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CHAPTER 8A

REGIONAL CO-OPERATION
What is Regional Co-operation or Integration?

This is a grouping of countries that share a common geographical location either based on
political or economic association or both. The main objectives of co-operation/integration
are to:

 Promote economic prosperity.

 Improve trading relations and links between member countries.
 Maximize economic growth.
 Establish financial stability in the region.
 Create a huge regional market that will stimulate the region’s economic growth.

Forms of Regional Integration/Co-operation

(a) Free Trade Area:

This involves the removal of tariffs and trade quotas among member states.
The countries can maintain independent customs unions against non-members.

(b)Customs Unions:

It eliminates tariffs and quotas among member states. They form a single
customs union that discriminates against non-members. The single customs
authority collects all the revenue and shares it out to member states.

Example: The Southern African Customs Union (S.A.C.U.).

(c) Common Market:

It eliminates tariffs, quotas, and obstacles to free trade among member states.
All or most of the economic policies are decided and implemented uniformly.

Example: The European Economic Commission (E.E.C.).

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(d) Economic Union/Community:

Member states adopt uniform (common) economic policies and have a common
currency; tat is they operate as if they are one country.

Example: The European Union.

(e) Political Union: -

A grouping of countries with the same political, economic and security concerns.

Example: North Atlantic Treaty Organisation (NATO); African Union.

Reasons for Regional Operation/Co-operation in Less Developed

Countries.
 Small markets made worse by the low incomes i.e. low purchasing power.
 Desire to expand/enlarge markets.
 Colonial powers divided Africa into small uneconomic geographic units that
cannot stand on their own.
 To promote economic growth or development.
 Attract more foreign investment.
 To speak with one voice in international affairs e.g. ECOWAS fighting to stop
U.N. sanctions against Liberia.
 Greater efficiency is ensured administering or planning for larger units.

Economic Advantages Of Integration

 Specialisation:
Each country will produce and sell products it has the best advantages for

Example: one produces grain, another beef, another textiles etc.

 Larger market:
Smaller countries come together to form a larger and more powerful market
for goods and services.

 Attraction of more Investment:

A larger market created by the common market attracts more investors.

 Operation of common services:

The states are able to pool their resources and create better services.
Example: telecommunications, roads, airways, rail and road transport etc.
 Mobility of factors of production:
Labour and capital will be able to move freely within the region.

 Increased competition:
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The opening up of borders leads to greater competition among firms
and greater productivity.

Problems or Difficulties of Integration.

1. Political Problems:

 Different and incompatible political ideologies

Example: Socialism versus Capitalism.

 Wars and political instability.

 Dictatorships/ leaders who hang on to power for too long.
 Internal problems such as poverty and tribalism.
 Lack of political will by leaders who only give lip service to integration.

2. Economic Problems:
 Uneven distribution of new industries, which may concentrate in those
countries with better infrastructures.
 Some countries are more advanced industrially than others.

Example: South Africa in the SADC.

 It is difficult to get independent states to work together in economic planning

because of different economic approaches.
 Poor communications- most transport networks in Southern Africa are
‘facing’ towards Europe through their linkages to ports. There are poor links
between member states.
 Richer nations within the union tend to harbour the pain of having to share
their wealth with the others.
 Most African countries produce the same type of commodities, raw materials,
which makes it difficult to develop trade links among member states.
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Southern African Customs Union (SACU)

It was formed in 1910.

Member states:
South Africa, Botswana, Lesotho, Swaziland and Namibia.

How it operates:
 Very low customs duty on goods bought from member states ie. 10% of the
value of goods.
 Free movement of goods, services and people among member states.
 All import taxes are set by SACU.
 South Africa keeps the SACU Common Revenue Fund and shares it out to
member states after every two years.
 SACU revenue is obtained from the following:
 Railway charges on non-members.
 Import duty/tax.
 Insurance charges, road tolls, port charges.
 South Africa has the final say in SACU.

Advantages/Achievements

 Free movement of goods and services across borders.

 The less developed member states obtain goods cheaply from South Africa.
 The smaller countries have access to the larger South African market.
 The smaller countries earn a lot of revenue from SACU, for example Swaziland
and Lesotho are heavily dependent on this.
 Citizens of the poor countries have been able to obtain employment in the South
African mines, industries and farms.
 The development of an integrated and efficient transport network.
 Relatively stable currencies pegged against the South African Rand.

Disadvantages/Problems

 All interests accrued by the common fund are all taken by South Africa.
 South Africa gets the lion’s share (i.e. biggest share) of the SACU fund- two
thirds.
 Botswana, Swaziland, Lesotho and Namibia provide South Africa with a
protected market for its manufactured goods.
 The smaller countries cannot develop industrially because South African
industries flood them with their cheaper goods.
 SACU members are forced to buy most of their goods and services from S.A. at
higher prices than on the World market.
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 South Africa dictates to and bullies all the other members in the formulation of
policies, for example tariffs against Hyundai cars from Botswana.

SOUTHERN AFRICA DEVELOPMENT COMMUNITY (SADC)

It was initially formed as the Southern Africa Development Co-ordination Conference

(SADCC) in 1980.

Member states:

Angola Mozambique
Botswana Swaziland
D.R. Congo Tanzania
Lesotho South Africa
Malawi Zimbabwe
Namibia Zambia
Mauritius .

The headquarters are in Gaborone, Botswana.

Aims of SADC

 Economic cooperation among member states.

 Use resources to promote national and regional policies.
 To integrate the region equitably.
 To form a common security policy and body.
 To develop and integrate the region’s transport network.
 Reduce tariffs and increase volume of trade among member states.

Member States Duties:

1. Angola – Energy development.

2. Botswana – Livestock, Wildlife diseases and Agricultural research.
3. Lesotho – Soil and Water conservation.
4. Mozambique – Transport and Communication.
5. Namibia – Marine fisheries and Resources.
6. South Africa – Finance and Investment.
7. Swaziland – Education and Manpower Development.
8. Tanzania – Industrial Development and Trade.
9. Zambia – Mining.
10. Zimbabwe – Food security.
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Achievements Of SADC:
1. Agriculture:
 Developed agricultural research stations in member countries.
 New hybrid crop varieties.
 Control of tsetse flies, rinderpest and foot and mouth disease in member
countries.

2. Transport:
 Rehabilitation of regional ports eg. Beira and Maputo in Mozambique.
 Development of new roads eg. Trans-Kalahari highway.
 Rehabilitation of railway lines.

3. Drought Monitoring Centre for the region established in Lesotho.

4. Education: Coordination and common training of SADC personnel.
5. Grain storage facilities in all the countries have been expanded.
6. Strengthened regional peace, solidarity and security.

Example: SADC force stopped a military coup in Lesotho.

Problems And Failure:

1. Shortage of capital. SADC largely depends on foreign loans and donations.

2. South Africa dominates SADC economically.

3. Wars in Mozambique, Angola and D.R. Congo have made regional integration
impossible. They have destroyed economies and infrastructures.

4. They have failed to increase trade amongst themselves because most of them are
largely dependent on raw materials and they are closely linked to former colonial
masters.

5. Failed to attract meaningful foreign investment to the region.

6. Failed to control rogue states within the region,

Example: Zimbabwe.

7. SACU has hindered free trade between the SACU and non-SACU members.

Example: Botswana cannot trade freely with Zimbabwe.

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