One of the major problems facing African countries today is that of underdevelopment and dependency. The expectations that political independence of African countries will engender development soon became a mirage as disease, famine, lack of good accommodation and health care facilities became the lot of ordinary Africans. This informed the resurgence towards regional integration in Africa especially in the 1990s. The research therefore sets out to examine the newly formed African Union (AU) and its potentials towards the transformation of Africa. In a bid to achieve this, a background preceding the formation of AU is provided, the state of African economies which is rural in nature is established and the documentary method is used to gather data used for analyzing the problem. The research unveils the fact that virtually all African States are still heavily dependent on the export of a narrow range of primary commodities leading to weak linkages among various sectors that makes it difficult to build dynamic, self-reliant and socio-sustaining economies.