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Why private sector is pushing for free trade among 26 African states
Publish Date: Jul 28, 2010
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By David Mugabe
Experts say free trade can reduce crossborder trariff structures by upto 80%

A GATHERING of Africa’s elite private sector has recommended that all the states across the EAC, SADC, and COMESA centralise issuance of certificates of origin so that they do not have to traverse all the states to get a license.

The private sector also implored governments across the continent to prioritise business ahead of politics to change the continent’s economic fortunes.

“It has been Africa’s history that we have been putting politics ahead of business for so long. Our enterprises must be competitive,” said Eyessus Zafu, president of the Ethiopian Chamber of Commerce and Sectoral Associations, at a top level summit comprising private sectors from the tripartite EAC, SADC, and COMESA at the Kampala Protea Hotel last week.

“We should never put private business in competition with state business; what else is there except fair competition?” asked Zafu.

If the East African Community (EAC), South African Development Cooperation (SADC) and Common Market for East and Southern Africa (COMESA) achieve a free trade zone by 2012 as expected, it will by any standard be one of the most powerful economic blocs with a combined Gross Domestic Product (GDP) of $625b.

Estimates show that exports among the 26 countries in the common market increased from $7b in 2000 to $27b in 2008, and imports grew from $9b in 2000 to $32b in 2008.

Experts from the International Trade Centre say a free trade zone can reduce cross-border tariff structures by upto 80%.

This would also galvanise Africa’s response to outrageous global economic patterns for which many times they are not responsible for but suffer the worst consequences- for instance the recent global economic meltdown.

The businessmen and women gathered in Kampala described the tripartite summit as an important milestone with important positions agreed upon.

Information available indicates that the summit agreed on harmonisation of trading arrangements among the three Regional Economic Communities (RECs), free movement of business persons and joint implementation of inter-regional infrastructure programmes as well as institutional arrangements on the basis of which the three RECs would foster cooperation.

The free trade dream was born in 2008 when the EAC, SADC, COMESA tripartite meeting was held in Kampala and the heads of state resolved that the three blocks that comprise some 530 million people across 26 states must have a free trade zone by 2012.

The dream is to ultimately attain an African Economic Community.
But the search for a free trade zone did not involve the private sector at the beginning. The Protea meeting convened by COMESA business council was, therefore, to involve the private sector.

Currently, COMESA has a customs union, EAC just opened up a common market, while the SADC has a free trade zone.

The private sector also emphasised strengthening Africa’s domestic investments base.

“As a matter of attitude, whenever we have the opportunity, we have to encourage competition in our domestic markets first then in our neighbours’ because then we shall have both the skill and muscle to compete,” said a private sector official.

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