Together we are stronger

By Agnes Asiimwe

Tripartite Summit agrees to a free trade area from South Africa to Egypt

Twenty six African countries, a single market and open borders that allow persons to move across freely and conduct business. That was the vision of the Tripartite Summit that took place in Kampala last week. President Jakaya Kikwete of Tanzania called it “a landmark summit for a landmark decision” while President Yoweri Museveni said it was “historic”

The EAC-SADC-COMESA Summit is considered historic because for the first time, since the birth of the African Union, key building blocks of the African Economic Community have met on how to integrate for the establishment of the African Economic Community.

The intergration would include the establishement of a common market and regional infrastructure development in transport, ICT and energy. The EAC, COMESA and SADC currently have a combined population of 527 million, about 58% of the total population of Africa and a combined GDP of $ 625 billion.

“This cooperation will be a formidable force not only on the continent but on the world scale,” said Kikwete. Kgalema Motlanthe, President of South Africa said, “Our strength lies in our unity.”

The summit was held in pursuit of the broader objectives of the African Union to accelerate economic integration of the continent, with the aim to achieve economic growth, create employment, reduce poverty and attain sustainable development. Said Motlanthe,”The process will place us in a stronger position to respond effectively to intensifying global economic competition.”

Critics of the summit say the regions want to run before they can crawl. They point to the slow pace of economic intergration in all the regions. Negotiations for an EAC common market protocol between the five countries have taken too long and no agreement has been reached yet. Trading between the EAC countries is estimated at only 13%. Analysts say COMESA’s trade liberalisation that does not provide special incentives to its members has discouraged intra-African trade. Several countries are yet to end their protectionism policies of their local industries. In some countries industries are very young and need to be protected from competition from the other industries in the region in order to survive.

Nonetheless, the Tripartite Summit agreed to harmonise some trading arrangements amongst the three regional economic communities (RECs), free movement of business persons and joint implementation of inter-regional infrastructure programmes.

The summit approved the expeditious establishment of a Free Trade Area with the ultimate goal of establishing a single Customs Union.

Another big step, the Summit resolved that the three RECs should immediately start working towards a merger into a single REC with the objective of fast tracking the attainment of the African economic Community. On infrastructure development the Summit directed the three RECs to put in place, within one year: a joint programme for the implementation of a single seamless upper airspace and a joint plan for the implementation of an accelerated, seamless inter-regional ICT broadband infrastructure network. The RECs will coordinate and harmonise the Regional Transport Master Plans, Regional Energy Priority Investment Plans, and develop joint financing and implementation mechanisms for infrastructure development within one year.

The challenge now is attaining a fair and equitable integration process that will benefit and not hurt the smaller economies. “Successful integration processes incorporate compensation mechanisms to provide the least prepared member states with lead time to execute mitigating strategies against initial shocks,” said Rwanda’s President Paul Kagame. The other challenge is the overlapping membership. EAC shares four member states with COMESA and one member state with SADC. Five of SADC member states are members of the Southern African Customs Union. Of the 26 countries in the COMESA, EAC and SADC, seventeen are either in a customs union but also participating in negotiating an alternative customs union.

Studies have shown that multiple and overlapping memberships in RECs have created a complicated web of competing commitments which, combined with different rules, result in high costs for trade between African countries and work against beneficial integration. The Summit had no concrete suggestions on how these overlapping memberships would be harmonised.

The other is enforcing the protocols and treaties that will be adopted. As President Kagame noted, the integration will be meaningful if it moves beyond theoretical consensus to reality.