2019). Progress of Regional Economic Integration in East Africa 69 East African nations have made strides through customs unions and free trade zones, even though they have not yet reached monetary union. Non-tariff and tariff restrictions, and a shortage of trade interdependence between REC members, commonly stymie intraregional trade. As a result, success in overcoming these restrictions in specific, and specifically in eliminating tariff and non-tariff barriers, could mean an increase in intraregional trade. Even so, intraregional exports recorded an average of 17.3% of total exports in East African states in 2017, which is similar to the continental average of 16.6 percent and represents a five-year drop (AFDB, 2019). One of the latest controversies in reaching higher economic progress is emphasizing regional collaboration above the continental union in pursuing the concept of economic integration. So several researchers of REI have written in support of the various benefits of economic integration (Sako, 2006; Mwasha, 2008; El-Affendi, 2009; Seid, 2013), whereas just few others, like as (Geda and Kebret, 2008) have written in opposition, and others (Reddy, 2010; Biningo, Mwana and Nene, 2012; Zelalem, 2017) have taken a center ground role to address both the benefits and drawbacks of regional economic integration. According to Beneria, strongly developed regions with developed economies like North America (NAFTA), EU, and East Asia (China, Japan, and South Korea) control three-fourths of global trade. They also have a highly distorted volume of trade and path. They have indeed controlled the industrial trade, accounting for 80% of the total. They have a lot of trade with each other. Since Africa's share of intra-African trade and global trade is so limited, much emphasis is now being placed on improving South-South trade as a tool for overcoming such marginalization on a global scale. This horizontal method prevents developed nations' vertical reliance on the north (Beneria, 2019) 3. Benefit of Regional Economic Integration The latest research has concentrated on the advantages of regional economic integration. The majority of them recognize that its advantages should be calculated in terms of the level of integration as well as the level of engagement and willingness of member states to adopt agreements signed. The greater the integration, the greater the advantages to member states. Furthermore, the higher the level of integration reached by member states (out of the necessary actions - 6 Ibid 19 customs union, monetary union, common market, free trade area, and political union), the greater the gains produced (Johnson, 2007). Some scholars (Sako, 2006; Mwasha, 2008; Reddy, 2010) point to the EU's performance since the 1950s as clear evidence or embodiment of the benefits of regional integration. The EU is frequently cited as evidence of how regional integration begins and ends with a powerful union. Nugent outlines the measures in great detail. First, six states created the European Coal and Steel Community (ECSC). Second, the foundation of the European Economic Community (EEC) in 1957, and its obvious popularity, culminated in a reproduction of integration systems around the world. Third, in 1960, the European Free Trade Area (EFTA) was founded. Fourth, in 1979, there was the first democratic vote to the European Parliament. Fifth, the European common market has become a fact in 1992. Sixth, in 1993, the Treaty of Maastricht created the European Union. The Euro is the shared currency of the EU members. This simplifies conducting business, purchasing, selling, investing, and traveling, while also increasing a feeling of connection to the region (Nugent, 2017). According to (Reddy, 2010), regional integration will boost competitiveness, market size, investment, bargaining power, and political stability. As a result, substantial progress will be made in environmental management, infrastructure construction, and security and defense. According to Biningo, economic integration is expected to increase investment and trade, create economies of scale, foster peace, and stability, and strengthen the negotiating power of smaller nations in multilateral or bilateral negotiations (Biningo, Mwana and Nene, 2012). El-Affendi addresses integration primarily in terms of peace and stability. Pending the results of the cold war, there is a significant trend toward regionalism. In addition, he depicts how regional groups play an important role in peacekeeping, which would be strongly endorsed by the UN. He 20 concludes his point by posing the question of whether regional integration reinforces or creates regional conflict. He states the response plainly and simply. It prevents conflict (El-Affendi, 2009). According to a study conducted by the United Nations Economic Commission for Africa, after agreeing on continental or regional arrangements, a great deal of money will be needed to build knowledgeable infrastructures and institutions. As a result, regional agreements encourage nations to leverage money to build infrastructures such as highways, airways, electricity, and