Southern African countries have launched a regional trade zone that aims to eliminate import tariffs, with plans for a common currency by 2018.
Southern African countries launched a regional trade zone at a summit on Sunday that aims to eliminate import tariffs, with plans for a common currency by 2018.
Eleven of the 14 countries that are part of the Southern African Development Community (SADC) will participate in the free trade area, including Zimbabwe, which has the world’s highest inflation rate officially put at 2,2-million percent.
South Africa, the continent’s economic powerhouse, is also among the countries that are part of the free trade zone.
Three SADC countries — Angola, the Democratic Republic of Congo and Malawi — plan to join at a later date due to weak economies.
Angola, which rivals Nigeria as Africa’s largest oil producer, continues to recover from a 27-year civil war that ended in 2002.
”While 85% of all intra-SADC trade is duty-free in 2008, we must acknowledge that the work is not yet complete,” South African President Thabo Mbeki said at the launch. ”The remaining 15% of trade is still to be liberalised by 2012 and we need to ensure that all members are able jointly to meet that milestone.”
Parts of the free trade zone were put in place in January.
There were, however, concerns over conflict with economic partnership deals that SADC states have with the European Union.
”Certainly, the [economic partnership deals] will have a profound — and even limiting — impact on the process of deepening integration at the regional level,” Mbeki said.
Some states are also part of trade arrangements in place in other regions of Africa.
The region’s trade balance is heavily in favour of South Africa, which took over as chair of SADC at the summit this weekend.
Excluding Zimbabwe, the GDP growth forecast for the region in 2008/09 is at 7,9%, according to SADC executive secretary Tomaz Salomao.
While substantial recent growth was recorded in Angola, Malawi, Mozambique and Tanzania, real GDP growth for the SADC region increased by 5,9% in 2007, virtually unchanged from 2006.
The free trade area precedes a customs union planned by 2010, a common market by 2015, a monetary union by 2016, and a single currency by 2018. — AFP