Abstract

This research was mainly aimed at explaining the benefits of Cameroon as a member of CEMAC trading block. Before now its known that Cameroon is a member and founding fathers of CEMAC which is one of the most effective trade blocks in west Africa. This study began by explaining the relationship of Cameroon to CEMAC and its role played. Asia the research further went ahead to further explain on the benefit of Cameroon off CEMAC as a member’s state and lastly accounted for the challenges that Cameroon faces in CEMAC.

This study makes use of the theory of comparative advantage which provides a strong argument in favor of free trade and specialization among countries. comparative advantage, economic theory, first developed by 19th-century British economist David Ricardo, that attributed the cause and benefits of international trade to the differences in the relative opportunity costs of producing the same commodities among countries and Neo functionalism of Ernst Haas founded  in the mid-1950swhich downplays globalization and reintroduces territories into governance, This theory aimed at integrating various individual sectors in the hope of achieving spillover effects to further the process of integration.

Additionally, this research uses the Quantitative method of research and employs the survey research design. In this study the only closed ended questions were used to collect and gather the responses of the various participants. The main source of data in this Research were both primary gotten from questionnaires and secondary from reviewed literature key findings in this research reveal that Cameroon has a significant relationship with CEMAC is assumed a leadership position in CEMAC while for the second objective reveled that Cameroon makes a lot of benefits as a member of CEMAC however based on the last findings there are significant challenges that hinder the functioning of Cameroon in CEMAC which were examined in this

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to study

There is much support from African governments for regional integration. Indeed, since independence they have embraced regional integration as an important component of their development strategies and concluded a very large number of regional integration arrangements (RIAs), several of which have significant membership overlap(Ahokpossi.2012). There are however few success stories.

African RIAs are generally ambitious schemes with unrealistic time frames towards deeper integration1 and in some cases even political union. African2 RIAs are usually neighborhood arrangements (Allen, et all 2013) Traditionally, the CEMAC European Union was Africa’s most important trade, investment and development partner (Sevel.2001). Trade with the CEMAC was governed by a series of Lomé Conventions, which granted African countries (john.2012.) unilateral preferential access to CEMAC markets. The CEMAC and African countries concluded the Cotonou Agreement which paved the way for the negotiation of World Trade Organization (WTO) compatible Economic Partnership Agreements, in 2000 (Ahokpossi,2012).

Various configurations of African countries have constituted negotiating groups; many of which however cut across existing neighborhood regional integration arrangements, adding an additional layer of complexity to the regional integration process in Africa (AllenF,2014). The protracted and difficult EPA negotiations reflect to some extent the difference between the African paradigm of regional integration and the CEMAC’s model of regional trade agreements, but also the challenges of African regional integration.

The EPA negotiations revealed important gaps between political ambitions and economic reality in African regional integration. Debates about the African integration agenda and indeed Africa’s strategy for integration into the global economy are emerging from these negotiations, which are still ongoing. The African paradigm is that of linear market integration, following stepwise integration of goods, labor and capital markets, and eventually monetary and fiscal integration (ArcandJ,2012). The starting point is usually a free trade area, followed by a customs union, a common market, and then the integration of monetary and fiscal matters to establish an economic union. The achievement of a political union, features as the ultimate objective in many African RIAs.

This process isfollowed by the various regional economic communities (RECs) in Africa and at a Pan African level, eight of the RECs have been identified as the building blocks of the African Economic Community (Čihák,2012). It is accepted in this paper that regional integration makes sense for Africa; a continent characterized by small countries, small economies and small markets. What is at issue, however, is whether the linear model of regional integration currently, defining the African integration paradigm, makes sense for the continent(Makki, &Somwaru, 2004).

The geo-political configuration of Africa has been largely determined by the continent’s CEMA Cropean colonial powers, and as such has little to do with the emergence of nation states. . Small domestic markets and continental fragmentation translates into lack of scale economies in the production and distribution of goods and services (Čihák,2012). The immediate post-independence era was characterized by a strong commitment to economic planning, and since economic planning would be more feasible at a continental and, in an interim phase, at a regional level(Boyd et all, 2001). Underpinning this policy approach was the belief that development would be promoted by industrialization, in particular core manufacturing (Arcand ,2012).

