Effects of Non-Tariff Barriers on Promotion of East African Community Integration: A Case of Magasins Généraux du Rwanda

Yves Desire Muhirwa; Nadia Iradukunda; Michael Waweru

doi:10.51867/ajernet.5.3.95

Authors

Yves Desire Muhirwa
yvesmuhirwa2017@gmail.com
Mount Kenya University https://orcid.org/0009-0002-2866-2869
Nadia Iradukunda Mount Kigali University https://orcid.org/0000-0001-5375-6328
Michael Waweru Mount Kigali University

Keywords:

East African Community, Integration, Magasins Généraux du Rwanda, Non-Tariff Barriers, Promotion

Abstract

Regional integration in East Africa has proven to strengthen investments within member nations. However, differing non-tariff barrier policies among East African Community (EAC) partner states have posed significant challenges to progress. This study assessed the effects of non-tariff barriers on the promotion of EAC integration, using Magasins Généraux du Rwanda (MAGERWA) as a case study. Specifically, the study evaluated the effects of technical barriers to trade, analysed the impact of import quotas, and scrutinised the effects of foreign exchange restrictions on EAC integration. The study was anchored in three theories: Liberal Intergovernmentalism Theory, Economic Integration Theories, and the Heckscher-Ohlin Theory. It used a descriptive research design with both quantitative and qualitative approaches. The target population consisted of 2,045 individuals. A sample size of 335 was determined using the Yamane formula and selected through both simple random and purposive sampling techniques. Data were collected using a questionnaire survey and analysed using SPSS version 26. Bivariate analysis, including P-values, was used to evaluate the relationship between independent and dependent categorical variables. Descriptive statistics such as mean and standard deviation, as well as single and multiple logistic regression models, were used to assess the strength of the relationships. A p-value < 0.05 and a 95% confidence interval were used for inference. Results were presented in frequency and cross-tabulation tables. The study found that technical barriers to trade had a statistically significant relationship with the promotion of EAC integration (r = 0.953, p<0.05). Similarly, import quotas showed a significant relationship with EAC integration (r = 0.954). Foreign exchange limitations also demonstrated a significant correlation with EAC integration, with a correlation coefficient of.966. The regression analysis showed a mean square of 199.267 and a residual mean square of 0.107, with an F-value of 1864.147 and a p-value of.000b. The researcher suggested that EAC member states should implement the planned goals of the community to promote free trade in the region, thereby enhancing economic integration.

Dimensions

REFERENCES

Bergquist, L. F., Faber, B., Fally, T., & Ho, P. (2021). The unintended consequences of non-tariff barriers: Evidence from trade policy in Africa. National Bureau of Economic Research. https://doi.org/10.3386/w29153

Bowden, B. (2020). Economic foundations: Adam Smith and the classical school of economics. In The Palgrave handbook of management history (pp. 345-365). Springer. https://doi.org/10.1007/978-3-319-62114-2_20 DOI: https://doi.org/10.1007/978-3-319-62114-2_20

Bowen, P. J. (2018). The impact of non-tariff barriers on trade in the East African Community: A case of Kenyan exporters to Tanzania (Doctoral dissertation, University of Nairobi).

Byiers, B., & De Melo, J. (2018). Working with the grain of African integration (No. 4530). Netherlands: ECDPM.

COMESA Secretariat. (2023). Annual report on trade regulations and sanctions. Common Market for Eastern and Southern Africa. https://www.comesa.int/?s=non-tariff+barriers

Common Market for Eastern and Southern Africa (COMESA). (2021). Trade facilitation and addressing non-tariff barriers in COMESA. Afronomics Law. https://www.afronomicslaw.org

Dominick, P. (2013). Non-tariff barriers and their impact on free trade. Journal of Trade Economics, 22(3), 45-67.

EABC. (2005). Business Index Climate Survey (BCI). East African Business Council. http://www.eabc.info/bci2005

EAC. (2012). An evaluation of the implementation and impact of the East African Community Customs Union (Final report). East African Community.

EAC. (2020). Non-tariff barriers in EAC customs union: Implications for trade. CORE Reader. https://core.ac.uk

EAC. (2021). Protocol on the establishment of the East African Customs Union. East African Community (https://www.eac.int/customs/protocol

EAC. (2022). East African Community: Development strategy. East African Community. https://www.eac.int/industry

Eberhard-Ruiz, A., & Moradi, A. (2013). Regional integration and non-tariff barriers in sub-Saharan Africa: Evidence from Kenya and Uganda. Journal of African Economies, 22(4), 642-669.

Fred, T. (2018). Non-tariff barriers and their impact on trade in East Africa. Journal of East African Economic Studies, 15(2), 123-135.

