African Unification Front
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Back to Trade Policy
COMESA
TRADING BLOCS: COMESA
COMESA has 20 member states and population of 385 million. It is the largest integrated trading blok in the African Union.
Nine African countries have launched a free trade area. It will allow free movement of people and goods from Egypt to Zimbabwe. Barriers to trade will be abolished, followed in 2025 by the introduction of a common currency. The initiative for the free trade zone was taken by COMESA, the 20-member Common Market for Eastern and Southern Africa. But what are the chances of success?
The continent is seeking new trade arrangements with the World Trade Organisation and the European Union. African countries realise that they'll be in a stronger position if they´re united and speak with one voice. Some argue that a free trade zone won't help matters: it will sow discord. It´s the view of South Africa, one of the countries that tried to dissuade COMESA-members from joining the free trade area.
Drawbacks
South Africa argues that the initiative undermines current efforts by SADC, the Southern Africa Development Community, to create its own free trade zone in 2012. And South Africa's views carry weight. Tanzania, for instance, chose to withdraw from COMESA at the very last moment. The East African country, which has been praised for its economic policy by the IMF and World Bank, says it isn't ready for membership of a trade bloc. "Not a bad decision", says Carolyn Jenkins, who researches African economies at Oxford University in the UK. She explains that the COMESA initiative has several drawbacks.
"The difficulty of moving goods around Africa is a major problem. Neither road network nor rail network is really in place. And even where there are railways sometimes the gauges are different. So you can't move locomotives from source to market. But in fact you have to change locomotives at the border. And then of course you've got the problem of civil war which tends to break up the continent and break up communication."
Alternatives to Free Trade Zones
Apart from poor communications and the threat of war, the chances of success are also limited by the absence of economically important nations such as Nigeria and South Africa. Besides, lifting trade barriers only makes sense if there's a lot of trade between the countries. And there's not much diversity in exports from the nine COMESA countries, which mainly consist of raw materials and agricultural products. Their trade is therefore mainly targetted at third countries outside Africa. Mrs Jenkins believes Africa should be exploring other avenues of economic cooperation.
"What might make more sense and would be more viable than this big 20-country grouping in COMESA is for smaller groups of countries in Africa to link around a more dominant regional partner. So that in West-Africa there is a group centred around Nigeria, in East-Africa a group centred around Kenya and in North-Africa a group centred perhaps on Egypt which is actually quite a successful and strong growing economy at the moment."
Southern Africa
South Africa has been putting this system into practice. Early this year, the country introduced a raft of measures designed to liberalise trade, opening up its market to its economically weaker neighbours. South Africa itself has also benefited, boosting its export of industrial products in the region. Given the system's success in Southern Africa, other African regions may soon follow suit.
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