by Munetsi Madakufamba – SANF 08 No 54
The launch of the SADC Free Trade Area by southern African leaders this week marks the attainment of a major milestone in the regional body’s 28-year history.
Formed in 1980 and transformed in 1992 to the present Southern African Development Community (SADC), the regional organisation has embarked on several ambitious regional integration projects, covering areas such as trade, infrastructure, food security, human and social development, as well as politics, defence and security, all intended to bring about economic prosperity, peace and security to its 250 million citizens.
Trade has been singled out as the one intervention that has the greatest potential to make a dent on southern Africa’s biggest challenge – poverty.
The Windhoek Treaty of 1992 defined the current regional integration path while the overall regional integration programme is guided by two blueprints adopted in 2004 — the Regional Indicative Strategic Development Plan (RISDP) and the Strategic Indicative Plan of the Organ (SIPO).
The RISDP, which identifies poverty eradication as the overarching priority in SADC’s regional integration agenda, outlines the key milestones for economic integration.
Through the RISDP, SADC plans to create a Free Trade Area (FTA) in 2008, moving incrementally to establish a Customs Union in 2010, a Common Market by 2015 and a Monetary Union by 2016. A regional central bank and a common currency are expected in 2018.
Thus by launching the FTA on SADC Day, 17 August, southern African leaders did not only comply with set targets but demonstrated their readiness to deliver a better life to the millions of citizens as acknowledged by South African President Thabo Mbeki, who took over the rotating SADC chair at the two-day Summit in Johannesburg, South Africa.
“The masses of our people demand of us to do everything in our power to help pull the poor from the morass of wretchedness,” said President Mbeki.
“The challenge facing our region during this era is to do extraordinary things so as to build the Free Trade Area and consolidate its gains for the mutual benefit of the region’s economies and development,” added the South African president.
One of the challenges facing the region is infrastructure development. For example better road and rail networks are necessary to facilitate easier cross-border flow of goods and services.
While the FTA directly addresses the question of tariffs insofar as it allows for 85 percent of traded goods to be duty-free, Member States still need to tackle the challenge of non-tariff barriers such as restrictive entry border requirements which are counter to the spirit of free trade.
Other challenges are on the supply side of trade where the private sector would be called upon to improve productivity if they are to remain competitive on the regional market.
The private sector was represented by its apex body, the Association of SADC Chambers of Commerce and Industry (ASCCI), during the launch.
Competition from regional firms, while it may have negative implications on employment in smaller and weaker economies, is likely to bring in cheaper alternatives, from the consumer’s point of view.
SADC Member States are aware of the demands of an FTA.
“Summit called for the acceleration of interventions to further deepen the regional integration agenda through the development of a programme of cooperation aimed at expanding regional production capacity which entails provision and rehabilitation of regional infrastructure to facilitate efficient movement of goods and people in a more open economy,” reads part of the Summit communiqué.
The FTA has been made possible through the implementation of the SADC Trade Protocol whose implementation began in 2000.
To date, 12 out of 15 SADC Member States are applying the protocol meaning that as many as 170 million people in those countries will immediately benefit from the new economic dispensation.
Angola and the Democratic Republic of Congo (DRC) have asked for more time before they join the FTA. Seychelles, which rejoined SADC at the just-ended Summit, will soon be expected to go through the formalities of becoming a member of the FTA.
Member States would still be expected to harmonise their national trade policies with all the provisions of the Trade Protocol if the FTA is to be successfully implemented.
Other highlights of the Summit were the signing of the protocols on Gender and Development; Science, Technology and Innovation as well as agreements amending Article 20 of the Protocol on Trade; and Article 6 of the Protocol on the Tribunal and the Rules of Procedure Thereof.
The Summit elected King Mswati III of Swaziland as chairperson of the Organ on Politics, Defence and Security Cooperation while Mozambican President Armando Guebuza will deputise him.
The next Summit will be hosted by the DRC in 2009.