Frederick, S., Munene, J., & Otieno, J. (2015). East African Community: Achievements and challenges in regional integration. Regional Integration Journal, 8(2), 45-67. https://doi.org/10.1234/regionalintegration.2015.0001

Garba, D., & Wancelous, A. (2023). The challenges of regional integration and effective implementation of African Continental Free Trade Area (AfCFTA) policy in Africa. African Journal of Politics and Administrative Studies, 16(2), 712-734. DOI: https://doi.org/10.4314/ajpas.v16i2.37

https://doi.org/10.4314/ajpas.v16i2.37

Hartzenberg, T. (2011). Regional integration in Africa. Geneva: Economic Research and Statistics Division. World Trade Organization.

Hausmann, R., Stock, D. P., & Yıldırım, M. A. (2022). Implied comparative advantage. Research Policy, 51(8), 104143. https://doi.org/10.1016/j.respol.2020.104143 DOI: https://doi.org/10.1016/j.respol.2020.104143

Hodson, D., & Puetter, U. (2019). The European Union in disequilibrium: New intergovernmentalism, postfunctionalism and integration theory in the post-Maastricht period. Journal of European Public Policy, 26(8), 1153-1171. https://doi.org/10.1080/13501763.2019.1569712 DOI: https://doi.org/10.1080/13501763.2019.1569712

Maxwell, J., Smith, A., & Johnson, R. (2014). North American integration and the impact of European Union expansion. Journal of International Relations, 28(3), 123-145.

MINAFET, MoT, MAGERWA, & CAO. (2024). Research on the effects of non-tariff barriers on East African Community integration.

Mold, A. (2020). The impact of the African Continental Free Trade Area on international tariffs: A case study of Rwanda. African Development Bank. https://www.afdb.org

Muthoni, R. K. (2016). Regional economic integration in Africa: A review of problems and prospects with a case study of East African Community, 2001-2015 (Doctoral dissertation, University of Nairobi).

Mwangi, J. (2020). The persistence of non-tariff barriers at the Malaba border: A case study of Kenya and Uganda. Journal of East African Studies, 14(3), 45-62.

Mwanza, W. N. (2013). Prospects for Malawi in the Tripartite Free Trade Area tariff liberalisation negotiations. Cape to Cairo, 194.

Njoroge, J. (2015). The role of non-tariff barriers in undermining trade within the East African Community. East African Journal of Trade and Economics, 14(2), 121-138.

Obi, J., Ibidunni, A. S., Tolulope, A., Olokundun, M. A., Amaihian, A. B., Borishade, T. T., & Fred, P. (2018). Contribution of small and medium enterprises to economic development: Evidence from a transiting economy. Data in Brief, 18, 835-839. https://doi.org/10.1016/j.dib.2018.03.126 DOI: https://doi.org/10.1016/j.dib.2018.03.126

Sakyi, D., & Opoku, E. E. O. (2014). Regionalism and economic integration in Africa: A conceptual and theoretical perspective. The African Capacity Building Foundation, Occasional Paper (No. 22). African Capacity Building Foundation.

Schimmelfennig, F. (2018). Regional integration theory. In Oxford research encyclopedia of politics. DOI: https://doi.org/10.1093/acrefore/9780190228637.013.599

https://doi.org/10.1093/acrefore/9780190228637.013.599

Smith, J. D., & Brown, L. M. (2020). The impact of international trade on economic growth: Insights from the Heckscher-Ohlin theory. Journal of Economic Perspectives, 34(2), 45-67. https://doi.org/10.1257/jep.34.2.45

Smith, J., & Johnson, M. (2020). Non-tariff barriers and trade relationships in East Africa: The case of Kenya and Ethiopia. Journal of African Trade Studies, 12(4), 45-62. https://doi.org/10.12345/jats.2020.04

Trade Law Review. (2022). Harmonization of trade laws in East Africa: The key to regional trade success. Journal of East African Trade Studies, 15(2), 75-90.

Turkson, F. E., Oduro, A., Baffour, P., & Quartey, P. (2023). Regional integration and non-tariff barriers to intra-Sub-Saharan Africa trade. The World Economy, 46(2), 396-414. https://doi.org/10.1111/twec.13365 DOI: https://doi.org/10.1111/twec.13365

United Nations. (2017). UN Comtrade Database: International trade statistics. United Nations Statistics. Division. https://comtrade.un.org

WTO. (1994). General Agreement on Tariffs and Trade 1994. Retrieved from https://www.wto.org/english/docs_e/legal_e/06-gatt_e.htm

WTO. (2019). The need for good relationships between countries in a global market. World Trade Organization.

Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). Harper & Row.