The impact of inter-state relations on the use of the PTA clearing house

Abstract

African integration systems are aimed at promoting economic development through both political and economic means by bringing together of hitherto autonomous regions or countries into an integrated whole. Usually such systems are perceived purely in economic terms and therefore economic concepts are used to interpret and regulate interstate trends. The reality, however, is that politics plays a bigger role in the central mechanism, direct ion and existence of such economic integration systems. This also is the case in the Preferential Trade Area for Eastern and Southern African States (PTA) and particularly the creation, operation and expansion of the Clearing House which is an integral part of the PTA. This study looks at PTA with a central focus on the Clearing House, which is viewed as the most important organ of the institution. The development of the Clearing House is affected by monetary co-operation in the region.The increased or decrease use of the unit of account of the PTA, is vital variable that is discussed in the study. The development of the clearing House is also affected by the rules of origin and the common-list both of which were initially introduced with an aim to promote the region co-operation. They, however, affect the institution negatively and have therefore reduced the utilization of the Clearing House