communication technology in each nation. Furthermore, regional integration encourages nations to collaborate on human development to provide their citizens with the expertise and skills Abdulmalik Abukar YUSUF 70 needed to operate their organizations at the state level, and active individuals capable of staffing organizations at the continental and regional levels. In other words, states will struggle to get a professional workforce that could help them progress or aid in their transition in any field and to prepare their nationals to travel through integrated areas and find jobs (UNECA, 2012). Another benefit of regional economic integration is a broader range of services and goods. When various nations join forces, they can supply a range of virtually unlimited products. On the other hand, Mwasha's research demonstrates that because neighboring nations incorporate each other, they share mutual values and tastes. As a result, they are unable to provide a wide range of products to customers (Mwasha, 2008). Lower tariffs decrease the production costs and the cost of products for both manufacturers and consumers. It promotes the purchase of further services and goods. Since the range between these nations is limited, the price of product transportation would be lower as well. This encourages even more transactions and consumption. According to (Thompson, 2017) “entrepreneurs in member states would be encouraged to invest and trade within the region due to the absence of regulations or tariffs”. Therefore, there will be plenty of job opportunities. Investors create industries, various business organizations thrive in the region, and employees have numerous employment opportunities (Zelalem, 2017). A further advantage is that a coalition of nations in a region could easily and rapidly reach an agreement and have a stronger position in the global marketplace than individual states. They may have a good opportunity to align their strategies because they share a common background, challenges, and opportunities in their area. Thompson views regional integration as a critical tool for states with weaker economies that require high levels of foreign trade and investment in their area. As economically larger nations participate in the highest degree of integration, such as the EU, they become weaker, because of the principle of "shared wealth". Member states at a lower economic stage of development appear to generate those that are more economically integrated and function effectively to fall behind other foreign competitors in world trade. A good example is the major economic performer in Germany in the EU; high integration means that her opportunity to become the global leader could be shattered. In contrast, for lower levels of economic integration (like the FTA or the Customs Union), as is the example in Africa, some more well-developed states will benefit at the detriment of those in the zone because they export mostly manufactured products. Kenya in East Africa is one such example (Thompson, 2017). To summarize, the overall goal of all RECs should be to boost economic development through collaboration in a variety of economic activities, like infrastructure and trade. Although most African nations are too tiny, gaining access to partner nations' markets is critical for maximizing output, generating enormous income, and obtaining a diverse range of products. 4. Challenges of Regional Rconomic Integration There are several points of contention when it comes to regional economic integration. Scholars (Teunissen, 1996; Elliott, 2017; Thompson, 2017; Zelalem, 2017) generally suggest the following drawbacks of REI. Firstly, states will cede a few of their state sovereignty to powerful supranational institutions. Individual states' financial resources are restricted in large international institutions like the EU. When Greece was thrown into a financial crisis, the nation did not control its currency to reflect the country's economic situation. The EU has the authority to print money. It has so much control over each nation's financial circumstances that member states are unable to solve their financial issues. As a result, if states approach the level of monetary integration, they will not be able to make decisions on their own (Elliott, 2017). The United Nations Economic Commission for Africa's detailed research aims in-depth and scope both the problems and solutions associated with monetary union. While the monetary union has benefits in terms of lower transaction costs, harmonization of the regional price level, and elimination of exchange risk, it exposures the state to asymmetry shocks. Asymmetrical shocks result by using a similar monetary policy, which is ineffective for all member nations. As a result, it could have a negative impact on resolving country-specific macroeconomic shocks. Enabling wage and price stability across states as well as a high level of fiscal integration and commodity diversification are fixes for these asymmetric shocks. (UNECA, 2012). Second, since the dominant culture might be promoted, there will be a lack of distinct minority cultures. It's