Africa’s biggest trade bloc to launch customs union

Africa’s main trading bloc opens a summit on Sunday to launch a customs union that will stretch across the continent in a bid to boost regional trade.

Under the deal, the 19 countries in the Common Market for Eastern and Southern Africa (Comesa) will impose the same tariffs on goods from outside the region.

Raw materials and capital goods will travel across borders without tariffs, while intermediate products will be taxed at 10% and finished goods at 25%.

Most countries have also lifted visa restrictions on travel within the bloc, with members ranging from tourist hotspot Egypt to some of the world’s poorest and most conflict-torn nations, like the Democratic Republic of Congo.

The Comesa region is home to 400-million people, with a combined gross domestic product of about $360-billion.

Leaders hope the union will simplify trade across the region and provide the basis for strengthening integration in the future, eventually leading to a single currency.

“The customs union will therefore enable us to grow beyond the free movement of goods and establish the foundations of a single market,” Zimbabwe’s Prime Minister Morgan Tsvangirai told business
leaders ahead of the summit in the resort town of Victoria Falls.

“It will offer a more predictable economic environment for both investors and traders across the Comesa region,” he said.

The launch of the union had been set for May last year, but was twice delayed because of Zimbabwe’s political turmoil and to allow more time for the 19 member countries to negotiate the harmonisation of tariffs.

Officials say Comesa has already succeeded in increasing trade within Africa, which historically has exported most of its raw materials to rich countries with little commerce within the continent.

Kenyan Trade Minister Amos Kimunya said trade within the bloc had increased fivefold over the past decade, from three billion to $15-billion.

“The Comesa market is now the number one export market for several members states, ahead of traditional export markets such as the European Union,” Kimunya said.

But some economists doubt that the customs will change Africa’s traditional trade patterns.

“African states don’t trade among themselves,” said Bongani Motsa, an economist at the Pan-African Advisory Service financial consultancy.

“If you look at the trading account, African states trade in primary products which they mostly export to the European Union, and then they import high value products from other international countries.”

The region will also have to overcome a series of conflicts and internal tensions.

Just 10 years ago, nearly half of Comesa members were embroiled in the DRC’s conflict. Sudan remains at civil war, while Madagascar saw its elected leader toppled after street protests in March.

Comesa comprises Burundi, Comoros, Djibouti, the Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. – AFP

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