. Ngwenya
By MAIMBOLWA MULIKELELA –
THE Common Market for Eastern and Southern Africa (COMESA) has been a trendsetter in promoting regional integration over the last 20 years.
This is despite trade imbalances among African countries that have emerged through various hurdles like the effects of Non Tariff Barriers (NTBs).
COMESA was founded in December 1994 when it replaced the Preferential Trade Area (PTA) which had existed since 1981.
COMESA was set up as an organisation of sovereign states which agreed to cooperate in developing their natural and human resources for the good of citizens in the member states.
COMESA had to focus on the formation of a large economic and trading unit that was capable of overcoming some of the trade barriers within the region.
With its 19 member states, population of more than 389 million and annual import bill of around US$32 billion with an export bill of US$82 billion, COMESA forms a major market place for both internal and external trading.
Therefore, it is important to mention that the Free Trade Area (FTA) was achieved on October 31, 2000 when nine of the member states namely Djibouti, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe eliminated their tariffs on COMESA originating products, in accordance with the tariff reduction schedule adopted in 1992.
This followed a trade liberalisation programme that commenced in 1984 on reduction and eventual elimination of tariff and the NTBs to intra-regional trade. Burundi and Rwanda joined the FTA on January 1, 2004.
COMESA also spearheaded the formation of the Customs Union, in which customs duties and other measures that restrict trade were eliminated for substantially all trade within the merged territory.
The territories, in turn apply the same duties and measures in their trade with third parties.
It is against this background that COMESA boasts of the largest Free Trade Area (FTA) in Africa with 17 participating states.
To this effect, COMESA has spearheaded the morphing of FTA into the 26 member Tripartite FTA.
Democratic Republic of Congo (DRC) Minister of Communication and Transport Kalumba Mwana-Ngongo pointed out that COMESA is able to stand out on the continent because it is able to facilitate transit traffic, infrastructure and transport corridor development, payments and free movement of persons in the region.
“Our integration agenda is the least costly in terms of contributions by member States, easily giving it the highest return on investment compared to others.
We are leaders on the continent in new areas like climate change where we are collectively shaping the African common position in global negotiations.
Our stable robust and viable institutions are the envy of many as evidenced by the fact that quite a number of them are now offering their services to the rest of the African continent and beyond,” he explained.
It is highlighted that the programmes continue to expand in number and scope, thanks to the commitment of the member States and increasing confidence of development partners in what COMESA is doing.
COMESA was witnessing significant cross-border investments by regional and international investors, adding that the fundamentals of the Common Market had now been set and benefits were trickling in.
“We have learnt many lessons along the way. The biggest lesson is that the fears expressed by some at the beginning did not materialise. The benefits of regional integration do not go to the biggest or strongest, but to those that prepare and organise themselves to maximise benefits,” he added.
Commenting on the COMESA 20th anniversary, the regional bloc’s secretary general Sindiso Ngwenya noted that over the two decades the organisation has implemented a range of programmes that are designed to transform it.
From being a regional bloc, it will be fully integrated, internationally competitive and unified single economic space within which goods, services, capital and labour are able to move freely across national frontiers.
Thus, the programme of cooperation aims to achieve the removal of all physical, technical, fiscal and monetary barriers to intra-regional trade and commercial exchanges.
“We are proud to state that COMESA is leading in the development of trade facilitation programmes aimed at reducing the cost of doing business.
” Beyond trade liberalisation and facilitation which are the flagship programmes, COMESA is about structural transformation of our economies, re-engineering them so that they become integrated on the basis of industrialisation, on the basis of national, regional and global value chains,” Mr Ngwenya said.
Suffice to say that in the year 2000 when COMESA launched Africa’s first FTA, intra-COMESA trade stood at US$2.3 billion and by 2013 it had dramatically grown to US$ 20.9 billion.
The region has also witnessed increased cross border investments in manufacturing, infrastructure and service provision.
Currently we have seen COMESA develop innovative trade facilitation tools that are transforming the nature of conducting business.
The COMESA Yellow Card, the Regional Customs Transit Guarantee Scheme, the COMESA Virtual Trade Facilitation System, COMESA Electronic Market Exchange System are some of the trailblazing innovations of the organisation.
To further demonstrate the effectiveness and contribution of the organisation one can cite the impact of the COMESA Competition Commission (CCC).
The CCC handled and approved within one year of its existence, US$13 billion of cross border mergers and acquisitions that resulted in the creation of more jobs and new technology transfers.
Further, COMESA has created several institutions to promote sub-regional co-operation and development.
In addition a Court of Justice was also established under the COMESA Treaty and became formally operational in 1998.
Further initiatives exist to promote cross border activities, form a common industrial policy to the introduction of a monetary harmonisation programme.
On the other hand, Standard Chartered Bank has pledged to support the objective of COMESA by ensuring that its desired growth was achieved.
“We have a long standing relationship with COMESA and will work together and support its objective in terms of growing the market and building infrastructure, helping to creating jobs across the continent,” Standard Chartered Bank chief executive officer Andrew Okai said.
PTA Bank president Admassu Tadesse said the Bank joined in celebrating the 20 years of existence in recognition of the growth of regional integration, high levels of investment and high standards of living.
“We are celebrating not just decades of existence tonight we are celebrating the relevance of our region, the growth of integration,the great excitement of the world in our region with high levels of investment and high standards of living,” Mr Tadesse said.
Currently, PTA Bank has an asset base of US$3 billion. ZEP-RE (PTA Reinsurance Company) country manager Shipango Muteto said his firm had set aside US$15 million to construct its regional headquarters in Zambia.
Mr Muteto said the funds would soon be made available to put up a regional office institution.
The company has invested in Tanzania and Uganda saying this demonstrates the participation and furtherance of regional integration.
The growth path for COMESA has taken 20 years of toiling but the regional body has now found its footing and remains set to continue its journey towards regional integration.
