Abstract
Despite progress towards improved cooperation within the Southern African Customs Union (SACU), it can be argued that real economic integration is still lacking. Cross-border value chain (VC) development has been proposed as a potential enabler of regional economic integration. This article draws on a systems thinking process to explore the dynamic process of regional economic integration and value chain development. Through an inductive approach, we consider pathways for value chain development using the agro-processing and automotive sectors within SACU as case studies. The outcome of the dynamic hypothesis is to inform a framework for strategic decision-making to support policy action towards developing cross-border value chains in SACU.
Highlights
AND PROBLEM STATEMENT many African leaders called for regional economic integration in Sub-Saharan Africa soon after independence, it was only in the 1970s and 1980s that economic integration institutions were established
This article considers the case of the Southern African Customs Union2, as an example of challenges for economic integration to deliver on its promises
We draw on two case studies, on which we base the development of a dynamic hypothesis and — based on this analysis and through an inductive approach — we present a framework for a system of indicators that need to be considered in a policy framework
Summary
AND PROBLEM STATEMENT many African leaders called for regional economic integration in Sub-Saharan Africa soon after independence, it was only in the 1970s and 1980s that economic integration institutions were established. With political unity as the impetus for achieving market integration in order to reach economies of scale, this process could be characterised as being mostly inwardly-focused. It failed because of, inter alia, small and poor domestic markets, high input costs, protectionist trade policies, broken regional commitments, and excessive emphasis on joint public investments [1], [2]1. A World Bank study conducted in 2011 found that the major pillars of successful economic integration remain an efficient transport and logistics system, easy trade across borders, and the strength of regional value chains. A number of key barriers were identified [3] : a. Non-tariff barriers (NTBs) such as import bans, permits, and licensing
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