referred to as ethnic centralization. In the EU, for example, the main working languages are French, Spanish, and German. As a response, minority communications will face repression because they will no more be used for official language. Progress of Regional Economic Integration in East Africa 71 Moreover, other distinct cultural manifestations would be harmed as dominant cultures rapidly overtake them (Berry, 2011). Third, there may be a change in the labor market. To increase their profits, investors typically tend to develop their businesses in lesser wage rate areas. As a result, jobs would move from a good wage to a low wage environment, resulting in job gains in one region while job losses in another. This work outsourcing harms one nation while helping another in the area (Zelalem, 2017). The fourth factor is trade diversion. Trade relations with member states will substitute the prior trade relations with non-member states (Teunissen, 1996; Thompson, 2017). 5. Progress on Regional Integration in East Africa According to (ARIR, 2016) “Progress in African integration is processed across industries, member countries, and regional economic communities”. Communications, transportation, trade, and macroeconomic policy have all made progress. Therefore, there are significant gaps between most regional economic communities' achievements and goals, especially in better macroeconomic convergence, internal trade, physical connectivity, and production”. 5.1 Trade Liberalization and Facilitation RECs are making substantial progress in this field, particularly in terms of COMESA and UEMOA, but progress regarding integrated and harmonized sub-regional trade is sluggish, with formal intra-community/REC trade at a low of about 10.5%. This is primarily attributable to a shortage of diversification and complementarity of production systems, high production costs, and a few states' dominance of export trading. COMESA, CEN-SAD, SADC, and ECOWAS are the leaders in intra-REC trade. In the case of COMESA, for instance, intra-regional trade totaled US$4.8 billion in 2017, accounting for slightly less than 7% of total COMESA trade. While the entry into the strength of the COMESA free trade arrangement has resulted in a significant increase in intra-COMESA trade, the majority of the region's nations continue to reserve preferential access to trade in North America, Europe, or Asia rather than draining into COMESA markets. While some RECs have made progress toward a customs union and free trade, full market integration persists as a long-term goal. 5.1.1 Elimination of Tariffs  EAC members are also implementing tariff cuts. The Protocol on Customs Union was ratified in 2004 and entered into effect in 2005.  COMESA started lowering tariffs in 1994 and aimed to have abolished all of them by the time it established a free trade zone under the provision of the trade rules. Some states have completely liberalized inter- regional trade, while some have only partly liberalized it.  The SADC tariff cut system permitted states to select which goods to reduce duties on as well as the overall target was met. Tanzania's tariff elimination, for instance, could have been phased if striving for a 100% removal in 2012 and the same is true for South Africa.  Tariff elimination attempts in ECOWAS have started, with all members except Liberia having abolished tariffs on unrefined goods. The fast track project between Nigeria and Ghana has kicked off the revival of trade liberalization.  All UEMOA member countries were dedicated to the gradual establishment of a free trade zone from 1994 to 2000.  By 1994, all CEMAC members had abolished tariffs, completing the conditions for a customs union. 5.1.2 Non-tariff Barriers Progress on non-tariff restrictions is more difficult to measure because data on such obstacles is insufficient and, by definition, they are not explicitly observable. Customs officials' rent-seeking conduct stalls customs clearance documents; roadblocks that torment cross-border traders; and lengthy customs formalities are examples of such obstacles. A study conducted by the COMESA secretariat in 2001 verified the impact of non-tariff restrictions on trade flows in the sub-region. Non-tariff restrictions are viewed as a major constraint to intra-regional trade in the East African sub-region, significantly concerning failure to enforce decisions reached via the integration process. One example is the failure to follow the regulatory framework, which was designed to promote trade. Such obstacles to the intra-regional market encourage traders to circumvent formal bureaucracy and involve in informal trading. Abdulmalik Abukar YUSUF 72 Another impediment to the intra-regional market is inadequate or non-existent infrastructure. This circumstance presents incredibly high transportation costs, particularly for landlocked nations. According to a UNCTAD study from 2010, Rwanda's transportation costs can contribute to up to 48% of its export value. Other causes that impede trade include insecurity and crime, which create an insecure and unfriendly business climate. 