This study aimed to assess the relationship between East Africa Community (EAC) integration and the welfare of Rwandan cement traders. Specifically, the study sought to: 1) Determine the optimal price and quantity of cement in Rwanda; 2) Assess approaches used by EAC members to achieve regional trade goals; and 3) Establish the correlation between regional trade integration and the welfare of Rwandan traders using cement price and demand data. The researcher found a positive low relationship between EAC integration and Rwandan trader welfare. Additionally, the optimal price of cement in Rwanda was determined to be $199.12 per ton based on regression analysis. The findings provide insight for Rwandan traders, the Rwandan

1. i
EAST AFRICA COMMUNITY INTEGRATION AND RWANDA
TRADERS’ WELFARE
A CASE STUDY OF RWANDA CEMENT TRADERS
HABIMANA THEOGENE
MBA /3619/12
A Research Project Submitted in Partial Fulfillment for the Degree in
Master of Business Administration (Finance and Accounting option) of
Mount Kenya University
OCTOBER 2014

2. ii
DECLARATION
This thesis is my original work and has not been presented for a degree in any other
University or for any other award
Students Name: HABIMANA THEOGENE
Sign ____________________ Date _____________
I confirm that the work reported in this thesis was carried out by the candidate under my
supervision
Name:Dr NYAMBANE DAVID
Sign ____________________ Date _____________

3. iii
DEDICATION
This work is dedicated to my parents; RUTAGANDA Evariste and MUKARUBAYIJA
Eugenie. Who have supported me both morally and materially.

4. iv
ACKNOWLEDGEMENTS
With all my enthusiasm, my heartily felt gratitude goes to my parents Mr. and Mrs.
Evariste RUTAGANDA for their love, financial and moral support they have always
given me.
I further thank my best friends Mr. HATEGEKIMANA Emmanuel Thierry and Mr.
NDORIMANA Celestin for their continuous financial support in my education during
this program, that enabled me to accomplish one of my educational goals.
I cannot forget to thank my supervisor Dr. NYAMBANE David who provided me with
invaluable guidance, commitment and encouragement throughout the writing of this
research project.
I cannot forget to thank my brothers and sisters; TWAGIRIMANA Jean De Dieu,
MUKANDAYISENGA Olive, HABINEZA Jackson, HABINSHUTI Jean Paul,
NSANZUMUHIRE Fidele, MUKANEZA Honorine, UWINEZA, MUHAWENINEZA
and UWITUZE; for their constant love and prayers that have always encouraged me.
Last but not least, I thank all my friends, classmates and colleagues who used to visit me
in my different harmful events, for the constant encouragement and prayers that enabled
to successfully finish my studies through hardworking.

5. v
ABSTRACT
Every state in Africa is at least a member of one community, but the contribution of their
integration to the welfare is not weighty. This research assessed the contribution of EAC
to Rwanda traders „welfare and was carried out in Rwandan cement traders, due to the
highest cost of cement in the EAC region (US$300/ ton); the main objective of this
research was to assess relationship between East Africa Community integration and
Rwanda traders‟ welfare. The specific objectives were to optimize the different factors
facilitate region members in trading on the basis of optimal price and quantity demand of
cement, to assess the different approaches used by region members to achieve their goals
regarding trading and then, to establish the correlation of regional trade integration and
Rwanda traders‟ welfare using price of cement in Rwanda and aggregate quantity demand
of cement in the regional members. The findings of this study is important for different
users especially Rwanda traders‟. This researcher focused on the period scope of 2001 to
2013.The researcher reviewed literature related to regional integration, welfare and the
contribution of regional integration to trade in the region, whereby the study focused on
East Africa community. The critical review of existing literature to identify the gap that
was bridged by the research was also done. The conceptual; framework showing the
relationship between dependent and independent variables was presented together with
the factors that intervene from the environment. The research designed that, the
researcher used both descriptive statistics, correlation and regression model, where
analytical based on qualitative and quantitative data. Expert judgment was used to
determine the validity while Cranach alpha coefficient (0.862) was used to determine
reliability of research instruments. Qualitative, quantitative data using linear regression
analysis were employed. The total population was 418 people from MINEAC and
Rwanda cement traders with the selected sample size of 81 obtained using Morgan‟s
sampling formula with 90% confidence interval and 10% error of precision. The
researcher collected data using questionnaires and unstructured interviews for primary
data and documentary review for secondary data. The collected data were presented using
tables, figures and equations, while statistical methods were used to ascertain the
percentages and frequencies upon which analysis and interpretation were based. The
researcher found positive and low relationship (r = 0.402) between EAC integration and
Rwandan traders‟ welfare using primary data. The researcher suggested the optimal price
of cement in Rwanda using regression model, where he found that optimal price of
cement should be US$199.12 per ton. This research also recommended Rwandan cement
traders, Government of Rwanda, EAC members and other researchers.

6. vi
TABLE OF CONTENTS
DECLARATION................................................................................................................ii
DEDICATION...................................................................................................................iii
ACKNOWLEDGEMENTS .............................................................................................iv
ABSTRACT........................................................................................................................v
TABLE OF CONTENTS .................................................................................................vi
LIST OF TABLES.............................................................................................................x
LIST OF FIGURES .........................................................................................................xii
LIST OF ACRONYMS AND ABBRREVIATIONS ...................................................xiii
DEFINITIONS OF KEY TERMS..................................................................................xv
CHAPTER ONE: INTRODUCTION..............................................................................1
1.0. Introduction...................................................................................................................1
1.1. Background of the study...............................................................................................1
1.2. Problem Statement........................................................................................................3
1.3. Objectives of the study..................................................................................................4
1.3.1. General objective of the study ...................................................................................5
1.3.2. Specific objectives of the study .................................................................................5
1.4. Research questions........................................................................................................5
1.5. Significance of the study...............................................................................................5
1.6 Limitations of the study .................................................................................................6
1.7 Scope of the study..........................................................................................................7

7. vii
1.7.1 Content scope..............................................................................................................7
1.7.2 Geographical scope.....................................................................................................7
1.7.3 Time scope..................................................................................................................7
1.8 Organization of the study...............................................................................................7
CHAPTER TWO: REVIEW OF RELATED LITERATURE......................................9
2.0. Introduction...................................................................................................................9
2.1. Theoretical literature.....................................................................................................9
2.1.1 Overview of regional integration................................................................................9
2.1.2. Factors facilitating region members in trading ........................................................10
2.1.3 Approaches for effective regional integration ..........................................................12
2.1.4 The importance of regional integration in Africa .....................................................15
2.1.5 Overview of welfare .................................................................................................15
2.2. Empirical literature .....................................................................................................17
2.3. Critical review and research gap identification ..........................................................18
2.4. Theoretical framework................................................................................................21
2.5 Conceptual framework.................................................................................................22
2.6. Summary.....................................................................................................................24
CHAPTER THREE: RESEARCH METHODOLOGY ..............................................25
3.0 Introduction..................................................................................................................25
3.1 Research design ...........................................................................................................25
3.2Target population..........................................................................................................26

8. viii
3.3 Sample design ..............................................................................................................26
3.3.1 Sample size determination........................................................................................27
3.3.2 Sampling technique...................................................................................................27
3.4. Data collection methods..............................................................................................28
3.4.1 Data collection instruments.......................................................................................28
3.4.2 Administration of data collection instruments..........................................................29
3.4.3 Reliability and Validity.............................................................................................29
3.5. Data analysis procedures.............................................................................................30
3.5.1 Processing of data .....................................................................................................30
3.6 Ethical Consideration...................................................................................................32
CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSION..............................33
4.0 Introduction..................................................................................................................33
4.1 Demographic characteristics of respondents ...............................................................33
4.2 Presentation of findings ...............................................................................................35
4.2.1 Factors facilitate region members in trading ............................................................35
4.2.2. Approaches used by EAC members in trade ...........................................................39
4.2.3 Correlation of EAC integration and traders‟ welfare................................................42
4.2.4 Perception on EAC integration on traders‟ welfare..................................................44
4.2.5 Analysis and presentation of secondary data............................................................46
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMANDATIONS...51
5.0 Introduction..................................................................................................................52

9. ix
5.1. Summary of findings...................................................................................................52
5.1.1. Factors facilitate EAC members in regional trade...................................................52
5.1.2 Approaches used by region members in trade ..........................................................53
5.1.3 Relationship between EAC and welfare of traders...............................................54
5.2. Conclusion ..................................................................................................................55
5.3. Recommendations.......................................................................................................56
5.3.1 Rwandan traders........................................................................................................56
5.3.2 Government of Rwanda............................................................................................56
5.3.3 EAC members...........................................................................................................57
5.4. Suggestions for further study......................................................................................57
REFERENCES.................................................................................................................58
APPENDICES..................................................................................................................62

10. x
LIST OF TABLES
Table 3.1: Target population..............................................................................................26
Table 4.2: Purposive sampling technique ..........................................................................27
Table 4.3: Distribution of respondents by gender..............................................................33
Table 4.4: Distribution of respondents by Level of education...........................................34
Table 4.5: Distribution of respondents by Experience in EAC cement trade..................34
Table 4.6: Views of respondents on Elimination of Non-tariff barriers...........................35
Table 4.7: Views of respondents on exchange rate............................................................36
Table 4.8: Views of respondents on Free-trade area..........................................................36
Table 4.9: Views of respondents on Customs Union.........................................................37
Table 4.10: Views of respondents on Literacy .................................................................38
Table 4.11: Views of respondents on Culture...................................................................38
Table 4.12: Views of respondents on Different Production cost of cement ......................39
Table 4.13 Views of respondents on Security community ................................................40
Table 4.14: Views of respondents on free movement of goods and people ......................40
Table 4.15: Views of respondents on Building quality infrastructure...............................41
Table 4.16: Views of respondents on Remove road-blocks ..............................................41
Table 4.17: Views of respondents on Mobilization...........................................................42
Table 4.18: Correlation between EAC integration and Rwanda traders‟ welfare .............43

11. xi
Table 4.19: Perception on benefits Rwanda country targets from EAC members ...........44
Table 4.20: Perception on EAC and the price of cement in Rwanda ................................45
Table 4.21: Perception on EAC and the quantity of cement needed in Rwanda...............45
Table 4.22: Perception of respondents on being an EAC‟ citizen ....................................46
Table 4.23: Supply cost, demand price and quantity demand of cement ..........................47
Table 4. 24: Coefficients used to predict quantity of cement and ASCC in the region....50
Table 4.25: Coefficients used to predict quantity of cement and DPC in Rwanda ..........50
Table 26: Data used to establish linear regression models ................................................66
Table 27: Test of normality................................................................................................66

12. xii
LIST OF FIGURES
Figure 2.1:Link between EAC and welfare of Rwanda traders.........................................23
Figure 4.2: Test of normality of quantity of cement from EAC ........................................48
Figure 4.3: Test of normality of demand price of cement in EAC ....................................49

13. xiii
LIST OF ACRONYMS AND ABBRREVIATIONS
ADPC: Aggregate Demand Price of Cement
APECA: Asia-Pacific Economic Cooperation
AQDC: Aggregate of Quantity Demand of cement
ASCC: Aggregate Supply Cost of Cement
CEMAC: Central African Monetary and Economic Community
CEPGL: The Economic Community of the Great Lakes States
CIMERWA: Cimenterie due Rwanda
COMESA: Common Market for Eastern and Southern Africa
CUTEG: Currency Union Technical Expert Group
Df: Degree of freedom
EAC: East African Community
ECCAS: Economic Community of Central African States
ECOWAS: Economic Community of West African States
EcUn: Economic Union
ERSD: Economic Research and Statistics Division
EU: European Union
GP: Gross Profit
IGAD: Inter-Governmental Authority on Development

