REGIONAL ECONOMIC INTEGRATION AND AGRICULTURAL SECTOR EXPORT PERFORMANCE (1980-2016): CASE OF COMESA

Chari Abigail

Working Papers from African Economic Research Consortium

Abstract: The study examined the effects of regional economic integration on the agricultural sector export performance in the Common Market for Eastern and Southern Africa (COMESA) region. Panel data was used for the member countries from 1980 to 2016. Gravity model and Software for Market Analysis and Restrictions on Trade (SMART) model were used in estimating the effects of regional economic integration comparing pre and post COMESAFTA period. As suggested by the Hausman test, the random effects model was used to examine the effects of regional economic integration on export performance due to its consistency and efficiency. The results from the study showed that the GDP of the exporting country, GDP per capita of the importing country and the regional economic integration dummy positively affect the agricultural sector export performance in the region. Using the SMART model, the results showed that the formation of the free trade area created trade worth close to US$65 million and positive trade diversion value worth US$5.6 million as well as the total trade effect of US$70.4 million. From the results, the trading bloc policy makers are encouraged to deepen the economic integration so that the policies in the agricultural sector increase the sector's production hence exports. Member countries should also adopt policies that create an investor friendly environment if they are to increase their human development and infrastructure. The study suggested that the trading bloc and its members should engage in research and development so as to advance their technologies hence innovation to increase their gross domestic product.

Date: 2020-09-24
Note: African Economic Research Consortium
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