Problems affecting Regional Trading blocs

Problems affecting Regional Trading blocs

  • The civil wars taking place in some countries causes insecurity which affects trade between countries.
  • Political differences among the leaders of the member states affect cooperation among member states.

  • The member states are not at the level of industrialization, making some countries to rely on those that are more industrialized. E.g Kenya, Egypt, South Africa and Nigeria are more relied on by other African Nations.
  • Some countries produce similar goods making the volume of trade to be low and less rewarding.
  • Free trade affects local industries, as the imported goods without tax are usually cheaper than locally produced goods. This is what is ailing the sugar industry in Kenya
  • Free trade denies the importing countries the revenue they would earn from taxing imported goods.
  • Poor transport and communication linkage between members states limit inflow of goods and services
  • Some member countries do not remit their annual subscription which affects the operation of the organizations.

  • The flow of goods and services between the states is still low because of poverty among majority of the people in the regions.
  • Some people in the countries do not believe that goods made in the neighbourhood are of good quality. This reduces the demand for goods in the regions.


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