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Regional Integration Can Boost Job Creation and Foster Economic Growth
Accelerated regional integration can generate greater benefits including job creation given the high unemployment levels and the youthful demographic profile of the East African region, experts have said.
During a seminar on regional integration organized by the African Economic Research Consortium (AERC) and Citi Bank at the ongoing Annual Meetings of the African Development Bank (AfDB) on 29 May in Arusha, the experts argued that successful regional integration is dependent on a systematic and progressive integration focusing on few drivers for faster economic growth.
“The EAC common market will affect or shift the process of job creation, labour mobility and returns. New types of employment or job categories will emerge,” said Dr Semboja Haji Hatibu Haji from University of Dar es salaam.
He added that youth is the largest social dynamic group and potential victim of regional integration.
“It can easily move from one country to another searching for decent social economic life or join hardline militant youth movement.
This is a social and political time bomb. Care must be taken to avoid spread of Al Shabaab and political chaos,” Dr Hatibu cautioned.
Experts also noted that labour mobility and wage flexibility during the EAC-CM environment may be a cure for regional employment, labour market and wage imbalances.
That is, common market may lead to convergence of level of wage employment in the integrated regional labour market.
However, there are also views that if appropriate policies, laws and regulations are not going to be addressed, the regional labour migration may cause further divergence between advanced economies.
“There is a big variation in terms of growth rates, with Burundi recording the lowest rate in 2010 at 3.9 per cent arising from political uncertainty; and Tanzania being categorized as the fastest growing non-oil economy ….this implies that the factors influencing economic growth in East Africa are either exogenous to regional integration or the contribution of regional integration to economic growth is marginal ,” said Uledi A Mussa, the Deputy Permanent Secretary in the Tanzanian Ministry of East African Cooperation.
He added, “This is an indication that the EAC is not pursuing better regional integration/ functional regional integration.”
For EAC to accelerate economic growth and job creation, experts argued that EAC has to implement a functional regional integration focusing on economic growth and development.
Currently, the experts noted that EAC lacks reliable data on employment though there are efforts to address the issue with the ongoing manpower survey.
“Lack of reliable data on employment is one of the biggest challenges in addressing unemployment in the region,” Mr Mussa said.
According to the State of East Africa 2010 report, published by the Society for International Development (SID), in 2010 Tanzania had the highest labour force participation at 89 per cent followed by Rwanda 86 per cent, Burundi 83 per cent, Uganda at 78 per cent and Kenya, the lowest rate at 66 per cent.
Experts also argued that regional integration is yet to unlock sufficient job opportunities as growth in some countries in the region has mainly been driven by mineral exploitation which is capital intensive.
“For us to open more job opportunities there is need for more investment in Agriculture as the majority of the citizens in these countries still depend on the sector,” said William Lyakurwa, the Executive Director of AERC.
He added that regional integration is a pre-condition for economic growth.
“Given that regional integration is necessary for growth – it can increase job creation through competition.”
AERC-CITI Bank Symposium was organized under the theme: Regional Integration Unlocking Opportunities for Job Creation and Greater Economic Growth.