Regional Economic Integration and Incomes Convergence: A Case Study of the Economic Community of West African States

Abstract

With a view to taking advantage of the region’s economic potentials,  a group of  15  West African countries signed  a treaty  in  Lagos, Nigeria on 28^th May , 1975,  leading to the establishment of the Economic Community of West African States ( ECOWAS ). The principal objective was to promote co-operation and integration in economic, political social and cultural activities in the fifteen West African States. This study, therefore, aim at assessing the extent to which regional integration in West Africa has promoted incomes convergence in the region. The study utilizes two approaches of measuring incomes convergence, namely, sigma and conditional Beta Convergence.  The results from the sigma convergence regression indicate no convergence in income per capita but rather growth in income per capita amongst ECOWAS member states. This is because; the coefficient of the trend variable is positive and significantly different from zero. From the Conditional Beta Convergence regression, the results show that the speed of incomes convergence for  ECOWAS member states is approximately 17% per annum, implying that any short-run shock that puts the economies of the sub-region into disequilibrium may take a longer period to attain the steady state . This thus calls for further action in accelerating the pace with which member states meet the ECOWAS convergence criteria .

Keywords: regional integration,  incomes, convergence , West Africa, economies, criteria