14. xiv
IMF: International Monetary fund
IOC: Indian Ocean Commission
MINICOM: Ministry of commerce
MRU: Mano River Union
NAFTA: North American Free Trade Agreement
NP: Net Profit
NTBs: Non-Tariff Barriers
OECD: Organization for Economic Co-operation and Development
RCT: Rwanda Cement Traders
RECs: Regional economic communities
RI: Regional Integration
SACU: Southern African Customs Union
SPSS: Statistical Packaging for Social Science
SADC: Southern African Development Community
TRIP: Trade-Related Aspects of Intellectual Property
UEMOA: West African Economic and Monetary Union
UMA: Arab Maghreb Union
WITS: World Integrated Trade Solution
WTO: World trade organization

15. xv
DEFINITIONS OF KEY TERMS
Regional integration: Regional integration (RI) is a worldwide phenomenon of territorial
systems that increase the interactions between their components and create new forms of
organization.
East Africa Community: The East African Community (EAC) is a regional inter-
governmental organization established under Article 2 of the Agreement for the
Establishment of the East African Community that entered into force in July 2000.
Membership of the Community comprises the Republics of Burundi, Kenya, Rwanda,
Uganda and the United Republic of Tanzania.
Trade: Trade refers to buying and selling of goods and services for money or money's worth.
It involves transfer or exchange of goods and services for money or money's worth.
Welfare: Welfare means the availability of resources and presence of conditions required
for reasonably comfortable, healthy, and secure living

16. 1
CHAPTER ONE: INTRODUCTION
1.0. Introduction
This chapter focuses to the background, and the statement of the problem .It also
comprises the objectives of the study, research questions, significance of the study, and
expected contribution to knowledge of the study. The chapter also highlights the scope
and limitation of the study. This study analyzed the influence of East Africa Community
on the welfare of Rwanda traders‟; a Case of study of Rwanda cements traders.
1.1. Background of the study
The idea of region integration and international trade is not new; Napoleon said this
before in 1870(Edward &Milner, 2002). The regional integration among different nations
involving the exchange of goods and services, that is, exports and imports. The guiding
principle of international trade is comparative advantage, which indicates that every
country, no matter their level of development, can find something that it can produce
cheaper than another country (Beghin& Bureau , 2001).
Some observers fear that regional economic institutions ; such as the European Union
(EU), the North American Free Trade Agreement (NAFT A), and the organization of
Asia-Pacific Economic Cooperation (APEC), reduce the multilateral system that has
guided economic relations since the end of World War II, promoting protectionism and
conflict. Others argue that regional institutions raise economic openness and reinforce the
multilateral system (Edward & Milner, 2002). Countries go an extra mile and agree to a
kind of trade allows for a greater competition and more competitive pricing in the market.
As it is the case for the East Africa Community (EAC).Regional trade arrangements have
become a popular vehicle for the promotion of trade and growth. This is particularly so in

17. 2
Africa where a number of over lapping arrangements have come into existence(Sangeeta
et al., 2007).
Regional integration arrangements (RIAs) constitute an increasingly significant feature of
the world trade system. Africa and East Africa in particular is not an exception to this
phenomenon. A modern concept of using market integration in East Africa Community
has already started; the Vision of EAC is to attain a prosperous, competitive, secure and
politically united East Africa. The Mission is to widen and deepen economic, political,
social and cultural integration in order to improve the quality of life of the people of East
Africa through increased competitiveness, value added production, enhanced trade and
investment(Engel & Rogers, 1996). The Brand of the East African Community is „„One
People, One Destiny‟(East Africa Community [EAC], 2011).
East Africa Community was established in 1919 but it ceased to function in the
1970s(EAC, 2006). The treaty establishing the current EAC was signed on 30 November
1999 and came into force on 7 July 2001 upon its ratification by the Republics of Kenya,
Tanzania and Uganda (E A C, 2001). By studying the effects of regional integration that
occurred in the past, besides social effects, regional integration can be argued to play a
key role in completing the single market; and as such can be expected to boost trade
among monetary union member states (Font et al., 2010).
The economic effects of counties unions attract much attention of international trade. In
particular, the effect of countries unions on international trade becomes a central area of
research. Regional integration implies more than an elimination of exchange rate
volatility among its members if those countries use single currency payment. It also
reduces transaction costs relevant to trade and tourism dealings and provides a
commitment device for macroeconomic policies (Santana et al., 2009).

18. 3
Although the concept of regional integration has been developed previously ,and some
studies have found that natural resources, laws of society or different cultures, language
barrier, and the last but not the least lack of single currency payment in regional trade is
one of variables which influence relationship between regional integration and
international trade(Edward, 2010).
The goal of a regional integration of East African Community has long been a pillar of
African unity, a symbol of the strength that its benefactors hope emerge from efforts to
integrate the continent(EAC, 2011).Kigali is expected to double the number of houses
available, an additional 344,000 apartment units were required by 2020,Population is
expected to approach nearly 2 million by 2020,28% of population are expected to be
apartments and then 200,000 tons of cement is required(Rwanda development [RDB],
2013). And then, (Ministry of commerce [MINICOM], 2013)reported that 40 per cent of
the overall market is controlled by the sole local manufacturer,Cimenterie due Rwanda
(CIMERWA).Cement prices are presently pushing US$300/t, and The Rwandan
economy grew by 6.8 per cent in 2012/13 with more foreign aid going into
infrastructure, therefore increasing cement demand to 100-150 per cent above that of the
overall economic growth. However, lack of adequate domestic supply and affordable
price make Rwanda vulnerable to aggressively looking importers(MINICOM,
2013).From this background, the research had intention to carry out the research on EAC
integration and Rwandan traders‟ welfare on the case of Rwanda cement traders.
1.2. Problem Statement
Every state in Africa is at least a member of one community; on the case of Rwanda;
Rwanda is a member of three key regional integration arrangements: the EAC, Common
Market for Eastern and Southern Africa (COMESA),and The Economic Community of
the Great Lakes States(CEPGL).It is also dealing with a tripartite agreement between

19. 4
EAC, COMESA and the Southern African Development Community (SADC), is a
member of the African Union and has international trade agreements such as those with
the EU and USA (MINICOM, 2013). Although, Rwanda is a member of several different
states, It is reported that 40 per cent of the overall market of cement is controlled by the
sole local manufacturer, CIMERWA and cement prices are presently pushing US$ 300
per ton, this price is still higher than the price in the region of EAC, whereby the
Rwandan economy grew by 6.8 per cent with more foreign aid going into
infrastructure, therefore increasing cement demand to 100-150 per cent above that of the
overall economic growth (MINICOM, 2013). However, lack of adequate domestic
supply and optimal price of cement makes Rwanda vulnerable to aggressively looking
importers. The above problems and concepts indicate East Africa Community like
dreamers, whereby, Rwandan market like the trade integration of East Africa Community
spend huge amounts of money in their commitments to the community , although today
there is no country in Africa that is not a member of at least one regional economic group
whereas, implementation issues cover both the economic, political and institutional
constraints that surface at the implementation stage of regional integration treaties, that is
the same case to Rwanda country regrettably. Thus, there is some study in Rwanda has
carried out on trade effect of Rwanda to become East Africa community ( EAC ) member,
but they did not focus on plan implementation especially welfare of traders. It is against
that background that the researcher carried out this research with reference to Rwandan
Cements Traders (RCT) using regression analysis and Pearson correlation coefficient.
1.3. Objectives of the study
This is subsection focuses on the research objectives, such as general objective and three
specific objectives.

20. 5
1.3.1. General objective of the study
The most important aim of the study is to determine the correlation between regional
integration of East Africa Community and Rwanda citizens wealth as a member of East
Africa Community (EAC).
1.3.2. Specific objectives of the study
(i) To assess the factors that influencing the practice of trade integration in EAC
members;
(ii) To assess the different approaches used by region members to achieve their goals;
(iii)To determine relationship between regional trade integration and welfare of Rwandan
cements‟ traders.
1.4. Research questions
To achieve the objectives stated above, the following study questions were posed:
(i) What are the factors that influencing the practice of trade integration in EAC
members?
(ii) What are the approaches used by East Africa Community to achieve their goals?
(iii)Does East Africa Community trade integration have an effect on Rwandan cement‟s
trader‟s welfare?
1.5. Significance of the study
This study benefited the researcher, future researchers, Mount Kenya University, Rwanda
Cement Traders Association, the government of Rwanda and the general public in
different ways.
The researcher was able to fulfill partial requirements of completing a Master‟s degree in
Business Management- finance and accounting option, since it is a university
requirement. The researcher was further able to improve or increase his understanding

21. 6
and skills in the field of regional integration especially in the integration of East Africa
Community.
The research was also put in the university library to increase the availability of literature
on regional integration. Future researcher in the field related to regional integration will
use this research when looking for secondary data and the basic guidelines of writing
research reports.
Rwandan Cement Traders uses this research when identifying how far it has gone in the
field of region integration and improving its profitability and competitiveness in the
regional cement industry. This may help the cement dealers to make relevant policies
related to profitability in regional integration. Other traders in Rwanda and beyond may
also use this research to learn about the possible ways they can improve their profit by
taking lessons and examples from Rwandan Cement Traders.
The government of the Republic of Rwanda uses this research to identify the ways
through which Rwandan traders get profit from East Africa Community. The general
public may also use the model established by this research in acquiring knowledge of how
they can make their business more profitable in the region. This mainly applies to the
future investors who wish to start their business in the EAC members.
1.6Limitations of the study
During this research, the researcher met the following challenges. Respondents were
doubtful of researchers who may be carrying out commercial research under the cover of
academic research. However, the researcher convinced respondents beyond doubt that the
research is purely academic until they give the required data.

22. 7
1.7 Scope of the study
In order to ensure that the research remains focused on its original purpose, it was divided
into content, geography and time.
1.7.1 Content scope
The research focused on EAC regional integration and Rwandan citizens‟ wealth. The
researcher focused in this field because, he recognized that sometimes those people with
low income do not benefit regional integration.
1.7.2 Geographical scope
The research was carried out for Rwandan Cements Traders association, located in Kigali
City, Northern Province, western province, Eastern province and Southern province and
Ministry of East Africa Community (MINEAC) located in Kigali City-Gasabo-
Kimihurura near Rwanda Revenue Authority. This study choose cements traders in
Rwanda because, It is reported that 40 per cent of the overall market is controlled by the
sole local manufacturer, Cimenterie due Rwanda (CIMERWA).
1.7.3 Time scope
The research covered the period between 2001 and 2013. This helped to ensure that
research is specific to determine period of time. The researcher has chosen this time scope
because the entrance of Rwanda in East Africa Community happened 2007 and then he
needs to know how the price of cement in Rwanda is before and after the entrance of
Rwanda in EAC.
1.8 Organization of the study
The first chapter gives the general introduction including background of the study,
statement of the problem, research objectives, research questions, significance of the
study, limitations of the study, scope of the study and next organization of the study. The
second chapter gives the review of the related literature where a critical search of what

23. 8
other researchers has said about financial integration and some international trade
terminology. Chapter three was a narration of the research methodology and methods
adopted for this study. It highlights the research paradigms, methodology, methods, study
population, Sample size selection, data collection and data analysis. Chapter four
analyzed and presented the study findings. It attempts to summarize the views from the
questionnaires; interview guides and documentary review interpret them and then present
them as findings of the research. Chapter five was a summary, recommendation and
discussion of results. It further puts the conclusions and recommendations straight. The
last section for chapter five highlights the implications of the study. The research at the
end attached references and appendices used in undertaking this study.

