The road to regional integration in Africa: Macroeconomic convergence and performance in COMESA

COMESA (Common Market for Eastern and Southern Africa) aims at establishing a currency union by 2025. To this end, a policy harmonisation programme and a set of convergence criteria have been set up. A number of projects to foster trade, economic and financial integration have also been launched. Using time-series and panel econometrics, this paper provides evidence on different dimensions of the integration process: macroeconomic policy convergence, shocks symmetry, per-capita income catching-up. Highlights are as follows. The monetary policy stance mildly converges across countries; fiscal stabilisation is however still problematic in several member states. Trade integration is low, but for a bulk of countries in the region there is evidence that shocks are somewhat symmetric. There is instead little evidence that per-capita incomes across countries are converging. In fact, some convergence to the bottom might be taking place among the poorest members.