Africa: Framework Set to Create a Common Market Between EA –SA States
By Staff Writer
JOHANNESBURG---African leaders from 26 countries in Southern and East Africa Sunday at a meeting in Johannesburg accorded to extend this zone of free trade throughout the eastern half of the continent. They discussed about creating a huge common market that would include South Africa, the continent’s economic giant, who recently joined the group of BRICS.
The objective of these negotiations is the creation of a vast free trade bloc, encompassing the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC), three groups that overlap in part and whose gross domestic product reached $ 875 billion (597 billion euros). The proposed tripartite free trade zone was approved at a first conference in October 2008 in Kampala.
The bloc aims to enhance connectivity among the nations and reduce costs of doing business, while increasing investment flows to address capacity constraints.
According to estimates,the gross domestic product of the "Tripartite" is between 875 and 1,000 billion dollars. From Cape to Cairo, according to the old dream of Cecil Rhodes, British politician, the "tripartite free trade area" will include South Africa and Egypt, the most developed economies of the continent, but also those that are growing quickly, including Angola and Ethiopia.
"It is now well documented that regional integration is one of the four factors that have sustained Africa's growth in the last decade, as well as the quick and robust recovery from the recent financial crisis," said Eratus Mwencha, the deputy chairman of the AU Commission.
Mswati III, Swaziland's King , who chairs the COMESA said that the time is ripe to bring these organizations to form a major economic power and increase trade between African countries. He added that the negotiations that will take place will let other African countries the opportunity to join the bloc.
Concretely, African leaders have not yet set a date for the implementation of their common market. The "road map" they adopted on Sunday provides, for the moment, three years of negotiations. They also stressed the need to strengthen infrastructure, and called on donors to help build east-west corridors having reinforced the north-south corridor launched in 2009 at a conference in Lusaka.
The International Monetary Fund expects Africa to grow faster than the global average in the coming years. Six of the world's 10 fastest-growing economies were on the continent last year.
New World Bank research says trade within southern African accounts for just 10 per cent of the total in the region - compared to 60 per cent in Europe and 40 per cent in North America.
SADC exports increased from 20 to more than 30 percent of combined GDP over the past decade, but regional trade made up a mere three percent of the increase.
In July 2010, the East African Community (EAC) launched the first common market in Africa. This example of unparalleled economic integration in Africa has helped establish the free movement of persons, goods and capitals between Kenya, Tanzania, Uganda, Burundi and Rwanda.
Today, it is imperative for African countries to promote their products if they want to conquer markets inside and outside the continent. The valuation of these products may, indeed, make the trade in the region easier, allowing countries to have more revenue to support the development of Africa.