Abstract
M.A.
The rationale for economic integration is that countries combine to form regional groupings with the belief that this is a more effective way to improve their well-being politically and economically. Theories of economic integration show that integration may have both positive and negative outcomes. Despite the long standing debates on the negative consequences of regional integration, the dominant views indicate that regional integration may improve the welfare of member nations.
The political decision has already been made in favour of trade integration within the SADC region. It is for this reason that this study has been undertaken to determine prospects and problems of economic integration in the SADC. Despite the anticipated problems and challenges for economic integration within the region, some studies and findings show positive prospects. The major findings of this study are that the region is on the right path to economic recovery, and has an opportunity to play a meaningful role within the world economy. The dominant and most industrialized, South Africa, will serve as an economic power within the region.
The reform process that have been initiated by the SADC member countries have now put the regional economies on the right track. The region also had a remarkable economic performance as a result of the implementation of the positive macroeconomic policies and strategies.
Although Africa is not the main player within the world economy, the region has a meaningful role to play, especially if the region's foreign trade increases by the estimated 18 percent.
The role of South Africa as an economic power within the region is expected to serve as a spring-board of economic development within the region. It is also anticipated that economic growth within South Africa may spill-over into the whole region. The smaller SADC economies are likely to benefit from the relocation of South African industries into the region as a result of external tariffs vis-a-vis non member states, as well as higher South African wage levels.
It is, however, acknowledged that integration would benefit some countries more than others. What is of paramount importance is that integration will leave all the countries either better off or not worse off, inside the grouping than the country would have been outside the grouping. This means that the economic welfare increases within the region as long as no member country will not be worse off than before joining the union.
To remedy the possible unequal benefits of economic integration, compensatory and transfer-of-funds strategies will have to be adopted to minimize all the negative impacts of the imbalance between member countries.
The SADC's global competitiveness changed lately as a result of initial steps toward integration and some member countries, are now ranked higher than most countries in the continent of Africa.