24. 9
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0. Introduction
The effective research cannot be accomplished without critically studying what already
exists in the form of general literature and specific studies. Therefore, it is considered as
an important pre-requisite for actual planning and execution of research project. This
helps to formulate hypotheses and framework for further investigation. This subdivision
clearly focuses on to the review of the available literature related to the role of regional
integration on welfare promotion, it also contains some key definitions in order to well
understand and be familiar with regional integration and the traders‟ welfare. This section
focuses to the review of past studies and critical review .It also comprises gaps to be filled
by the study. And then, it concludes with the summary of literature review.
2.1. Theoretical literature
In this sub-section the researcher focuses on different Philosophy, techniques and factors
familiar with regional integration and traders‟ welfare.
2.1.1 Overview of regional integration
Regional integration (RI) is a worldwide phenomenon of territorial systems that increase
the interactions between their components and create new forms of organization
(Philippe, Giulia and Chatrini, 2008).Griswold (2005)defined integration as a process
leading to the creation of security communities.
Hass (1970) defined integration as the process whereby political actors in several distinct
national settings are persuaded to shift their loyalties, expectations and political activities
toward a new center, whose institutions possess or demand jurisdiction over preexisting
national states. He shared his view on nature of integration with other major integration

25. 10
theorists of the time, such as Leon Lindberg and Karl Deutsch. International trade is
defined as the exchange of goods or services along international borders. This type of
trade allows for a greater competition and more competitive pricing in the market. The
economic interaction among different nations involving the exchange of goods and
services, that is, exports and imports (Elliott &Hanna, 1996). The guiding principle of
international trade is comparative advantage, which indicates that every country, no
matter their level of development, can find something that it can produce cheaper than
another country(Baldwin, 1976).
It is difficult to define the meaning of integration in general terms, thus researcher defines
regional integration as an arrangement for enhancing cooperation through regional rules
and institutions entered into by states of the same region whereby regional integration
could have as its objective political or economic goals or in some cases, a business
initiative aimed at broader security and commercial purposes. Regional integration could
have an intergovernmental or multinational organization.
2.1.2. Factors facilitating region members in trading
Economic integration occurs when barriers to commercial exchange across countries are
removed. Economic integration applies to all forms of commercial exchange: buying and
selling goods and services, combining inputs to produce goods and services, capital
investments, and employment, including immigration. According to Griswold (2005),
they are five basic factors of regional economic integration from the standpoint of tariff
policies:
Free trade area is among the factors influence region promotion trade, the unrestricted
purchase and sale of goods and services between countries without the imposition of

26. 11
constraints such as tariffs, duties and quotas is called free trade (Griswold, 2005). Free
trade is a win-win proposition because it enables nations to focus on their core
competitive advantage(s), thereby maximizing economic output and fostering income
growth for their citizens. In free trade area all barriers to the trade of goods and services
among member countries are removed (Edward & Milner, 2002). In the theoretical ideal
free trade area, no discriminatory tariffs, quotas, subsidies, or administrative impediments
are allowed to determine its own trade policies with regard to non-members. Free trade
area where barriers to trade in respect of all items among member countries are
completely eliminated by each member country, which follows its own policy in regard to
trade with non-member countries (Edward &Milner, 2002).
The customs union is one step further along the road to fulfill economic and political
integration; a customs union eliminates trade barriers between member countries and
adopts a common external trade policy (Farm, 2004). According to Grinnell and williams
(1990), the establishment of a common external trade policy necessitates significant
administrative machinery to oversee trade relations with nonmembers. Customs union
apart from elimination of all barriers to trade among themselves, the member countries
follow a common policy in their trade with non-members (Justin, 2004). Customs unions
are extension of free trade areas in which members operate together to set a common
tariff for all non-member states/countries (David, 2004).
Common market, like a customs union, the theoretical ideal common market has no
barriers to trade between member countries and a common external policy. Unlike a
customs union, a common market also allows factors of production to move freely
between members (Engel & Rogers, 1996). Labor and capital are free to move because
there are no restrictions on immigration, emigration, or cross-border flows of capital
between member countries. Establishing a common market demands a significant degree

27. 12
of harmony and cooperation of fiscal, monetary and employment policies (Justin, 2004).
Common market is like a free trade area and customs union with the added freedom that
people and political can move freely between member countries as well as traded goods
and services (David, 2004).
Economic Union (EcUns) is established by means of a formal intergovernmental legal
agreement among sovereign countries/jurisdictions with the intention of fostering greater
economic integration. In an economic union some of the elements associated with a
national economic territory are shared among the different countries (Currency Union
Technical Expert Group [CUTEG], 2005).Allowing employees to form unions to bargain
collectively over wages and employment conditions is consistent with economic freedom,
and any government intervention preventing unionization would be a violation of
economic freedom(Randall & James , 2010).
According to Baldwin,(1976), a political union is the ultimate step along the regional
economic integration path. A political union brings full economic and political unification
to members of an economic union. The question whether or not there were a United
States of Europe sometime in the tomorrow‟s beyond, is an example of a situation of an
economic union maturing toward full economic and political unification (Justin, 2004).
2.1.3 Approaches for effective regional integration
There are several approaches in the regional integration process, ranging from the
formation of a trade bloc to the establishment of an economic and monetary union. Acean
(2010) said that, one important in the integration process is the formation of a customs
union which not only eliminates tariffs and quotas on trade between member countries,
but also establishes a common external tariff applying to non-members. The others are the
use of single currency payment, non-tariff barriers and integration market.

28. 13
Non-Tariff Barriers is any measure that blocks international trade other than tariffs.
Baldwin (1976) defines Non-Tariff Barriers as any measure (public or private) that causes
internationally traded goods and services, or resources devoted to the production of these
goods and services, to be allocated in such a way as to reduce potential real world
income. A Non-tariff-Barrier is a restriction other than a tariff that leads to a decrease in
world welfare (Mahé, 1997). Any governmental device or practice other than a tariff
which directly impedes the entry of imports into a country and which discriminates
against imports, but does not apply with equal force on domestic production or
distribution (Beghin & Bureau , 2001).NTBs mean measures other than tariffs which
effectively prohibit or restrict import or export of products(Acean, 2010).
In a study of Non-Tariff Measures (NTMs) in EAC region, Sangeeta et al. said that the
stock of the fundamental NTMs within EAC has been far from comprehensive and
other measures identified as NTMs in the member states were not specific to
regional or international trade and included national shortfalls in physical infrastructure,
as well as supply constraints that affect the overall business environment for private
enterprises.
Market integration, ever since the time of Adam Smith, the attribution to foreign trade of
the ability to affect the wholesale transformation of the productive powers of an economy
has remained a very powerful concept (Edward, 2010). Market integration is a market in
which there are no barriers to financial flows, and same risk asset commands the same
expected return, irrespective domicile. The term market integration also called Smith an
market (Griswold, 2005).Any market where capital may flow freely or a country with
uniform tax laws and regulation usually has an integrated market because there no
circumstances where one‟s return were reduced because of tax restrictions or different

29. 14
regulation (Kibret & Alemayehu,2002). To have a better understanding of the concepts of
market integration, it is necessary to know the concepts of market itself and the way in
which these are interrelated. Generally market is any place in which the buyers and
sellers interact each other, in which the price of a good tends to uniformity. The idea
behind market integration is that an efficient management of the overall industry or to say
the economy for the well-being of society(Baldwin, 1976).
According to Engel and Rogers (1996), currency union(Single currency payment)
strengthens the effects of a free market by rendering the latter irrevocable and by
motioning a commitment toward even more controlling in areas of regulations and social
policies. A common currency among partner countries is seen as “a much more serious
and durable commitment” than other monetary arrangements between countries. It
prevents future competitive devaluation, facilitates foreign direct investment and the
building of long-term relationships, and is likely to encourage forms of political
integration. Producers maybe more ing to undertake large fixed costs involved with
exporting abroad. This promote reciprocal trade, economic and financial integration and
foster even business cycle synchronization among the countries sharing a single currency
(Acean, 2010).
However, there are diverging views on this link. Some monetary costs disappear or fall
following monetary integration. For instance the introduction of the euro contributes,
amongst others, to reducing trading costs both directly and indirectly: whereby removing
exchange rate risks and the cost of currency hedging. The euro had a catalyzing role for
the Single Market Program by enhancing price transparency and discouraging price
discrimination. As a result, a common currency promotes convergence in social
conventions with potentially far reaching legal, contractual and accounting implications
(Garcia et al., 2001).

30. 15
According to the researcher, a single currency implies a single central bank and therefore
a potentially flexible supply of interregional means of payments. But in a currency area
comprising more than one currency, the supply of international means of payment is
conditional upon the cooperation of many central banks; no central bank can expand its
own liabilities much faster than other central banks without losing reserves and impairing
convertibility.
2.1.4 The importance of regional integration in Africa
According to Haas (1970), the role of the state in this process should be one of the key
questions in all integration, but unfortunately it was pushed to the sidelines over 57 years
ago, when the first attempts at regional integration were launched. Instead, its main
argument was that a transnational logic and a functional way of organizing human
activity were replacing the nation-state. In other words, the first integration theories
tended to avoid the state almost completely or at least saw that it had very little relevance
in steering the process. Nowadays there is no significance role of regional integration
because of different reasons like poverty and inadequate of human security.
2.1.5Overview of welfare
Most of us associate welfare with money, our savings, our investments, our homes or
other forms of financial capital. Welfare is a measure of the value of all of the assets of
worth owned by a person, community, company or country. Wealth is the found by taking
the total market value of all the physical and intangible assets of the entity and then
subtracting all debts. Essentially, wealth is the accumulation of resources. One of the
most basic principles of democracy is the notion that every citizen‟s preferences should
count equally in the realm of politics and government. A key characteristic of a
democracy is the continued responsiveness of the government to the preferences of its
citizens, considered as political equals.

