Regional integration and industrialisation in the SADC: A comparative analysis of developing regions

Developing regions, including the Southern African Development Community (SADC), compete in the flow of trade and factors of production. Regional policy seeks to position the region to attract capital, skilled labour, and advanced technology to catalyse industrial productivity, innovation, and long-term economic growth. Increased regional integration and industrialisation can potentially increase intra-regional trade and enable economies of scale, technology acquisition, and capital formation. However, the competitiveness of the SADC is limited due to restricted diversification, barriers to trade, and reliance on primary activities and exports with price fluctuations and low-value addition. This chapter undertakes a comparative analysis of regional integration and industrialisation among the SADC and developing regions and delineates regional policy recommendations for enhancing the region’s competitive positioning. A quantitative research methodology is applied using secondary data to rank the SADC among nine other developing regions. The findings indicate that industrial exports, employment, value addition, and competitiveness are comparatively lower in the SADC. This is also the case with physical and non-physical infrastructure, while intra-regional trade and labour mobility are below the sample average. To increase the competitiveness of the SADC, regional policy ought to prioritise deeper economic and spatial integration, including trade liberalisation and improved quality of trade-facilitating infrastructure. This will strengthen resource-based industrialisation (RBI) through regional value chains (RVCs) that exploit the competitive advantages of member countries, while also increasing industrial value addition, labour productivity, and employment. Participation in global value chains (GVCs) may also be supported by strengthening external trade agreements and catalysing digital transformation in the region. Supranational institutions ought to be sufficiently capacitated to oversee the policy harmonisation process and coordination of regional policy interventions.