16 October 2006

East Africa: Uganda Says Ready to Join Comesa Free Trade Area

Kampala — Uganda is ready to ratify the Free Trade Area of the Common Market for Eastern and Southern Africa (Comesa).

Uganda's long overdue ratification of the FTA has been cause for concern within the business community here.

Goods originating from Uganda today into the Comesa grouping of countries carry an 80% tariff but this is very prohibitive for the country's industry and has hindered exports.

The ratification process has been handled by the two ministries of tourism, trade and industry and that of finance, planning and economic development with discussions now complete.

Dr. Sam Nahamya, the permanent secretary of the ministry of tourism, trade and industry told a trade review meeting (the second national trade sector review conference and the DTIS validation workshop) recently that discussions were now complete.

"We are ready to join the FTA. We have reached an agreement, the discussions are complete and I am sure a decision will be reached at the next heads of state summit in November (next month)," Nahamya said.

Uganda will become the 12th Comesa member to remove customs tariffs, quotas and other restrictions to trade. The other 11 FTA signatories are Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia, Rwanda, Burundi and Zimbabwe.

Member states that belong to the FTA trade on a duty-free basis in all trade amongst themselves. On the other side, member states that do not yet belong to the FTA are granted trade preferences by the FTA member states on the basis of the tariff reductions they have attained.

The FTA protocol goes on to say that member states that have not yet effected the minimum tariff reduction of 60% are not granted any preferential rate by the FTA member states or by those that have reduced tariffs by 60% or more.

All 20 Comesa member states were to have ratified the FTA by 2005, but Uganda is one of the countries that have stalled on the decision to join, something that has concerned manufacturers and traders so much.

The business community in Uganda continues to complain about failure by government to sign the treaty, something that is making trade with Uganda's neighbours unviable, as its exports to the Comesa member states are charged an 80% tariff.

However, experts have always argued that Uganda was justified to delay as it worked to review the agreement to avoid loopholes before endorsing it.

At its inception, the FTA was described by Egypt's President Hosni Mubarak as the mechanism through, which Africa's economies can develop and keep pace with competition in the new world market.

The FTA came into place on October 31, 2000, when nine of the member states, eliminated their tariffs on Comesa originating products.

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