Abstract
There is a renewed interest in the debate on integration in Africa since the creation of the Africa Union in 2002. This study investigates the feasibility of a full-fledge union in Africa from an economic standpoint. Towards this goal, we examine both the contemporaneous and dynamic relations in the short- and long-run among six key macro variables--consumer price level, gross domestic product, consumption, investment, trade flows and government expenditures--in eight African countries. In the quarterly data from 1976 to 2005, we observe the existence of common trends in real output, price level, private consumption, government consumption, investment and trade flows among these eight countries. In addition, we also note that there exist common cycles in real output, investment and trade flows for these countries. These two critical findings indicate the existence of some macroeconomic interdependence among these countries. Thus, the chances for success of integration in Africa driven by these eight countries are appreciable.