The industrialization-regional integration interface was clear. Larger, protected markets in the various sub-regions would support a policy of import-substituting industrialization (Brown.2001). The aim was to establish a broad range of industries across different sectors. More recent experience indicates that political motivation for regional integration has also played an important role in African integration, and perhaps specifically in the overlapping membership of RIAs(Čihák.2012).

The ambition of African leaders to integrate Africa, and to develop the continent through import substitution industrialization, was a key feature of the immediate post-colonial period, and 5 provided the rationale for the Lagos Plan of Action (sileson.2014). The LPA was an initiative of the Organization of African Unity (OAU), adopted by Heads of State in April 1980, and keenly supported by the United Nations Economic Commission for Africa (ECA). A decade later in 1991 the Abuja Treaty provided strong support for the African integration agenda(Makki, &Somwaru, 2004).

This Treaty emphasized African solidarity, self-reliance and an endogenous development strategy, through industrialization(CEMAC.2004). The proposed framework for African integration and continental industrialization was the division of the continent into regional integration areas that would constitute a united African economy, the African Economic Community.

The Central African Economic and Monetary Community (CEMAC) were created in 1994 and became operational after the treaty’s ratification in 1999.The Central African Economic and Monetary Community (CEMAC) is made up of six States: Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo and Equatorial Guinea(Boyd et all, 2001). With a total population of about 37 million, it covers a total surface of around 3 million km2. Together with the larger Economic Community of Central African States (ECCAS) and the mainly inactive Economic Community of Great Lake Countries (CEPGL), CEMAC presents one of the Central African Regional Communities established to promote cooperation and exchange among its members.

The resumption of regional cooperation in Central Africa implied a general review of UDEAC’s agenda and objectives and adaptation to the regional and global context. It also included an institutional restructuring and the creation of new common bodies(Arcand.2007). In line with most other regional organizations on the African continent that followed the so called “second wave of regionalization” in the 1990’s, the newly restructured Central African Community was given a more open and democratic image(Boyd et all, 2001).

The creation of a common Court of Justice and a Parliamentary Assembly was supposed to give additional dynamic and transparency to the regionalization process (Lucas.2008). A major concern was to avoid new deadlocks and bottlenecks similar to those that had slowed or interrupted the previous regionalization efforts.Even though Cameroon is small on the world market, it constitutes about 50% of the size of the combined CEMAC market and thus possesses the power of regional markets under CEMAC tariff plan.

1.2 Statement of Problem

Less Well Understood Has Always Been The Question Of How Much Cameroon Is Making Out Of Cemac In Its Involvement As A Founding Member. Even Though With Uniform Cemac Policiespolices are evident in Cameroon such as free trade, freemovement  of good and persons  to an extend with a common currency, one could almost think all these CEMAC policies amount to benefiting Cameron enormously (Čihák,2012).

As a matter of fact  CEMAC greatly suffers from a lack of fiscal policy coordination and a huge absence of fiscal discipline enforcement which account of for a major reason for the instability of Cameroon financial markets. The lack of fiscal discipline stems from injudicious use of discretion in formulating and implementing budgetary policies(Boyd et all, 2001). These in turn lead to weak fiscal policies that can result to rising debt levels and over time a loss in policy credibility the resultant is a spill effect of these instabilities in the Cameroonian economy in addition to other issues such mass immigration from poorer countries and the inflation of labor markets whereas all these vices resulting from CEMAC are consequently doing more bad than the intended good(Makki, &Somwaru, 2004). With all these insecurities CEMAC greatly suffers a big of deal of internal instability to be of any significant impact to the Cameroon economy and most of the times present to be a burden to Cameroon. This leaves us with a problem at hand weather at all does Cameroon benefit from being a member of CEMAC

1.3 Research Questions

The research questions of this study are divided into main research questions and specific research questions

1.3.1 Main Research Question

What are benefits of Cameroon in CEMAC?

1.3.2 Specific Research Question

The specific questions which this research seeks to investigate are:

1. What is CEMAC and what’s the history of its relation to Cameroon?.
2. How does Cameroon benefit from being a member of CEMAC?
3. What are some of the challenges of Cameroon belonging to CEMAC?

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