Trade between the Twenty One  COMESA member states has reached US$ 8 billion though much more is still needed to be done for the numbers to grow further according to Benedict Musengele a Senior Research Fellow Trade and Customs Division at the COMESA Secretariat.
Africa EAC Industry

Countries still need to do more to increase Intra COMESA trade

Trade between the Twenty One  COMESA member states has reached US$ 8 billion though much more is still needed to be done for the numbers to grow further according to Benedict Musengele a Senior Research Fellow Trade and Customs Division at the COMESA Secretariat.

Musengele, who was recently addressing a COMESA Business Reporters Training said Member States established a Free Trade Area (FTA) on 31 October 2000 after a sixteen-year period of progressive trade liberalization through reduction of intra-COMESA tariffs.

He said as, at January 2019, 16 countries were participating in the Free Trade Area which has a potential of growing to US$82.4 billion in tradable goods volume.

“Other three Member States, namely Ethiopia, Eritrea and Eswatini  (Swaziland) are at different levels regarding their participation in the Free Trade Area. The new Member States Tunisia and Somalia are on process to join Free Trade Area,” said Musengele.

Musengele said there has been growth of intra-COMESA exports from US$1.5 billion in 2000 to US$ 8.0 billion in 2017 adding that this growth has been accounting at an average of 7 per cent every year since the establishment of the Free Trade Area with a higher increase reflected between the intra-Free Trade Area Member states.

The COMESA Rules of Origin are used to determine whether goods produced in the COMESA region are eligible for preferential treatment within the Free Trade Area.

The COMESA Protocol on Rules of Origin outlined five independent origin criteria for the preferential tariff treatment under the Free Trade Area.  The criteria says that goods are considered as originating in a Member State if they are wholly produced by a COMESA member state, when the COMESA Infrastructure Fund value of any non-originating material is not exceeding 60% of the ex-work price of the goods and the goods must attain the value-added of at least 35% of the ex-factory cost of the goods.

The Protocol on the rule of origin also adds that goods should fulfil the Change in Tariff Heading (CTH) rule and they must have importance to the economic development of the member states and should contain not less than 25% of value-added.

Musengere, however, notes major structural constraints to intra-COMESA trade as the low level of trade complementarity, Supply-side constraints, inadequate infrastructure and costly linkages and the lack of information about the production capacity of other Member States.

Limited information on available market opportunities and potential within the region, low level of value addition, high freight costs and preference to trade with developed countries are some of the other constraints Musengere adds to intra- COMESA trade.

COMESA in 2015 adopted an industrialization policy  2015-2030 which aims to enhance value addition in the region and prioritized Agro-Processing, Energy, Textiles and Garments, Leather and Leather Products, Mineral Beneficiation, Pharmaceuticals, Chemicals and Agro-Chemicals, Light Engineering, The Blue Economy and Construction material.

Currently, there are 21 members of COMESA. They include Burundi, Comoros, Djibouti, DR Congo, Egypt, Eritrea, Eswatini, Ethiopia, Kenya, Libya and Malawi.

Others are Madagascar, Mauritius, Rwanda, Tunisia, Somalia that joined in 2018, Sudan, Seychelles, Uganda, Zambia and Zimbabwe.

The region has an estimated population of over 592 million people as of 2018 and an estimated Gross Domestic Product of US$ 768 Billion.

BY PAUL TENTENA