In what ways will West African countries benefit from economic integration?

Answer Details

Economic integration is an arrangement in which two or more countries agree to reduce or remove trade and other economic barriers among themselves and to cooperate economically, as in a free trade area, customs union, common market or economic community (for example ECOWAS in West Africa). Member countries can benefit in the following ways.

• Larger market: the combined market of member states is bigger, allowing firms to sell more and to produce on a large scale (economies of scale) at lower cost.
• Free movement of goods, labour and capital: removal of barriers lets goods, workers and capital move freely to where they are most needed and best rewarded.
• Increased trade among members: lower or zero tariffs encourage members to trade more with one another.
• Specialisation and better use of resources: each country can specialise in what it produces best, raising overall efficiency and output.
• Greater bargaining power: acting as a bloc, members can negotiate better terms with the rest of the world.
• Encouragement of industrialisation: the wider market and pooled resources make it worthwhile to set up large industries, sometimes jointly.
• Promotion of competition and lower prices: firms from different member states compete, improving quality and lowering prices for consumers.
• Transfer of technology and skills: cooperation spreads knowledge, technology and expertise among members.
• Joint infrastructure and projects: members can share the cost of large projects such as roads, power and communication links.
• Improved political relations and cooperation: closer economic ties promote peace, unity and cooperation among members.
• Employment opportunities: freer movement of labour and expanded industries create more jobs.

Through these gains, economic integration can raise output, incomes and living standards, and strengthen the members' position in the world economy.