COMESA: Stimulating Intra-Africa Trades is Key

COMESA COMESA says that Collaboration between neighboring African countries by removing both tariff-and non-tariff-based trade barriers including lengthy and inefficient exporting and importing procedures will facilitate greater foreign investors in Africa.

Speaking at the AGOA business forum in Lusaka on 8th June 2011, COMESA director of Investment Promotion and Private Sector Development, Dr. Chungu Mwila said that the exports to the United States could be supported only if African states look towards increasing the amount of goods and services that they trade with each other.

Dr. Mwila said that African states should find out why intra-African state trade is not taking-off to the extent that it should and also look at what can be done by the private sectors to ensure that more trade takes place and to mitigate the risks of greater intra-regional Trade.                                                                         

Dr. Mwila pointed out several reasons for promoting intra-Africa trade which include, among others the following:

  • Promote economic growth
  • Create an internal market
  • Create synergies and complementarities
  • Enhance consumer benefits
  • Reduce cost of production

He said that Intra Africa trade is being promoted mainly through regional integration/trading blocs or Regional Economic Communities, such as COMESA, EAC, SADC, ECOWAS, ECCAS, etc, all coordinated under the auspices of the African Union (AU) – the creation of an African economic community being the ultimate objective or vision.

The director however pointed out that the Major concern in spite of region having taken root in Africa, intra Africa trade is dismal, ranging between 5 to 12 per cent while in some cases, extra or international trade is in excess of 80 to 90 per cent.

Dr. Mwila further outline the achievements that COMESA has scored in the past from the establishment of the Preferential Trade Area PTA in 1982 to the projected Business forum to be held in Malawi in October 2011.

The Case of COMESA

1982    Establishment of a Preferential trading Area (PTA): extending of trade preferences
2000   A Free Trade Area is established, the first ever in Africa: zero tariff and quota free, but application of rules of origin.
2009    Customs Union declared and a road map of getting there agreed upon
2008    October, in Kampala, Uganda, first Tripartite discussions held at the Summit level of COMESA, EAC and SADC on the formation of a Grand FTA of 26 African countries, infrastructure and energy
2011    June, Johannesburg, South Africa, follow-up Tripartite Summit

Intra COMESA trade being promoted through a number of measures, among which are the following:

  • Regular monitoring of Non-tariff barriers to reduce cost of doing business, but also to ensure smooth flow of goods  e.g. elimination of export and import permits for certain goods
  • Trade Facilitation  implemented through a number of measures, such as
    • Third party insurance or yellow card
    • The Regional Customs transit guarantee scheme
    • Use of one COMESA Customs  Document
    • Promoting cross border trade through a Simplified trade regime US$ 500
    • One Border post at Chirundu (Zambia and Zimbabwe) and soon at Kasumbalesa and Malaba
  • Trade in Services, or regional trade in services
    • Transport, communication, financial, education and health and tourism
  • Complementary/accompanying Programmes
    • Standardization and Quality Assurance
    • CAADP Compacts and Investment Programmes
    • PACT II.. Building African Capacity for trade
  • Institutional support
    • PTA Bank
    • ATI
    • Regional Payment and Settlement System (REPSS)
    • ZEP_RE, etc

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