19 July 2017

Africa: Largest Free Trade Area for Africa Still Elusive

Photo: Daily News
(file photo).

Arusha — The formal launch of the once touted the mega economic bloc for Africa, the Tripartite Free Trade Area (FTA), faces further delay because only one country has so far ratified its creation out of 19 member states.

A minimum of 14 ratifications are required for the agreement to come into force, combining three regional economic communities, the East African Community (EAC), Southern Africa Development Community (Sadc) and Common Market for Eastern and Southern Africa (Comesa).

This emerged last week when Madagascar, a Comesa member, appended its signature to the Tripartite Agreement before senior officials of the EAC, Sadc and Comesa. "Egypt is the only country to have ratified the Agreement. A total of 14 ratifications are needed for the agreement's entry into force," officials at the event in Antananarivo were told.

Under the Agreement, the three economic blocs were to merge into a single free trade area, the largest in Africa, with a combined Gross Domestic Product (GDP) of $ 1.3 trillion, making it also one of the largest FTAs in the world.

Although the signing of the Agreement by Madagascar, only a few days after South Africa did so, the EAC secretary general, Liberat Mfumukeko, the current chairperson of the Tripartite Task Force, admitted that negotiations were going at a snail's pace and that little has been achieved.

"There had been limited progress in Phase Two negotiations and the agreement on the movement of business persons," he said in Kampala on July 7th, hardly a week before the Antananarivo event, which saw Madagascar join the FTA.

At the Kampala meeting, the sixth session of the Tripartite Sectoral Ministerial Committee, Uganda's minister for Trade, Industry and Cooperatives Ms Amelia Kyambadde stated that the Intra-Tripartite trade in the three blocs was still low. According to her, it amounted to only 19 per cent of the continent's $930 billion total trade, attributing it to low level of industrialisation, restricted movement of labour, poor infrastructure and high dependency on export of unprocessed commodities. The minister observed, nevertheless, that the tripartite bloc provided an opportunity to unlock the enormous trade and investment potential of the envisaged bloc.

"In this regard, the business community is waiting anxiously towards the opening up of the market of over 600 million people," she said, noting that almost all the annexes were finalized.

The South Africa minister for Trade and Industry, Dr. Rob Davies wondered why negotiations towards a full-fledged FTA were not making progress as anticipated.

Establishment of the FTA is intended to bolster intra-regional trade by creating a wider market, increase investment flows, enhance competitiveness and encourage regional infrastructure development.

Although the formal agreement to set in motion its creation was signed by the Heads of State and Governments from 26 African countries on June 10, 2015 in Sharm El Sheikh, Egypt, resource constraints has been blamed for failure to finalise the process.

"There have been many hurdles to be overcome in meeting the clear priorities the Tripartite Council has set," Amb. Mfumukeko said in Nairobi late last year, as he took over the chairmanship of the task force.

Until recently, the very three blocs pushing for the creation of the tripartite economic bloc - EAC, Sadc and Comesa - were themselves yet to ratify the pact and deposit instruments of ratification.

The statement from the EAC secretariat yesterday did not say if the three blocs had ratified by last month as announced last year when the EAC boss was installed to spearhead the task.

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