31. 16
Wealthy nations can materially shape development in the poor world and that their efforts
to do so should consist largely of providing resources to and trading opportunities for
poor countries. In September, at the un Millennium Summit meeting of heads of state, in
New York , leaders of wealthy nations will emphasize their commitment to deeper debt
relief and increased aid programs for developing countries. The Millennium Development
Goals, the centerpiece of the conference‟s program, call for halving the levels of world
poverty and hunger by 2015. The summit will focus on increasing international aid to 0.7
percent of donors‟ gross national product to finance a doubling of aid transfers to
especially needy areas, particularly in Africa. Financial laid and the further opening of
wealthy countries‟ markets is tools with only a limited ability to trigger growth, especially
in the poorest countries. The tremendous amount of energy and political capital expended
on these efforts in official circles threatens to crowd out attention to other ways in which
rich countries could do less harm and more good (Nancy , Dani & Arvind , 2005).
People are said to be welfare when they are able to accumulate many valuable resources
or goods. Wealth is expressed in a variety of ways. For individuals, net worth is the most
common expression of wealth, while countries measure by gross domestic product (GDP)
or GDP per capita (Beghin & Bureau , 2001).There are different measures of net worth,
but the researcher intends to focus on price of cement in Rwanda and quantity of cement
in the region, as this research problem focuses on the price of cement in Rwanda which is
highest in the region.
Optimal price is the profit maximizing through affordable price. It can be determined
through various methods, but generally it is the demand price for the full capacity output
of any given product(NaLi, Lijun, & Steven., 2002).An optimal pricing strategy may
involve favoring certain agents by offering the good at a discounted price and
subsequently exploiting the positive effect of their usage on the rest of the consumers. At

32. 17
its extreme, such a scheme would offer the product for free to a subset of consumers,
hoping that this would have a large positive impact on the purchasing decisions of the rest
(Ozan ,Kostas &Ozdaglar, 2005). The researcher used linear regression model on the
basis of determining optimal price and cost of cement .
According to Ozan et al. (2012), optimal quantity demanded term used in economics to
describe the total amount of goods or services that are demanded at any given point in
time. The quantity demanded depends on the price of a good or service in the
marketplace, regardless of whether that market is in equilibrium. When a given quantity
of a good or service is demanded, as determined by its price, it then impact the amount of
goods or services that were purchased. Demand side management is a key component of
future smart grid that can help reduce peak load and adapt elastic demand to fluctuating
generations (Nali, Lijun& Steven).
2.2. Empirical literature
A large number of empirical studies have provided a wealth of information about the
important role that regional integration plays in mediating countries‟ imports and exports.
Product quality was first emphasized in international trade wealthy countries have both a
higher taste for quality and, given their firms‟ proximity to relatively wealthy customers,
a comparative advantage in producing it (Andrew, Bradford ,Stephen, Redding & Peter ,
2007).
According to Nancy , Dani and Arvind (2005) it is time to direct the attention of the
world‟s wealthiest countries to other ways of helping the poorest ways that have been for
too long neglected. They also postulated that the reality is that liberalizing agricultural
trade would largely benefit the consumers and taxpayers of the wealthy nations. To help
developing countries help themselves, wealthy nations must begin to lift the burdens they
impose on the poor. Currently, the developed world uses international trade agreements to

33. 18
impose costly and onerous obligations on poor countries. The most egregious example
has been the WTO‟s intellectual property agreement, the Trade-Related Aspects of
Intellectual Property Rights (TRIPs).
Katembo (2008) postlated thatto understand why the EAC concept had to be re-launched,
the circumstances and issues affecting its demise and collapse must be revisited and
accessed. In the 1890s, British colonial interest in East Africa (conceived as a region from
a territorial perspective) can be traced back to accomplishing three major objectives: 1)
securing control of the Nile headwaters as a conduit for protection of British position in
Egypt and the Suez Canal, 2) monitoring of pre-World War I era German imperial plans
in the region, and 3) opening up the Kenyan hinterland via rail transport to introduce
lucrative large-scale farming. At this time, the East African region, colonized under
British control, was comprised of Tanganyika (i.e. mainland Tanzania), Kenya, Uganda,
and Zanzibar (an island off the coast of Tanganyika). He also confirmed that the EAC
(East African Community is the umbrella organization overseeing a pan-nation trade bloc
consisting of Kenya, Tanzania, Uganda, Rwanda, and Burundi. This confederation
features a single currency, common language (Kiswahili), and shared regional initiatives.
The paper also chronicles and highlights the challenges and the moments of triumph that
have brought the EAC to fruition and functionality (Katembo, 2008).
2.3.Critical review and research gap identification
The researcher criticized the study of Katembo, Philippe et al.,Kibret and Alemayehu and
Edward . Katembo (2008) carried out a research called Pan Africanism and Development:
The East African Community Model. His paper discusses the EAC model as an extension
of Pan-Africanism, its use as a prototype for economic integration in other African
regions, and the reciprocal benefit of mutual cooperation with the African Diaspora. His

34. 19
study also register and highlights the challenges and the moments of achievement that
have brought the EAC to fruition and functionality. Katembo study focused on the
challenges faced by EAC. His research methodology was focused on the experience and
results of past studies. His research was very important, but he did not focus on the
benefits that citizens could get from regional integration.
Philippe et al. (2008)presented a critical review of previous studies on the indicators of
regional trade integration with setting up indicator systems for monitoring regional
integration processes in different parts of the world. The review covered both conceptual
proposals as well as indicator systems developed for regional organizations such as the
European Commission, the European Central Bank, the UN Economic Commission for
Africa, COMESA, etc. A systematic comparison of the different indicator systems made
it possible to evaluate their relative qualities and to identify best practices. Philipe et al.
research designed qualitatively and quantitatively. Their research was very important in
the concept of regional integration, but they did not focus on regional welfare of Rwanda
traders and benefits that they get from regional integration.
Moreover, Kibret and Alemayehu (2002) carried out a research called Regional Economic
Integration in Africa: A Review of Problems and Prospects with a Case Study of
COMESA. They have attempted to examine both the theoretical and empirical issues of
regional economic integration in Africa. This paper critically reviews the implementation
issues in East Africa Community cover the economic, political and institutional, and tests
the determinants of trade flows using the experience of COMESA as a case study. The
major conclusions that emerge from the study are: First, bilateral trade flows among the
regional groupings could be explained by standard variables as demonstrated by the

35. 20
results of the conventional gravity model, while regional grouping has had insignificant
effect on the flow of bilateral trade. And, second, the review of the issues indicates that
the performance of regional blocs is mainly constrained by problems of variation in initial
condition, compensation issues, real political commitment, overlapping membership,
policy harmonization and poor private sector participation. In their study, they did not
focus on citizens‟ wealth.
Furthermore, Edward (2010) established the study called customs and trade facilitation in
the East Africa community (EAC). This study expounds and evaluated the contribution of
customs to trade facilitation within the East African Community (EAC). He used
regression analysis and concluded that the establishment East African Customs Authority
can lead to trade facilitation only if there is a formidable amendment of East Africa
Community customs law so as to enable better coordination among all stakeholders in all
the East Africa Community Partner States.
It is important to note that, although there have been various researches from different
countries like Philippe et al. (2008) and Katembo (2008) on this topic. These studies did
not analyze the influence of regional integration to welfare of Rwanda traders using
Pearson correlations coefficient and regression analysis . This is our guiding motivator to
conduct a research in the local situation to enable us prove or disapprove, so far, the
studies conducted elsewhere on this topic for local situation relevance. In addition, it is
our aspiration to concentrate on the gaps by some of the researchers as highlighted in this
review. Therefore, It is against that gap that the researcher carried out this research called
EAC integration and Rwanda traders „welfare, with reference to Rwandan Cements
Traders (RCT).

36. 21
2.4. Theoretical framework
Regression analysis is a statistical tool for the investigation of relationships between
variables. Usually, the investigator seeks to ascertain the causal effect of one variable
upon another the effect of a price increase upon demand, for example, or the effect of
changes in the quantity supply upon the price of cement in this study. To explore such
issues, the investigator assembles data on the underlying variables of interest and employs
regression to estimate the quantitative effect of the causal variables upon the variable that
they influence. The investigator also typically assesses the statistical significance of the
estimated relationships, that is, the degree of confidence that the true relationship is close
to the estimated relationship (Alan , 2006).
According to Harper (1991) the linear regression model is presented by the,
𝑌𝑖 = 𝛽0 + 𝛽1 𝑥𝑖 + 𝜀𝑖 , where𝛽0and 𝛽1 are unknown constants and the error terms are
usually assumed to be𝜀1 ,𝜀𝑖,…………….𝜀 𝑛 ~ 𝑁(0, 𝜎2
) .,
𝑌𝑖~ 𝑁 𝑏0 + 𝑏1 𝑥𝑖, 𝜎2
, this implies that in order to minimize error, linear regression
minimizes error using normal distribution.
𝑏1 =
𝑛 𝑥 𝑖∗𝑦 𝑖−( 𝑥 𝑖)∗( 𝑦 𝑖)
𝑛 𝑥 𝑖
2−( 𝑥 𝑖)
2 , 𝑏0 = 𝑀𝑒𝑎𝑛 𝑜𝑓 𝑌 − 𝑏1 ∗ 𝑀𝑒𝑎𝑛 𝑜𝑓 𝑥
When you choose to analyze your data using linear regression, part of the process
involves checking to make sure that the data you want to analyze can actually be analyzed
using linear regression. You need to do this because it is only appropriate to use linear
regression if data "passes" some assumptions that are required for linear regression to
give a valid result. In practice our two variables should be measured at the continuous
level, in this study quantity of cement is measured in tons and price of cement is
measured in US $, there needs to be a linear relationship between the two variables under

37. 22
study, in our case the variables under study are quantity of cement and its price, there
should be no significant outliers. An outlier is an observed data point that has a dependent
variable value that is very different to the value predicted by the regression equation. As
such, an outlier will be a point on a scatter plot that is (vertically) far away from the
regression line indicating that it has a large residual, independence of observations, in this
study it has been checked using the Durbin-Watson statistic, the Durbin-Watson statistic
is always between 0 and 4. A value of 2 means that there is no autocorrelation in the
sample. Values approaching 0 indicate positive autocorrelation and values toward 4
indicate negative autocorrelation. data needs to show homoscedasticity, which is where
the variances along the line of best fit remain similar as you move along the line, check
that the residuals (errors) of the regression line are approximately normally distributed;
two common methods to check this assumption include using either a histogram or a
Normal P-P Plot(Beghin & Bureau , 2001). This research used histogram to test
normality.
2.5 Conceptual framework
This research recognized the different factors that lead to region integration. These have
been identified in the literature review above. However, this study focused on economic
and other integration factors. The study analyzed the relationship between these factors
with welfare of Rwanda trader‟s indicators. According to figure 2.1, the independent
variable (East Africa Community integration) facilitates the performance of dependent
variable (traders‟ welfare). Apart from dependent and independent variables, there is
intervening variable with other influences on citizens‟ wealth, such as non-tariff barriers,
language and trade culture. This can be represented under the theoretical model: figure
2.1

38. 23
Figure 2.1:Link between EAC and welfare of Rwanda traders
Independent variable Dependent variable
INTERVENING VARIABLE
Source: Researcher (2014)
The figure 2.1 indicates the relationship of variables under study, such as East Africa
Community and traders‟ welfare. This study focused on non- tariff barriers, free trade
area, custom union, single currency payment and cost of cement in EAC members as the
main determinants of EAC. And then, this study analyzed optimal price of cement and
optimal quantity of cement as the main indicators of cement traders‟ welfare. The
relationship between these variables has been analyzed using regression analysis and
Pearson correlation coefficient.
Market integration
Free trade
Political integration
Customs union
TRADERS ‘WELFARE
Optimal price of cement
Optimal quantity of cement
EAST AFRICA
COMMUNITY
Non-Tariff-Barriers
Free trade area
Customs union
Single currency payment
Cost of cement in EAC
members
Language
Culture
Regional security

39. 24
2.6. Summary
From the past critical review the researcher found that many studies on regional
integration has focused on how regional integration influences regional promotion. Kibret
and Alemayehu have attempted to examine both the theoretical and empirical issues of
regional economic integration in Africa, this study was very important for regional
integration and regional promotion. Regional integration topic is of importance to citizens
wealth especially with the trend of globalization in which the world is converging into a
one shop market and customers satisfaction. Literature review has shown a strong
regional integration due to its importance to regional promotion. These authors, scholars
and researchers have similarly suggested that regional integration may mean different
things for different types of community states, most findings and conclusions have linked
regional integration and promotion of regional trade. Thus, this is one aspect that has a
positive impact on business. Thus, this subject provides valuable justification for this
research for advancement of knowledge, in which case our desire to investigate the effect
of EAC and welfare of Rwandan traders using regression analysis and Pearson correlation
coefficient: - A case of Rwandan cements traders.

