The Impact Of Regional Integration On Central Africa Economy Growth

The transformation of the present world is unquestionable, from the stage of nations struggle in so many relations to a new stage of public cooperation and multiple transactions in economic activities. Since the 19 th century, a total of 13 th regional integration has come to exist, among which CEMAC. In this research, the main aim is to show out the impact of regional integration on the economic growth of CEMAC countries and the study covered the period 1990-2014.The data are collected from secondary source and maybe bias.Economic integration has been assert to be a force that our economic growth and development. However, since the integration of CEMAC countries was adopted it difficult to deduce if this economic policy has benefited it members countries for more than two decade one has to ask what are the progress and challenge still exist till date. So this study will help evaluate the effect of economic integration on these countries’ GDP per capita and the long term economical growth of Central Africa countries, the Data were obtained from World Bank development indicator(WDI). Our dependent variable is GDP(Yt) growth(annual % growth, 1990-2014 for all CEMAC countries), Gross capital formation(Kt) is measured as the annual % growth capital for all CEMAC countries, Labor force participation rate(Lt) measured as of annual % of total population ages 15-64 for all CEMAC countries. Also, examine the relevant variables influencing the impact of the Regional Integration on gross domestic product(economic growth) in Central Africa, using both theoretical and empirical analytical frameworks; determine which explanatory variables are significant determinants of CEMAC economic growth, regional integration in CEMAC is a good thing or a necessary evil. Panel unit root were used to check the stability of the variable, the result showed that the variables were stationary at level, A panel econometric methodology were used to estimate the parameters, this gives us 144 observations, being at least 24 observation per country. The models are first estimated under the hypothesis of uniformity in behavior through time and countries. This implies that the coefficients of the models do not vary over time and across countries. We estimate the model using ordinary least squares(OLS) method considering that we have a homogenous panel or a model with common effects. All variables are stationary at level as depicted in both LLC and IPS test statistics, hence we can safely say the variables are integrated of order zero I(0) and also the variable involves are cointegrated with a probability values of less than 0.05 at 5 percent significant. Results reveal that increased labor and capital among the studied countries and creation of regional integrations have had long-term economic integration effects; and as time passes, various indexes especially economic growth indexes have had integration with each other in these countries. In the regression model, we found some positive effect of some variable such as labor and capital on economic growth as expected and 125 percent of change in economic growth is determined by these variables, variance homoscedasticity and normally distributed.On the contrary, we notice a negative impact between regional integration with the economic growth and statistically significant in spurring economic growth in the CEMAC region. The CEMAC economies share a lots of common challenges, both internal and external, such as almost all these countries produce basically the same product which is primary product hence these definitely lead to little trade or virtually no significant trade relationship among this countries hence the negative effect on economic growth is not a surprise, presently best near 5% of the total trade in the region. Another reason could be that the time period in which the regional integration is short to have significant and positive effect on the economies of the region. This is because it was just in the year 1999 that the CEMAC became to be. Over all, there is the absence of a well-developed road framework interfacing the Central African capitals and the primitive level about telecommunications base. The CEMAC economies are connected with France and presently China but not to each other. Also, the negative influence is likely because of low factor mobility "among the economies. Labor mobility between the CEMAC economies has been negligible for couple of transient specialists moving from the landlocked to the seaside economies despite compensation differentials. Capital mobility been restricted despite of the monetary union and BEAC. As a matter of fact, still nowadays due to the absence of a proper regional policy on banking system in CEMAC, it has been divided and fragile the regulatory framework and adequate standards of bank supervision. CEMAC is faced toward totally disparities between the richer seaside and the poorer landlocked economies. For example; Chad and Central African Republic are basically agricultural and subsistence-based economies with a little industrial sector. An enormous blending of low levels of infrastructure, feeble institutions, immature mankind’s resources, helter shelter dependence, poor climate, on elementary items and the absence of significant businesses place makes these economies among those poorest in the globe. The contention between Cameroon and Gabon negatively influence exertions at integration. The regulate courses of action of the fiscal union reflect the division of economic and political force power between the two nations. Central African economies face unfriendly neighborhood impacts starting with clashes clinched alongside neighboring nations. These spillovers can result in a less exchange flows(trade flow), expand the number of refugees, seizure of resources. At the end, some suggestions have been presented to improve the conditions of the studied countries. For instance(1) for fiscal and exchange rate management, theoretical work on currency unions has shown that successful ones require both fiscal coordination and a system of compensatory financing and transfer arrangements that could help offset income losses in countries due to exogenous shocks.(2) developed the infrastructure.(3) a proper customs regime.(4) CEMAC sort out trade relations with the European Union(5) Build up more regional projects,...