Leaders launch talks on ‘Cape to Cairo’ free trade bloc

African leaders launch talks on Sunday to create the continent’s biggest free-trade bloc, a $875-billion market that would boost the region’s economic profile.

The so-called “Grand” Free Trade Area would cross 26 countries, stretching from the Cape to Cairo, with a combined population of 700-million people.

“This is but one major step towards achieving economic freedom in our lifetime in the continent,” South African President Jacob Zuma said on the eve of the summit, which 24 heads of state will attend.

“We must also continue building an African continent that is united, and which is free of poverty, disease, deprivation and conflict,” he said.

The proposed free trade area (FTA) would join three existing, and sometimes overlapping, blocs.


But each has different rules, with some countries belonging to more than one grouping, further complicating efforts to streamline trade.

The idea to unite these blocs was endorsed at a 2008 summit. It would bring together the continent’s most developed economies of South Africa and Egypt and some of its most energetic, such as Angola and Ethiopia.

“Establishing a Grand Free Trade Area … is expected to unleash the enormous economic growth and development potential of Africa,” the five-member East African Community (EAC) said in a statement.

“Its establishment will mark a historical milestone in the integration of the continent.”

Stumbling blocks
But the pact faces immense hurdles: tariff barriers, poor infrastructure, weak supply chains, and economies often largely reliant on natural resources rather than manufactured products.

The three existing free trade areas — of which the EAC is the most advanced — have failed to meet intra-trade targets despite removing the bulk of trade tariffs.

And the bloc includes countries hit by conflicts, coups and political turmoil, such as Libya, Madagascar, Sudan and Zimbabwe.

New World Bank research says trade within Southern African accounts for just 10% of the total in the region — compared to 60% in Europe and 40% in North America.

Southern African Development Community (SADC) exports increased from 20 to more than 30% of combined GDP over the past decade, but regional trade made up a mere 3% of the increase.

Stumbling blocks include border crossings and non-tariff barriers such as import bans and permits that cut into competitiveness.

South African grocery chain giant Shoprite for example suffers losses of $500 a day for each truck delayed at border posts.

As the 19 members of the Common Market for Eastern and Southern Africa (Comesa) join the other two blocs on Sunday, the aim is to work towards combining small domestic markets into a larger, more effective force. – AFP

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Advertising

Subscribers only

Q&A Sessions: George Euvrard, the brains behind our cryptic crossword

George Euvrard spoke to Athandiwe Saba about his passion for education, clues on how to solve his crosswords and the importance of celebrating South Africa.

Poachers in prisons tell their stories

Interviews with offenders provide insight into the structure of illegal wildlife trade networks

More top stories

No one should be as rich as Elon Musk

The reactions to Elon Musk’s billionaire status are evidence that far too many South Africans have not fully grasped the destructive consequences of inequality. Entrepreneur...

Department of basic education edges closer to releasing matric results

The basic education department has said that it is almost done with the marking process and that the capturing of marks is in progress.

The rare fairytale of Percy Tau

Through much hard work and a bit of good fortune, the South African attacker has converted a potential horror story into magic

Somali troops may have been drawn into Ethiopia’s civil war

The Mail & Guardian spoke to Somalis about their relatives who disappeared after signing up for military training and fear they may have been killed
Advertising

press releases

Loading latest Press Releases…