Answer to Question #193378 in Economics for Loide

Question

Namibia is a signatory to the Southern Africa Customs Union (SACU) agreement, Southern Africa Development Community (SADC) Agreement and the African Continental Free Trade Area (AfCFTA) Agreement. Such overlapping membership could pose a problem for Namibia. Briefly discuss the possible that could result from such an overlapping membership.

Answer 1

Africa’s appetite for integration outstrips that of any other continent. This has led to an unsustainable situation where African countries often belong to four or more regional entities simultaneously.

While the existence of numerous agreements within the region in itself is not a problem – although it does mitigate the benefits to be obtained from integration – overlapping membership between the groupings has the potential to cause conflict and certainly imposes greater transaction costs on the business communities and governments.

If the current blocs of SACU, SADC, COMESA and the EAC insist on forming their own customs unions, the current form of the regional integration agreements will not be sustainable.