Having put in place several institutions for boosting intra-regional trade,
the Common Market for Eastern and Southern Africa (COMESA)
is making every effort to remove fears of lost business
and unfair competition among its membersThe 20-member country trading block is the largest grouping in Africa now issuing its own certificate of origin. The block was established to embark on trade liberalisation, intra-regional trade integration, and a tariff reduction programme to boost trade and the free flow of capital, goods, services and labour among members. It fits in well with the concept of globalisation.
The removal of duty to ensure the smooth passage of goods, was deemed the practical way to boost trade in the region, while also enhancing competition and offering manufacturing companies a wider export market both within the region and internationally.
In October 2000, COMESA which includes some countries from the 14-nation Southern Africa Development Community (SADC), launched the Free Trade Area (FTA) initiative to remove all tariff and non-tariff barriers for effective trading activities accompanied by tariff reduction, and ultimate zero tariff status.
Countries which have so far joined the FTA from COMESA‘s member countries, are: Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia, Zimbabwe. Those COMESA countries outside the FTA are Angola, Burundi, Comoros, Congo RDC, Eritrea, Ethiopia, Namibia, Rwanda, Seychelles, Swaziland, and Uganda.
Complaints
The FTA‘s move has made many countries with nascent industries uncomfortable, as they complain that their countries are subject to an influx of cheap, low quality goods. They also claim that there is unfair competition, whereby richer countries with more developed industries, can benefit from favourable trading terms. They also fear for a loss in revenue, due to their own markets being taken over by more industrialised neighbour’s products.
COMESA‘s secretary-general is Dr Erastaus Mwencha. He is based at the central office in Lusaka, Zambia. He is occupied with trying to persuade members of the SADC which are not COMESA members, to join COMESA. «After all», he says, «they have much to benefit from the larger market offered by COMESA». He is also trying to enlarge COMESA‘s Free Trade Area. «The FTA enhances efficient attraction of resources and fosters overall economic efficiency by promoting competition. It also offers opportunities for industries to tap into such sources as raw materials and other products. Since the launch of the FTA, trade has been boosted by 20%, according to figures from the Lusaka office.
At a consultative Workshop in Malawi, Charles Chanthunya, COMESA‘s director for trade and customs quashed claims of lost revenue saying that so far, COMESA has not received any such reports from member countries. He advised Malawi which is planning to withdraw from COMESA, that the country is already benefiting from her opened-up sugar export markets to Kenya and Egypt. «The concern about lost revenue is baseless. And rather than duplicating SADC, both COMESA and the SADC complement each other’s roles. COMESA certificates of origin are currently the only ones issued in trading activities in Africa, which is a big incentive,» he said.
Frequently cited as major achievements are the establishment of the Comesa Bankers Association, the PTA Bank which has a revolving fund of $50 million, and the Africa Trade Insurance Agency (ATIA) aimed at protecting investors from political risks and wars in Africa.
In another ambitious move, COMESA has announced plans to harmonise customs operations by means of the Regional Customs Bond Guarantee (RCBG). This is due to be launched next year. The RCBG is intended to facilitate the forwarding and transportation of goods across the region. The RCBG had already been mooted in 1990 but could not take off due to a lack of operational mechanisms.
Manufacturers in COMESA are urged to produce high quality goods. Governments must encourage the private sector and facilities must be established for the efficient production of high quality products to compete on the international market.
- Hobbs Gama, Malawi, September 2002 — © Reproduction authorised, with usual acknowledgment