African Regional Groups Endorse Talks on Free Trade Area

Merowe Dam in Sudan where the largest source for electrical power is being constructed on the African continent., a photo by Pan-African News Wire File Photos on Flickr.

Africa: Continent Endorses Talks On Grand Free Trade Area

Faridah Kulabako
30 June 2011

Kampala — Africans stand to benefit from improved access to markets and access to cheaper goods and services following the signing of an agreement to launch talks on the continent's biggest free trade area.

African leaders, including President Yoweri Museveni, on Sunday (June 12), endorsed the agreement in Johannesburg South Africa to pave way for discussions on the creation of a continent's with a combined gross domestic product of approximately $1 trillion and a population of about 600 million people.

Adopted approach

The leaders adopted a developmental approach to the Tripartite Integration process that will be anchored on three pillars namely; the market integration based on the Tripartite Free Trade Area, infrastructure development to enhance connectivity and reduce costs of doing business as well as Industrial development to address the productive capacity constraints.

The proposed Grand Free Trade Area would merge three existing blocs including the Southern African Development Community (Sadc), the East African Community (EAC) and Common Market for Eastern and Southern Africa (Comesa).

The bloc would include 26 countries, stretching from Cape Town in South Africa to Cairo in Egypt. The integration is expected to help African countries improve their capacity to trade, increase investments on the continent and unleash the enormous economic growth and development potential of Africa.

Agent attention

Mr Mthuli Ncube, chief economist and vice-president of African Development Bank told delegates during a Tripartite Summit that urgent attention is needed to foster inclusive growth, improve political accountability and address the youth bulge.

King Mswati, leader of Swaziland and chairman of Comesa, said the trade agreement would bring bigger opportunities for the small, landlocked kingdom. "The integration of various regional blocs would no doubt improve trade within the African economies," King Mswati noted. "This cannot be achieved overnight; it could only be done in phases, as there is a lot of work that still needs to be done."

The idea for the formation of a free trade area among the three regional economic communities was endorsed during the first Comesa-EAC-Sadc Tripartite Summit held in Kampala in October 2008 to enhance cooperation and harmonisation of policies.

Burundi's president and chairman EAC Pierre Nkurunzinza noted that members are ready to negotiate a free trade zone within a period of three years.

"We have no right to delay the establishment of a tripartite free trade zone any longer," he said.

The move comes barely a year when the five EAC partner states launched the common market but traders are yet to realise the full benefits and economies of scale are of the common market. However, for the countries to reap the full benefits of the intended larger market, African governments need to address infrastructure challenges that constrain businesses.

Other challenges that need immediate attention are bureaucracy, corruption, weak supply chains and tariff barriers which also act as major barriers and unduly increase the cost of doing business among countries.