40. 25
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
According to Rajasekar et al. (2013) research methods are the various procedures,
schemes and algorithms used in research. All the methods used by a researcher during a
research study are termed as research method. They are essentially planned, scientific and
value-neutral. This chapter focuses on the approach adopted for the study which describes
the method and techniques that are adopted to collect data for the analysis of field data.
As a result, the research design, data requirement and sources, sampling frame and
techniques, the data collection tools and techniques, the data analysis and presentation
methods were discussed.
3.1 Research design
According to Rajasekar et al.(2013), it is necessary for a researcher to design a
methodology for the problem chosen. One should note that even if the method considered
in two problems is same the methodology may be different. A research design represents
a plan, structure, and strategy of investigation conceived so as to obtain answers to
research questions and to control variance. The researcher used a case study and adopted
both descriptive and correlation research design with the intention of ensuring that issues
related to the effect of regional integration on citizens wealth. The descriptive research
design was used to ensure that the characteristics of variables of interest in a situation are
described, and correlational based on qualitative and quantitative data both from primary
and secondary sources was considered in order to determine relationship between
variables. The study was based on the views of respondents (primary data) and secondly
data to make conclusions and recommendations. This research also used Durbin Watson
Statistic and scatter plot to verify the use of linear regression analysis in this research.

41. 26
3.2Target population
A population is the totality of persons or objects with which a study is concerned
(Grinnell & Williams, 1990). The population of this research was 418 responds including
50 employees of ministry of East Africa community (MINEAC) employees and 368
members of Rwandan cement traders‟.
Table 3.1: Target population
Target population category Population under study
MINEAC employees 50
Rwanda Cement Traders‟ members 368
Total 418
Source: Secondary data
3.3Sample design
Grinnell and Williams (1990) defines a sample as a subset or portion of the total
population under study. This part concerns the sample size and sampling procedures were
used to come up with the sample size. In practice, the sample size were used in a study
were determined based on the expense of data collection, and the need to have sufficient
power. Sampling is the process of selecting elements from the total population Rajasekar et
al. ( 2013) said that, sample size is respondents defined as definite part of statistical
population whose properties are studies to gain information about the case of study. It is
not potential to collect data from the whole population due to the time and financial
constraints. In this study, the researcher used both primary and secondary data. That
means questionnaires, interview guiding and report on cement in Rwanda.

42. 27
3.3.1 Sample size determination
The level of precision or sampling error were 10% and 90% confidence level, total
population were418, Morgan formula were used, where
𝑛 =
N
1+N e 2
=
418
1+418(0.12)
=
418
1+418∗0.01
=
418
5.18
= 81, and then, n= 81respondents. The
sample size of the study was 81 people and is classified in the table 3.2, according to the
four provinces, Kigali City and MINEAC employees.
Table 4.2: Purposive sampling technique
population
category
Sample
size
Purposive sampling
MINEAC
employees
15
5
1. Department of trade and commerce
2. Department of finance and accounting
Rwanda Cements
traders
10
10
10
10
21
1. Northern province
2. Southern province
3. Eastern province
4. Western province
5. Kigali city
Total 81
Source: Primary data
3.3.2 Sampling technique
The choice of sampling technique is based on the feasibility and sensibility of collecting
data to answer the research questions and to address the objectives. Quantitative
researches usually ensure sample representativeness using scientific, statistical and

43. 28
probabilities or random sampling as quantitative research therefore, this study is going to
use purposive sampling method.
Purposive sampling technique: In choosing a sampling method for selection, the question
the researcher is interested in answering is of greatest importance (Tongco & Dolores,
2007). Purposive sampling technique is a type of non -probability sampling where the
researcher consciously selects particular elements or subjects for addition in a study so as
to make sure that the elements have certain characteristics pertinent to the study. It
normally targets a particular group of people. According to Kenneth (1978), purposive
sampling is a method of sampling whereby the researcher uses his or her own judgment
about which respondents to choose, and picks only who best meet the purpose of the
study and it refers to non-probability sample that is often called a judgmental sample
Therefore table 3.2 shows that Purposive sampling technique used to question 81
respondents.
3.4. Data collection methods
The sources of data to be collected were primary and secondary data. Primary data were
collected at the first hand when the researcher arrived to the field to collect raw data from
MINEAC employees and cement traders (in 4 provinces and Kigali city). However
secondary data were obtained from cement traders and MINICOM reports or journals.
3.4.1 Data collection instruments
The researcher used various instruments that help in acquiring the sufficient data required
from both primary and secondary sources. The researcher in this case used questionnaires
and interview guide to collect data from MINEAC and Rwanda cement traders
association.

44. 29
A questionnaire is a set of well-designed questions intended to help the researcher acquire
the required information from respondents. The researcher in this case formulated
questions regarding the study variables and gives them to respondents to express their
views on the study topic.
The researcher formulated an unstructured interview which to help in getting data from
some of the employees and traders who were busy with limited time to fill questionnaires.
Documentary review: The researcher further reviewed various literatures of regional
integration and citizens‟ wealth.
3.4.2 Administration of data collection instruments
The researcher designed the questionnaires according to the research objectives, questions
and then as the research analyzed two variables, the researcher focused on price and
quantity. The distributions of the questionnaires were done by the researcher and their
collections were done after they were completely filled. The researcher distributed
questionnaires in four provinces, Kigali city and MINEAC. The researcher explained to
the respondents the purpose of the research which is academic only and also requested
them to completely answer the questionnaires.
3.4.3 Reliability and Validity
Reliability demonstrates that the operations of the study such as the data collection
procedures can be repeated and reach to equal result. The researcher tried as much as
possible to ensure that the findings of the research are properly analyzed and interpreted
for accurate conclusions. The validity of this study was constructed by the use of sources
of evidence during the data collection, the establishment of a chain of evidence which is
based on the principle of allowing the external observer to follow the source of any
evidence from initial research questions to the conclusions of the case study. Therefore,

45. 30
the researcher first carried out a pilot study by testing questionnaires to20people. And
then after, the researcher tested questionnaire using SPSS and found that Cronbach's
Alpha coefficient equals to 0.862.
3.5. Data analysis procedures
The researcher used SPSS as the statistical tool. This involved analysis of regression
model and presenting findings in a logical and sequential way so that conclusions could
be drawn from them. The data were presented according to the research questions and
research objectives. Tables, figures and equations were used to present data. Data from
completed questionnaires and unstructured interview were edited, categorized and entered
into SPSS sheets and summarized using the percentage and frequencies of respondents for
analysis. The relationship between EAC and welfare of Rwanda traders were analyzed
using SPSS and interpretations were done using Pearson correlation coefficient. The data
processed were analyzed according to the research objectives one by one with the
consideration of the variable indicators shown in the conceptual framework.
3.5.1 Processing of data
Data processing is, broadly, the collection and manipulation of items of data to produce
Meaningful information. In this sense it can be considered a subset of information
processing the change (processing) of information in any manner detectable by an
observer. Data analysis makes use of specialized and highly accurate algorithms and
statistical calculations that are less often observed in the typical general business
environment. During data process the research focused on editing, coding, recording,
classification and tabulation.

46. 31
The researcher checked for completeness, accuracy, consistency, word choice, writing
style and spelling errors of the research instruments. While a writer may accept, negotiate
or reject individual edits, the efforts of an editor always enhance the final product.
Manual data adjustment and editing is when the selection of a more reasonable value is
done by a person. It may involve writing down, for key entry, the adjustments to be
posted to the survey data file using a batch procedure. "Manual" data adjustments may
also take place interactively as in the process of "heads-up" data entry or interactive data
review.
A frequent criticism of coding method is that it seeks to transform qualitative data into
quantitative data. Coding is a systematic way in which to condense extensive data sets
into smaller analyzable units through the creation of categories and concepts derived from
the data. The process by which verbal data converted into variables and categories of
variables using numbers, so that the data can be entered into computers for analysis. For
surveys or questionnaires, codes are finalized as the questionnaire is completed. In this
study the researcher used numerals in order to well understand the research process. Most
research studies result in a large volume of raw data which must be reduced into
homogeneous groups if we are to get meaningful relationships. This fact necessitates
classification of data which happens to be the process of arranging data in groups or
classes on the basis of common characteristics. In this study the researcher classified the
secondary data according to the price and quantity of cement.
Descriptive statistics in decrypting EAC integration and Rwanda traders‟ welfare were
used; the statistics like frequency, percentage, mean, mode and medium were used. The
research used linear regression analysis to establish a question of quantity of cement and
price.

47. 32
Pearson Correlation coefficient calculation was done to find out the role of EAC
integration and traders‟ welfare in terms of percentage. Pearson product moment will be
used. According to Yount (2006) if Pearson correlation coefficient (r ) is 0 therer is no
correlation between variables, if r is in the range between ] 0, 0.5 [ the variables are
weakly correlated, if r is in the range between ] 0.5, 0.79 [ the variables are strongly
correlated, if r is above 0.8 the variables are strongly and perfectly correlated , if r is
negative the variables are negatively correlated (varibles change in opposite direction)
and then if r is positive, the variables are positively correlated (Variables change in the
same direction).
3.6 Ethical Consideration
Respondent‟s participation was voluntary and they had the right to withdraw from the
study at any time they not interested. Confidentiality was promised and ensured, by
providing a self-addressed return envelope with each questionnaire and by requesting
respondents not to write their names on the questionnaire. In addition, an authorized letter
which explained the aim and objectives of the study accompanied each questionnaire.

48. 33
CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSION
4.0Introduction
In this chapter the researcher presented the findings which were collected from the field
by using the questionnaires and unstructured interview. The questionnaires were
administered to the respondents whereby they were required to fill in their information
based on their understanding of East Africa Community and citizens‟ wealth. This
chapter presented in tables, figures and equation. This chapter is divided into two
division; demographic characteristics of respondents and presentations of findings related
to research objectives.
4.1 Demographic characteristics of respondents
This subsection focuses on gender of respondents in order to know whether EAC has
promoted gender balance in trading, age of respondents in order to assess how old are the
population involved in EAC trade, education and experience of respondents in order to
get accurate information.
Table 4.3: Distribution of respondents by gender
Frequency Percent
Male 60 74.1
Female 21 25.9
Total 81 100.0
Source: Primary data
The table 4.3 indicates that out of 81 respondents, 74.1 % of respondents were male and
25.9% of respondents were female.

