Implementation of Trade Liberalization in the African Economic Community (AEC): Challenges and Prospects
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Date
2010-01
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Addis Ababa University
Abstract
In the 21st
Century establishing regional economic integration has been taken as crucial strategy to foster economic development and growth among nations. Economic integration lead to improved trade, economies of scale, enhanced competition and increased technology development. Africa aspires to get integrated since post independence to tackle socio-economic problems of the continent. Founding fathers of the OAU/AEC come up with the AEC Treaty which provides a marvelous economic objectives and mechanisms to be realized through a gradual process within six stages in 34 years to declare economically united Africa.
Since the adoption of the AEC Treaty, the continent began to implement it in accordance to the modalities. The political and legal visions of establishing integrated Africa Contained essential precursors to the movement of economic integration. It is, therefore, the main theme of this thesis is to examine implementation of the AEC Treaty in the light of the modalities of the Treaty and gives emphasis to Challenges and prospects of trade liberalization. In the main, this thesis has tried to identify the major challenges of economic integration in Africa which appear to be impediments in implementing the Abuja Treaty.
The review of the issues indicates that RECs have completed phase one and two, and beginning to implement phase three. Nonetheless, sectoral integration, coordination, harmonization of projects and programme, intra-Africa trade remains too low. To this end, there are contributing factors, interalia, lack of political will, conflict andinstability, lack of effective supranational institutions, overlapping of membership, financial constraints, non-implementation of treaties and protocols and lack of adequate infrastructure are the key challenges.
This study concludes that the challenges in relation to establishing effective economic integration encountered Africa are not inherent weakness of the continent. On the other hand, prospects of the implementation of the AEC Treaty seems to be achievable since it has been theoretically and factually proved that economic integration is a survival strategy to the continent. In addition, the thesis argues regional integration in Africa has to be a viable option to overcome constraints arising from small domestic markets, increase bargaining power, a conducive environment to utilize common resources and combat problems, and can help to make national reforms deeper and irreversible. Moreover, basic lessons can be drawn from this thesis as far as it examines the theoretical and practical aspects of economic integration of the continent.
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Implementation of Trade Liberalization