The Effects Of Regional Economic Integration On Rwanda’s Trade And Economic Development

Regional integration refers to a process in which states enter into a regional agreement for the purpose of promoting cooperation through institutions and rules. Various studies have shown that regional integration has many political and economic advantages for all member states of the region.This research studies the effects of East African Community EAC regional Economic Integration to Rwanda’s trade and economic development. The resurrected East African Community (our case study) is one of the Regional Integration in Africa. It comprises Kenya, Uganda, Tanzania, Rwanda and Burundi. The study is done by a means of comparison. A comparison is made of the period before Rwanda has entered EAC and after. This means the analysis is made for the period before and after EAC.It is seen that there is more trade after the country had joined the EAC than before. Also foreign direct investment increased sharply after the EAC. Rwanda has benefited from the increased in the FDI. In addition EAC stimulated the tariff reduction within the region which in turn led to trade creation and trade diversion and as well as the improvement of citizens’ welfare in some member states of the EAC particularly Rwanda.However, in order for the impact of Economic integration to be well developed there are several suggestions as policy implications to be done. There shall be effective elimination of non-tariff barriers to trade within the region. Also government needs to promote sectors where trade creation is seen to be visible. Finally, another policy implication is by making local firms competitive and enhancing their economies of scale, additional tax revenue would also be generated. Therefore all these will enable the success and progress of the economic integration.