49. 34
From these data, there were larger figures of male who participate in EAC activities
rather than female. Hence, the number of male is greater than the number of female, this
implies that the number of female who participate in EAC activities is still low according
to the number of male, actually, gender balance is still low in EAC.
Table 4.4: Distribution of respondents by Level of education
Frequency Percent
University 37 45.7
Secondary 41 50.6
Primary 3 3.7
Total 81 100.0
Source: Primary data
The table 4.4 shows that 45.7 % of respondents were University level, 50.6% were
secondary level and 3.7% were primary level. Thus, from this information, the conducted
respondent‟s level of literacy was adequate in order to well respond research questions.
Table 4.5: Distribution of respondents by Experience in EAC cement trade
Frequency Percent
2 - 4 Years 18 22.2
4 - 6 Years 45 55.6
Above 6 Years 18 22.2
Total 81 100.0
Source: Primary data
The table 4.5 indicates that 22.2 % of respondents had experience between 2 – 4 years,
55.6 %of respondents had experience between 4 – 6 years and then 22.2 % of

50. 35
respondents were experienced above six years. This data shows that the conducted
respondents had accurate information about the research objectives.
4.2 Presentation of findings
This section is divided into three sections. Both primary and secondary data were
arranged according to research objectives. These data has been gotten using
questionnaire, unstructured interview and documentary review. The collected data is
summarized into tables, figures and equation using SPSS program.
4.2.1 Factors facilitate region members in trading
This subsection focuses on the factors facilitate region members in trading on the basis of
optimal price and quantity demand of cement. Those factors are Non-tariff barriers,
Exchange rate, free trade-area, customs union, literacy, culture, different production cost
of cement.
Table 4.6: Views of respondents on Elimination of Non-tariff barriers
Frequency Percent
Yes 69 85.2
No 12 14.8
Total 81 100.0
Source: Primary data
The table 4.6 indicates that 85.2 % of respondents accepted that elimination of Non-tariff
barriers are one of the factors that facilitate trade of cement in EAC region, 14.8% of
respondents did not accept the statement.
As Non-Tariff Barriers is any measure that blocks international trade other than tariffs
and cause internationally reduction of potential real world income. Elimination of Non-

51. 36
tariff barriers is a key factor of success of EAC to have optimal price and quantity of
cement in the region.
Table 4.7: Views of respondents on exchange rate
Frequency Percent
No 81 100.0
Total 81 100.0
Source: Primary data
The table 4.7 indicates 100 % of (81) respondents said that exchange rate in EAC region
did not facilitate region members in trading on the basis of optimal price and quantity
demand of cement.
Actually, regional integration should imply more than an elimination of exchange rate
volatility among its members, if EAC members‟ countries use single currency payment, it
should also reduce transaction costs relevant to trade of cement. Thus, EAC members
need to implement the plan of single currency payment in the region. In other words,
exchange rate is one of the obstacles faced by regional trade which must be eliminated.
Table 4.8: Views of respondents on Free-trade area
Frequency Percent
Yes 38 46.9
No 43 53.1
Total 81 100.0
Source: Primary data

52. 37
The table 4.8 indicates that 46.9% of respondents accepted that free-trade area in EAC
members facilitates region members in trading on the basis of optimal price and quantity
demand of cement, but 53.1% of respondents did not accept this statement.
The above data motivate the researcher to confirm that some members of EAC region
focus on free-trade area like free movement of goods and service between Uganda,
Rwanda and Kenya, where the citizens could use ID or student card .Whereas, on the
other hand Tanzania and Burundi did not implement these.
Table 4.9: Views of respondents on Customs Union
Frequency Percent
Yes 34 42.0
No 47 58.0
Total 81 100.0
Source: Primary data
The table 4.9 indicates that 42.% of respondent said that customs union facilitates region
members in trading on the basis of optimal price and quantity demand of cement, whereas
58 % of respondents did not accept the statement.
Hence, as the customs union is one step further along the road to fulfill economic and
political integration; a customs union eliminates trade barriers between member countries
and adopts a common external trade policy, unfortunately, EAC do not implement their
plan in the same way. Thus, there is a need of strong leadership in EAC members.

53. 38
Table 4.10: Views of respondents on Literacy
Frequency Percent
No 81 100.0
Total 81 100.0
Source: Primary data)
The table 4.10 indicates that 100%of 81 respondents indicate that literacy did not
facilitate region members in trading on the basis of optimal price and quantity demand of
cement..
As literacy rate is the ability to ready, write and understand the concept in other to make
a good decision and the country‟ literacy rate, defined as those aged 15 or over who can
read a, this research found that literacy did not facilitate EAC regional trade. Hence,
mobilization is still low about the benefits of EAC to citizens.
Table 4.11: Views of respondents on Culture
Frequency Percent
Yes 69 85.2
No 12 14.8
Total 81 100.0
Source: Primary data
The table 4.11 indicates that 85.2 % accepted that culture of EAC citizens‟ is among of
the factors facilitate region members in trading, whereas 14.8% did not accept the
statement.
Thus, culture is the quality in a person or society that arises from a concern for what is
regarded, development or improvement of the mind by education or training, the

54. 39
behaviors and beliefs characteristic of a particular social, ethnic, or age group. The EAC
citizens have some similarities concerning their culture. The reason why culture is among
the factors facilitates EAC trade in general.
Table 4.12: Views of respondents on Different Production cost of cement
Frequency Percent
Yes 69 85.2
No 12 14.8
Total 81 100.0
Source: Primary data
The table 4.12 shows that 85.2 % of respondents confirmed that different production cost
of cement facilitate region members in trading on the basis of optimal price and quantity
demand of cement, whereas 14.8% of respondents did not confirm.
The different production cost of cement in EAC region improves the competition in the
region. And then that competition influence the quality, quantity and price of cement in
the regional trade.
4.2.2. Approaches used by EAC members in trade
This subsection focuses on the approaches used by EAC regional members to achieve
their goals regarding trade, such as security community, free movement of goods and
people, Building quality infrastructure, remove road blocks and mobilization.

55. 40
Table 4.13 Views of respondents on Security community
Frequency Percent
Yes 66 81.5
No 15 18.5
Total 81 100.0
Source: Primary data
The table 4.13 indicates that 81.5% of respondent accepted that security community is
among the different approaches used by EAC members to achieve their goals regarding
cement trade in the region, whereas 18.5% did not accept the statement.
As security is a set of all basic needs of citizen in the region. EAC has established a force
called East Africa Stand By Force (EASBF).This EASBF has responsibility to make sure
that the security in the region is in good faith. Hence, East Africa Community focuses on
security community as a tool of attracting investors in the region.
Table 4.14: Views of respondents on free movement of goods and people
Frequency Percent
Yes 61 75.3
No 20 24.7
Total 81 100.0
Source: Primary data
According to the table 4.14, the majority of respondents confirmed that free movement of
goods and people are among of the approaches used by the EAC members to achieve
their goals concerning trade in the region. Where 75.3% of respondents confirmed the
statement and then 24.7% of respondent did not.

56. 41
Hence, the free movement of goods is one of the success stories of one side of the EAC
project. It has helped to build the internal market from which citizens and businesses are
now benefiting. Many of the major restrictions on the free movement of goods have now
been removed. As free movement of goods and service facilitate time savings in regional
businesses, East Africa Community could use this approach in order to attain the goal
regarding to trade in the region.
Table 4.15: Views of respondents on Building quality infrastructure
Frequency Percent
No 81 100.0
Total 81 100.0
Source: Primary data
The table 4.15 indicates that 100% of 81 respondents confirmed that building quality of
infrastructure is among the approach used by EAC members in order to promote regional
trade.
Quality infrastructure relates to all fields of standardization and testing systems, quality
management, and conformity assessment, including certification and accreditation. Thus,
the quality of infrastructure facilitated the performance of EAC members in terms of
trade.
Table 4.16: Views of respondents on Remove road-blocks
Frequency Percent
Yes 6 7.4
No 75 92.6
Total 81 100.0
Source: Primary data

57. 42
According to the table 4.16, the majority of respondents (92.6 %) said that remove road
blocks is not among of the approaches used by EAC members for achieving their goal
regarding regional trade. Road blocks are still problem in EAC member‟s trade,
especially in Tanzania. Thus, there is a need of other requirement and agreement in order
to well implement the plans which have been established by EAC members for all sides.
Table 4.17: Views of respondents on Mobilization
Frequency Percent
Yes 65 80.2
No 16 19.8
Total 81 100.0
Source: Primary data
The table 4.17 indicates that 80.2% of respondents confirmed that mobilization is among
the approaches used by EAC members in order to achieve their goal concerning trade in
the region whereas, 19.8% of respondents did not accept that statement.
As mobilization refers to Organize and encourage (a group of people) to take collective
action in pursuit of a particular objective; mobilization is a useful approach or tool which
should be used to achieve the goal. Thus, EAC members have to increase the level of
mobilization in order to commutate EAC plans to its member‟s citizens and other
stakeholders.
4.2.3 Correlation of EAC integration and traders’ welfare
This section focuses on the correlation of regional trade integration and traders‟ welfare
using price and quantity demand of cement. In order to well analyze the correlation the
researcher used both primary and secondary data in this section.

58. 43
Table 4.18: Correlation between EAC integration and Rwanda traders’ welfare
East Africa
Community
Traders‟ welfare
East Africa
Community
Pearson Correlation 1 .402**
Sig. (2-tailed) .000
N 81 81
Traders‟ welfare Pearson Correlation .402**
1
Sig. (2-tailed) .000
N 81 81
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Primary data
According to the table 4.18 and then, according to (Yount, 2006) as this research stated
in chapter three for data analysis, if Pearson correlation coefficient if Pearson correlation
coefficient ( r ) is in the range between ] 0, 0.5 [ the variables are weakly correlated. This
implies that EAC integration and Rwanda traders‟ welfare are positively and weakly
correlated with r equals to 0.402. Hence, according to MINEAC employees and Rwanda
ciment traders, EAC integration influence the level of trader‟s welfare on the rate of
40.2%.
Legend:
[-1.00 - 0.00[ : Negative correlation;
[0.00 - 0.25 [ : Positive and very low correlation;
[0.25 - 0.50 [ : Positive and low correlation;
[0.50 - 0.75 [ : Positive and high correlation and
[0.75 - 0.1.00] : Positive and very high correlation.

59. 44
The variation of Pearson Coefficient correlation is between -1 and 1. Pearson Coefficient
correlation has significance when it is equal or greater than 0.05. According to the
research, the correlation of 0.402 (40.2%) is located in the interval [0.25-0.50[categorized
as positive and low correlation. As the significant level is at 0.01 (1%), the p-value of
0.000 (i.e. 0.0%) is less than 0.01%. This leads to confirm that there is relationship
between EAC integration and traders‟ welfare. This was also justified by the respondents‟
level of agreements on that contribution which was presented in the table 4.19 up to 4.21.
4.2.4 Perception on EAC integration on traders’ welfare
The researcher focused on the benefits that Rwanda country targets from EAC and other
questions related to EAC trade and Rwanda citizens‟ wealth. This subsection is
confirming the relationship between EAC and Rwanda traders‟ welfare.
Table 4.19: Perception on benefits Rwanda country targets from EAC members
Frequency Percent
Industrial specialization 30 37.0
Investment facilitation 26 32.1
Increased competition 25 30.9
Total 81 100.0
Source: Primary data
The table 4.19 indicates that the benefits that Rwanda country targets from EAC
members, whereby 37.0% of 81 respondents perceived that industrial specialization is
among the benefits Rwanda country targets from EAC members, 32.15% of 81
respondents perceived that Rwanda country targets investment facilitation, and then
30.9% perceived that Rwanda country targets increment of competition in the country.
None perceived regional security and international security.