5.2 Infrastructure and Communication All RECs have implemented some kind of instrument to facilitate transit, reduce costs, and improve performance, such as the Yamoussoukro Determination to progressively liberalize African air transport. Railway interconnection schemes have been proposed in the East and West African sub-region. Despite this, transport costs in Africa continue to be the highest in the global, with several highways, rail networks, and air going unconnected. As a result, the costs of doing business become unsustainable. In areas such as communication, there has been a measurable increase in inter-country accessibility because of global developments in telecommunications technology and private sector participation. For instance, the decision by main telecommunication service provider Zain Company Limited to combine its Tanzanian, Ugandan, and Kenyan networks, creating the globe's first regional "open borders" network (the tariffs for this service are significantly lower than customs duties), can be seen as a significant advance to inter-regional connectivity. Some regional economic communities (RECs) have greater connectivity than others (COMESA, SADC, UMA, and ECOWAS), whereas others (ECCAS, CEMAC, and CEPGL) fall behind. The phenomenal advent of the Internet in recent years has also influenced Africa. However, at a slower pace than in other areas of the globe, Internet access is changing African nations. The landscape is constantly evolving, thanks to major investments in telecommunication services, new alliances between agencies, NGOs, governments, and a slew of public and private programs. The lack of telecommunications infrastructure in most African nations continues to be the most significant impediment to the widespread adoption of Internet technology in Africa. Despite numerous attempts to improve accessibility, such as submarine cable projects, many technical, environmental, operational, and financial bottlenecks continue to stymie Africa's rapid rise of Internet connectivity in comparison to other parts of the globe. Services are mostly restricted to metropolitan areas in most related African nations and are typically only accessible in large cities. In African nations, few such Internet Service Providers (ISPs) provide points of presence (PoPs) from outside cities. This, it has been suggested, is mostly due to weak telephone links in rural areas. Bottlenecks caused by narrow-bandwidth and low-speed cables, weak connection efficiency, and insufficient coverage of the telecommunications networks, and a limited number of cells accessible are all examples of infrastructure issues. Other impediments including usage costs and high installation. Another major impediment to Internet growth in Africa is the massive price of a few of the available long haul (satellite or terrestrial) connections to high-speed Internet backbones. As many would imagine, the massive prices of long-distance access normally translate into high payment and link bills for normal subscribers, posing problems for both end-users and ISPs. Finally, there is a severe shortage of skilled personnel to develop, install, run, assist, and backbone networks and manage Internet nodes. Another significant drawback is the absence of technological assistance for end users. Indeed, several Internet schemes and programs in African nations have been disrupted or even canceled due to a lack of qualified technical personnel. Infrastructure growth in West Africa (ECOWAS) and southern Africa has made particularly rapid progress (SADC). In that area, a joint energy strategy is being developed through the S ADC power reserve. 6. Conclusion Since the world's current pattern favors the formation of regional economic groups, East Africa's step in this process appears crucial, but much progress has been made for faster integration. Pan-African scholars advocate economic integration in order to prevent underdevelopment and the detrimental effects of globalization. REI is more than just calculating future savings and comparing costs and benefits. It entails national economic policies with domestic implications. It is also associated with structural change, which has a particular effect on labor market transition and the sustainability of poor industries. The integration process has advanced steadily and failed miserably of Africa's expectations due to the challenging political and economic conditions in some East African states. Progress of Regional Economic Integration in East Africa 73 Economic liberalism, as contrasted to integration and coordination, has long been a popular economic policy. That is because the processes for mitigating the detrimental effect of trade liberalization and integration, which are primarily of limited duration, are not properly established. The article reviews of this study demonstrated that regional economic integration is a seductive strategy for quicker and collective development and growth for the nations and people of Africa, that integration has assured long-term advantages, and that such long-term benefits outweigh any potential short-term costs. 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