by Kizito Sikuka in Gaborone, Botswana – SANF 15 no 36
Southern Africa has made significant progress in reforming regional trade to ensure that countries in the region trade more among themselves.
Increased intra-regional trade among member states of the Southern African Development Community (SADC) is critical as it allows the region to fully benefit from its own resources and develop its economy.
According to latest figures released by the SADC Secretariat, intra-regional trade in SADC has increased from US$89.3 million in 2001 to US$394 million in 2012, representing a 341 percent increase over an 11-year period.
SADC Director of Trade, Industry, Finance and Investment, Boitumelo Gofhamodimo told journalists ahead of the 35th SADC Heads of State and Government Summit that opens on 17-18 August in Gaborone, Botswana that the increase has been achieved through the implementation of various strategies and programmes.
One such strategy is the implementation of the Protocol on Trade, which resulted in the creation of a Free Trade Area (FTA) in 2008.
The establishment of an FTA saw the removal of non-tariff barriers among SADC countries. In the past, regional countries imposed non-tariff barriers among themselves, making it very difficult for them to trade.
Another key intervention implemented by SADC is infrastructure development to allow for the smooth movement of goods, services and people across the region.
This is in light of the fact that most infrastructure such as road and rail built during the colonial era did not allow smooth movement of goods, services and people between SADC countries, prompting countries in the region to trade more with the outside world than among themselves.
“The attainment of an FTA in 2008 has had a positive effect on regional trade,” Gofhamodimo said, adding that SADC should continue to build on the next stages beyond the FTA.
For example, SADC aims for a Common Market by 2015, Monetary Union by 2016, and an
Economic Union with a single currency by 2018.
While the timelines for these targets may not be met due to various challenges, the momentum to boost integration and socio-economic development should be maintained.
Gofhamodimo also urged countries to diversify their goods and add value before exporting.
Such value addition could be achieved through the implementation of the recently approved Industrialization Strategy and Roadmap.
“Most of the exports are in primary commodities, highlighting an urgent need to diversify and improving the productive capacity of the economies of the region,” she said.
She said it was pleasing to note that while intra-SADC trade is on the increase, trade between SADC and the rest of the worked is also on the rise, particularly with news initiatives such as the Tripartite FTA involving the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC).
COMESA-EAC-SADC launched an enlarged market in June covering 27 countries in eastern and southern Africa.
The Tripartite FTA creates a combined population of some 600 million people covering half of the member states of the African Union (AU) and a Gross Domestic Product (GDP) of about US$1 trillion.
The enlarged market aims to promote the smooth movement of goods and services across borders, as well as allowing member countries to harmonize regional trade policies to promote equal competition.
A total of 16 countries have signed the agreement to establish the Tripartite FTA, eight of them from SADC — Angola, Democratic Republic of Congo, Malawi, Namibia, Seychelles, Swaziland, the United Republic of Tanzania and Zimbabwe.
The remaining countries requested more time to complete their internal processes before signing the document.
Gofhamodimo said one of the priorities for SADC over the next few months is to finalize all the outstanding issues to establish the enlarged FTA.
In addition, SADC has also started negotiations for the launch of the Continental FTA. Africa aims to launch a Continental FTA by 2017.
The establishment of the Tripartite FTA by COMESA-AEC-SADC is thus a decisive step to achieve the African vision of establishing the African Economic Community as agreed in the Lagos Plan of Action and the Final Act of Lagos of 1980, Abuja Treaty of 1991 as well as the Resolution of the African Union Summit held in Banjul, the Gambia in 2006.
On the SADC Regional Development Fund and Project Preparation and Development Fund (PPDF), Gofhamodimo said a consultancy has been engaged “to look at issues of capitalization by different stakeholders, implications on shareholding in the fund”, as well as the appetite of the private sector to participate in regional development.
The PPDF is aimed at creating a conducive environment for investment through financing the preparation of infrastructure projects based in at least one SADC Member State or those with a direct and positive impact on another Member State.
The fund concentrates on those projects that are considered as enablers of regional integration providing technical assistance for project identification, preparation and feasibility studies as well as for advisory and capacity-building purposes that will lead to investment in projects.
The 35th SADC Summit is running under the theme “Accelerating Industrialization of SADC Economies, Through Transformation of Natural Endowment and Improved Human Capital.”
The theme continues the trajectory of the previous Summit held last year in Victoria Falls, Zimbabwe, which focused on economic transformation and sustainable development “through beneficiation and value addition”. sardc.net