60. 45
Industrial specialization and investment facilitations attract investors in the country, and
then high level of competition in Rwanda facilitates the citizens‟ to benefit the quality of
products on the affordable or optimal price. For instance, the researcher can use the case
of the improvement and access of University education level in Rwanda.
Table 4.20: Perception on EAC and the price of cement in Rwanda
Frequency Percent
SA 41 50.6
A 40 49.4
Total 81 100.0
Source: Primary data
According to the table 4.20, all respondents perceived that the integration of Rwanda in
EAC influence positively the price of cement in Rwanda. Whereby, 50.6 % of
respondents strongly agreed the statement and 49.4% of respondents agreed the
statement. Hence, the entrance of Rwanda in EAC is a key of business success in
Rwanda, because of the improvement of competition, availability of quantity needed and
affordable price of the product.
Table 4.21: Perception on EAC and the quantity of cement needed in Rwanda
Frequency Percent
SA 38 46.9
A 43 53.1
Total 81 100.0
Source: Primary data
The table 4.21 indicates that 46.9% of 81 respondents strongly agreed with the statement
and 53.1 % of 81 respondents agreed with the statement.

61. 46
From this information, the researcher confirmed that integration of Rwanda in EAC
region facilitates the improvement of production and availability of quantity of cement.
Table 4.22: Perception of respondents on being an EAC’ citizen
Frequency Percent
Good 73 90.1
Bad 8 9.9
Total 81 100.0
Source: Primary data
The table 4.22 indicates that 90.1 % of respondents said that according to their individual
life conditions, it is good to be an EAC citizen whereas, 9.9 % of respondents it is bad.
Therefore, East Africa Community has a positive effect on individual life conditions, but
there are some obstacles that citizens should meet during their business activities, like
high competition between large and small businesses in the region.
4.2.5 Analysis and presentation of secondary data
This subsection focused on the presentation and analysis of secondary using SPSS
computer program. The analysis was done on the basis of relationship between ASCC in
EAC and quantity of cement, and then relationship between DPC in Rwanda and
aggregate quantity of cement. The data from MINEAC and MINICOM were for the
period of 13 years (2001 – 2013).

62. 47
Table 4.23: Supply cost, demand price and quantity demand of cement
Year ASCC in EAC DPC in Rwanda AQDC in EAC
1 220 240 6800
2 220 240 7300
3 180 200 6500
4 160 180 4800
5 320 340 10700
6 220 240 7300
7 170 190 5200
8 170 190 5500
9 180 200 5500
10 170 190 6100
11 150 200 6300
12 170 190 7200
13 240 260 7900
Source: Secondary data (2014)
The table 4.23 summarizes the secondary data used in this research to establish the
correlation between demand price of cement in the region and quantity of cement. These
data also used to establish a simple linear regression model. Where; ASCC: Aggregate
Supply Cost of Cement In the region, DPC : Demand Price of Cement in Rwanda and
AQDC: Aggregate Quantity Demand of Cement in the region.
This paragraph showed only main tables histograms required to understand results from
the linear regression procedure concerning the relationship between quantity of cement
and cost of supply, assuming that no assumptions have been violated as we have stated in
theoretical literature. A complete explanation of the output has been verified when
checking data for the assumptions required to carry out linear regression is provided
theoretical literature. This includes relevant histogram, and the Durbin-Watson statistic.

63. 48
Figure 4.2:Test of normality of quantity of cement from EAC
Source: Primary data
The figure 4.1 (histogram‟s shape) approximates a bell-curve and it suggests that the data
have come for a normal population. From the table …in the appendices, the researcher
calculated Skewness Z-value = 1.042, Kurtosis Z-value = 0.171 and found all Z-value are
within ]-1.96 – 1.96[

64. 49
Figure 4.3: Test of normality of demand price of cement in EAC
Source: Primary data
The figure 4.2 (histogram‟s shape) approximates a bell-curve and it suggests that the data
have come for a normal population. From the table 26 in the appendices, the researcher
calculated Skewness Z-value = 1.042 , Kurtosis Z-value = 0.171 and found all Z-value are
within ]-1.96 – 1.96[. Therefore, from the figure 4.1 and 4.2 the researcher was allowed to
establish a linear regression model using SPSS program as the assumptions were verified.

65. 50
Table 4. 24: Coefficients used to predict quantity of cement and ASCC in the region
Model Coefficients
Constant 822.629
Aggregation of supply cost of cement in EAC 29.73
Durbin-Watson 1.402
.
a. Dependent Variable: Quantity EAC aggregation
Source: Primary data
From the table 4.24, the researcher found that Durbin-Watson equals to 1.402,this implies
that there is a positive autocorrelation between quantity of cement and aggregation
quantity of cement. The table 4.24 indicates that if supply cost of cement in EAC
increased by one, the quantity of cement increased by 29.730.From the above information
the research formulated linear equation of quantity of cement and supply cost of cement;
Ys = 822.629 + 29.730Xs (1) where; (1) indicates the relationship between the aggregate
of quantity of cement in the region and aggregate supply cost of cement in the region, Xs
is aggregate supply cost of cement in the region
Table 4.25: Coefficients used to predict quantity of cement and DPC in Rwanda
Model Coefficients
Constant -291.525
Demand price EAC aggregation 31.78
Durbin-Watson 2.914
a. Dependent Variable: Quantity EAC aggregation
Source: Primary data
The table 4.25 confirmed that quantity demand of cement is correlated to the price of
cement in Rwanda. The table 4.25 indicated that intercept of linear equation from given
data is -291.525 and slope is31.780. Hence the researcher gets equation;

66. 51
Yd= -291.525 + 31.780Xd(2),
where (2) is the equation establishing the relationship
between the aggregate of quantity of cement from the region and price of cement in
Rwanda, Xd is price of cement in Rwanda.
According to Nagurney (2002), the price of commodity is optimal in the region if and
only if there is equilibrium between demand and supply, this equilibrium if and only if
demand price equals cost of supply plus transportation cost . Hence, in this research;
Ys= Ydi.e 822.629 + 29.730Xs = -291.525 + 31.780Xd, where Xd = transportation cost
(45) + Xs (3)
i.e822.629 + 29.730Xs = -291.525 + 31.780(45 +Xs )
i.e 822.629 + 29.730Xs = -291.525 + 1430.1 + 31.780 Xs
i.e 822.629 - 1138.575 = 2.05 Xs
i.e-315.946 = 2.05 Xs
i.eXs = $ 154.12 (4)
(4) in (3), we get Xd = 45 + 154.12 = $ 199.12
Hence, the optimal price of cement in Rwanda should be $199.12 per ton if supplying
cost is $ 154.12 per ton in the EAC region.

67. 52
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMANDATIONS
5.0 Introduction
This chapter focuses on summary, conclusions, and recommendations. It highlights
summary of findings according to three research objectives, conclusions where the
researcher answer the research questions, recommendations and ends with suggestions for
further study.
5.1. Summary of findings
This study carried out on East Africa Community and trader‟s welfare. The problem
statement was related to the price of cement in Rwanda which is highest in EAC region.
The study identified the different factors that facilitate region members in trading on the
basis of optimal price and quantity demand; it also assessed the different approaches used
by region members to achieve their goals regarding trading and then it established the
correlation of regional trade integration and citizens wealth using price, cost and quantity
demand of cement in the regional members. To establish the correlation between EAC
regional trade integration and welfare of Rwanda traders, the researcher used primary
data from Rwanda cement traders and MINEAC‟s employees. Also, the researcher used
secondary data regarding the price, cost and amount of quantity of cement from
MINEAC.
5.1.1. Factors facilitate EAC members in regional trade
Elimination of Non-tariff barriers is a key factor of success of EAC to have optimal price
and quantity of cement in the region. The researcher found that 85.2 % of respondents
accepted that elimination of Non-tariff barriers are one of the factors that facilitate trade
of cement in EAC region. Exchange rate is one of the obstacles faced by regional trade,

68. 53
because 100 % of respondents said that exchange rate in EAC region did not facilitate
region members in trading on the basis of optimal price and quantity demand of cement.
The EAC citizens have some similarities concerning their culture. The reason why culture
is among the factors facilitates EAC trade, in general 85.2 % accepted that culture of
EAC citizens‟ is among of the factors facilitate region members in trading. The different
production cost of cement in EAC region improves the competition in the region. And
then that competition influence the quality, quantity and price of cement in the regional
trade. The researcher found that 85.2 % of respondents confirmed that different
production cost of cement facilitate region member‟s trade.
5.1.2 Approaches used by region members in trade
East Africa Community focuses on security community as a tool of attracting investors in
the region. The researcher found that, 80.8% of respondent accepted that security
community is among the different approaches used by EAC members to achieve their
goals regarding cement trade in the region.
Free movement of goods is one of the success stories of one side of the EAC project. It
has helped to build the internal market from which citizens and businesses are now
benefiting. Many of the major restrictions on the free movement of goods have now been
removed. As free movement of goods and service facilitate time savings in regional
businesses, East Africa Community could use this approach in order to attain the goal
regarding to trade in the region. The researcher found that, 75.3 % of respondents
confirmed that free movement of goods id better approach used by EAC trade.
The quality of infrastructure facilitated the performance of EAC members in terms of
trade. Hence, 100% of respondents confirmed that building quality of infrastructure is
among the approach used by EAC members in order to promote regional trade. The

69. 54
majority of respondents (92.2 %) said that remove road blocks is not among of the
approaches used by EAC members for achieving their goal regarding regional trade.
5.1.3 Relationship between EAC and welfare of traders
The third objective of this study intended to establish the correlation between EAC
regional trade integration and welfare of Rwanda traders. Using primary data and Pearson
correlation coefficient, the research found that the correlation between EAC integration
and Rwanda traders‟ welfare indicated by correlation coefficient (r) equals to 0.402.
Hence, EAC integration is positively correlated to Rwandan traders‟ welfare . This was
confirmed by the perception of respondents on the benefits that Rwanda traders get from
EAC. Industrial specialization and investment facilitations attract investors in the country,
and then high level of competition in Rwanda facilitates traders to benefit the quality of
products on the optimal price of cement. Integration of Rwanda in EAC region facilitates
the improvement of production and availability of quantity of cement. This research also
analyzed secondary data using simple linear regression analysis and found the
relationship between quantity demand of cement and aggregation of supply cost of
cement in EAC region. It also found the relationship between quantity demand of cement
and price of cement in Rwanda. Hence, the researcher found two equations such as
Ys(relationship between quantity of cement and aggregate supply cost in the EAC region)
= 822.629 + 29.730Xs and Yd(relationship between quantity of cement and price of
cement in Rwanda) = -291.525 + 31.780Xd, from these two equation this research found
that the optimal (affordable) price of cement in Rwanda should be be $ 199.12 per ton, if
supply cost of cement is $ 154.12 per ton in the EAC region and transportation cost is
$45 per ton.

70. 55
5.2. Conclusion
This subsection is classified according to the research questions;
According to the first research question, the researcher concluded that the factors
facilitate EAC members in trading on the basis of optimal price and quantity demand
were Non-tariff barriers, Exchange rate and Culture.
According to the second research question, this research concluded that the approaches
used by EAC regional members to achieve their goals regarding trade were Security in
the region; in this case we can say the establishment of East Africa standby force ; free
movement of goods and people, in this case we can say the use of ID in Kenya, Uganda
and Rwanda and Building quality of infrastructure. Whereby, the railway project is
expected to change the region‟s economic landscape by providing efficient and cost
effective rail transport for both freight and passengers. It is intended to reduce the cost of
doing business by reducing the cost of transport among the countries served by the
Northern Corridor
According to the third research question, using linear regression and Pearson correlation
coefficient, the researcher found that there is a positive relationship between cost of
quantity supplied and price of cement in Rwanda. Hence, EAC integration has a positive
effect on welfare of Rwanda traders, whereby using perception and opinion of
respondent, this research conclude that EAC integration influence Rwanda traders‟
welfare on the rate of 40.2%. And then, using secondary data and simple linear regression
analysis, this research concluded that there is a significance and positive relationship
between quantity of cement in EAC region and price of cement. From this relationship,
this research found and suggested the optimal (affordable) price of cement in Rwanda.

71. 56
Finally, the entrance of Rwanda in EAC is a key of business success in Rwanda, because
of the improvement of competition, availability of quantity of products needed and
affordable price of the product. East Africa Community has a positive effect on individual
life conditions, but there are some obstacles that citizens should meet during their
business activities, like high competition between large and small businesses in the
region.
5.3. Recommendations
Even if this research found that EAC integration has a positive effect on welfare of
traders in Rwanda, this research recommends Rwandan traders, government of Rwanda
and MINEAC members as follows:
5.3.1 Rwandan traders
There is a high competition in the region, thus Rwandan traders need high skills regarding
business and competition. And then, the level of cement production in Rwanda is still
low, there is one company produces cement in Rwanda called CIMERWA. Therefore,
Rwandan traders should invest in cement industry in order to improve the level of
production and export of cement in the region.
5.3.2 Government of Rwanda
The country should try to provide incentives to producers within the country for
improvement of production and promotion of quality products through technical and
organizational innovations to enhance the competitiveness of Rwanda‟s industries on the
world market by exposing them to competition within the regional economic integration,
and to create an environment which is conducive to foreign direct investment in the
country.

72. 57
The price of cement in Rwanda is still highest in the region, thus there is a need of
removing some barriers rather than tariff and facilitate the level of production in Rwanda.
Rwanda should ensure that small and medium-sized enterprises have an equitable
opportunity to participate in the regional economic integration. Rwanda should mobilize
the citizens towards a good understanding of the Integration of Rwanda in the EAC.
Government of Rwanda should mobilize its citizens about the benefits that they could get
from EAC integration as they are interested in international trade
5.3.3 EAC members
Road-blocks are still problem in EAC member‟s trade. Thus, there is a need of other
requirement and agreement in order to well implement the plans which have been
established by EAC members for all sides. Exchange rate is a strong obstacle in the
region; hence there is a need of implementing the use of single currency payment in EAC
members in order to have the same price of product in the region.EAC members have to
increase the level of mobilization in order to commutate EAC plans to its member‟s
citizens and other stakeholders. EAC do not implement their plan in the same way. Thus,
there is a need of strong leadership in EAC members. Elimination of Non-tariff barriers is
a key factor of success of EAC to have optimal price and quantity of cement in the region.
5.4. Suggestions for further study
The researcher suggested the following areas as necessary for future research in order to
improve the awareness of East Africa Community citizens and the benefits have from
EAC .Future researchers should look into other areas in which EAC is important to the
education rather trade. Future researcher should also look into the benefits that
accumulate from increased institutional competitiveness in the region. This provides the
institution with valid reasons for striving to increase competitiveness. And then future

73. 58
researchers should carry out a researcher on EAC and trade, but they should focus on
other areas like petroleum.

74. 59
REFERENCES
Acean. (2010). Non-Tariff Barriers. Association of Southeast Asian Nations, Journal,
vol.4, PP. 390 -405.
Anielski, M. (2003). Measuring the Genuine Wealth of Communities Accounting for That
Which Makes Life Worthwhile. Anielski Management. journal, vol. 6, pp.15 - 25.
Baldwin, R. E. (1976). The Political Economy of Postwar U.S. Trade Policy. New York :
Graduate School of Business Administration /New York University.
Beghin, J.& Bureau, J.C. (2001). Quantitative Policy Analysis of Sanitary . Economie
internationale, vol.87, pp.107-130.
Currency Union Technical Expert Group [CUTEG]. (2005, May). Definition of economic
unions. Currency union journal, pp.2 - 5.
East Africa Community [EAC]. (2001). Treaty Establishing the EAC. East Africa
Community.
East Africa Community[EAC]. (2006). Assessing regional integration in Africa. Addis
Ababa - Ethiopia: East Africa Community.
East Africa Community[EAC]. (2011). EAC development strategy (2011/12 – 2015/16).
Arusha.
Edward & Milner. (2002). The New Wave of Regionalism. International Organization
journal, pp.589 - 627.
Edward, K. (2010). Customs and trade facilitation in the East Afrca Community (EAC).
World Customs Journal , Vol. 2(1), pp. 63 -71.
Engel & Rogers. (1996). How Wide is the Border. American Economic Review, vol.86,
pp.1113 - 1125.
Garcia, H. A. V. Gaspar, L. Hoogduin, J. Morgan & Winkler, B. (2001). Introduction in
Why Price Stability . Geneve: European Central Bank.
Grinnell, R. M. Jr. &Williams M. (1990). Research in social work. USA: Peacork.

75. 60
Griswold, D. (2005). Free Trade, Free Markets Rating the 108th Congress. American
Trade policy ournal, pp.50 - 65.
Haas, E. (1970). The Study of Regional Integration: Reflections on the Joy and Anguish
of Pretheorizing. International Organization, vol. 24, pp. 607 - 644.
Katembo, B. (2008, University of Jacksonville). Pan Africanism and Development:The
East African Community Model. The Journal of Pan African Studies, Vol.2(4), PP.
107 - 116.
Kibret, H. & Alemayehu. (2002). Regional Economic Integration in Africa A Review of
Problems and Prospects with a Case Study of COMESA. The Economic Journal,
Vol.2(3), pp.1-25.
Mahé, L. (1997). Environment and Quality Standards in the World Trade Organization:
New Protectionism in Agricultural Trade? . A European Perspective, vol.2, pp. 480
- 503.
Mark, A.& Ilse, S. (2008). Modeling of Banking Profit via Return-on-Assets and Return
on-Equity (Vol. vol.2). London - UK, UK: World Congress on
Engineering(WCOE).
Ministry of commerce [MINICOM]. (2013). MINICOM Annual Report 2012/13. Kigali:
MINICOM.
Nali, Lijun, C.& Steven, H. L. (2002). Optimal Demand Response Based on Utility
Maximization in Power Networks. Engineering & Applied Science journal, vol.4,
pp.453 - 463.
Nagurney, A. (2002). Spatial Price Equilibrium. Isenberg: University of Massachusetts.
Organization for Economic Co-operation and Development[OECD]. (2005). Regional
integration agrrements. Paris - France: Organization for Economic Co-operation
and Development.
Ozan, C., Kostas B. & Ozdaglar. (2005, August). Optimal Pricing in Networks with
Externalities. Journal of Operations research, pp. 883–905.

76. 61
Philippe, D., Giulia, P. & Chatrini, W. (2008). Systems of Indicators for Monitoring
Regional Integration Processes: Where Do We Stand? The Integrated Assessment
Journal, Vol. 8, pp.39 - 67.
Rajasekar, S.P., Philominatha, V. & Chinnathambi. (2013). Reaserch method. Tamilnadu
- India: Bharathidasan University.
Randall, G. H. and James, D. G. (2010). Union,economic freedom and growth. Cato
Journal, vol. 30(1), pp.1 - 21.
Rwanda development [RDB]. (2013). Steel Product Manufacturingin Rwanda. Kigali :
Rwanda Development Bord(RDB).
Sangeeta, Kato, K.& Nicholas, P. (2007). tariff reductions under the East African
Community Customs Union: Intra-trade effects on Uganda. Sao Paulo - Brazil:
Aberystwyth University .
Shaista,W., Hanimas A.& Ahmad T. (2013). profitability of Islamic Banks in Malasia: An
empirical analysis. journal of Islamic Economics, pp.54 - 68.
Tongco & Dolores. (2007). Purposive Sampling as a Tool for Informant Selection. A
journal of plant, pp.147 - 158.

77. 62
APPENDICES

78. 63
Authorization Letter

79. 64
Letter from MINEAC

80. 65
Letter to MINEAC

81. 66
Table 26: Data used to establish linear regression models
2001 220 240 6800
2002 220 240 7300
2003 180 200 6500
2004 160 180 4800
2005 320 340 10700
2006 220 240 7300
2007 170 190 5200
2008 170 190 5500
2009 180 200 5500
2010 170 190 6100
2011 150 200 6300
2012 170 190 7200
2013 240 260 7900
Source: Secondary data
Table 27: Test of normality
Descriptive
Aggregation of supply cost of cement in EAC Statistic Std. Error
Quantity of cement
EAC aggregation
170 Mean 6000.0000 441.58804
95% Confidence
Interval for Mean
Lower Bound 4594.6698
Upper Bound 7405.3302
5% Trimmed Mean 5977.7778
Median 5800.0000
Variance 780000.000
Std. Deviation 883.17609
Minimum 5200.00
Maximum 7200.00
Range 2000.00
Interquartile Range 1650.00
Skewness 1.057 1.014
Kurtosis .448 2.619
Source: Primary data

82. 67
Research Questionnaire
Dear Respondent,
I am HABIMANA THEOGENE, MBA student at Mount Kenya University. I am
currently carrying out a research on the topic “East Africa Community Integration and
Rwanda traders‟ welfare” as part of my course requirements, it is a purely academic
questionnaire and I kindly request you to spare few minutes of your time and express
your views on the questions below, your answers were treated with greatest confidence.
I. QUESTIONS REGARDING PERSONAL IDENTIFICATION
1. Gender
Male Female
2. Level of education
University Secondary Primary No-formal
3. How old are you?
Less than 21
years
21 – 25
years
26 – 30
years
31– 35
years
>35
4. How long have you experienced with cement trade in EAC especially in Rwanda?
Less than 2 years 2 – 4 years 4 – 6 years Above six years
II. EAST AFRICA COMMUNITY INTEGRATION QUESTIONS’
5. Do the following Factors facilitate region members in trading on the basis of
optimal price and quantity of cement?
a) Elimination of Non-tariff-barriers Yes [ ] No [ ]
b) Rate of exchange Yes [ ] No [ ]
c) Free-trade area Yes [ ] No [ ]
d) Customs union Yes [ ] No [ ]

83. 68
e) Level of Literacy Yes [ ] No [ ]
f) Culture Yes [ ] No [ ]
g) Different production cost of cement Yes [ ] No [ ]
h)
6. What are the different approaches used by EAC members to achieve their goals
regarding cement trade?
a) Security community approach Yes [ ] No [ ]
b) Free movement of good and people Yes [ ] No [ ]
c) Building quality infrastructure Yes [ ] No [ ]
d) Remove road blocks Yes [ ] No [ ]
e) Mobilization Yes [ ] No [ ]
7. The benefits Rwanda country targets from EAC
Please, choose one;
a) Regional security [ ]
b) International security [ ]
c) Industrial specialization [ ]
d) Investment facilitation [ ]
e) Increased competition [ ]
8. Do you think that the integration of Rwanda in EAC influence positively the price of
cement in Rwanda?
a) SA [ ]
b) A [ ]
c) D [ ]
d) SD [ ]
9. Do you think that the integration of Rwanda in EAC promote the quantity of cement
needed in Rwanda?
a) SA [ ]
a) A [ ]
b) D [ ]
c) SD [ ]
10. According to your individual life conditions, is it good or bad to be an EAC citizen?
Good [ ]