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Building Blocs to Free Trade in Africa Building Blocs to Free Trade in Africa 1

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Building Blocs to Free Trade in Africa Building Blocs to Free Trade in Africa 1 Building Blocs to Free Trade in Africa Building Blocs to Free Trade in Africa 1. Southern African Development Community (SADC) Formation What has it achieved so far? Originally known as the Southern Yes, SADC free trade area was established in The target date for establishing a Single African Development Co-ordination August 2008 - 85% of intra-regional trade Currency is still years away. The model Conference (SADCC), the SADC was amongst the partner states attained zero system for a Single Currency will launched on 1 April 1980. The import tariffs. Maximum tariff initially be tested on the current CMA Declaration and Treaty establishing the liberalisation was attained by January 2012, countries that use the South African current SADC, which replaced the when the tariff phase down process for Rand and if successful, will be ready to SADCC, was signed on 17 August 1992 sensitive products was completed. be rolled out to the rest of the SADC in Windhoek, Namibia. Member States as the region advances (Twelve out of fifteen SADC Member States its integration process. Purpose are part of the Free Trade Area, while Angola, DRC and Seychelles SADC strives for regional integration, remain outside.) built on democratic principles, and equitable and sustainable development Certain SADC member states (Botswana, to achieve and promote economic Lesotho, Namibia, South Africa, Swaziland development, peace and security and (SACU members) and Mozambique) growth, and to reduce poverty, enhance concluded an Economic Partnership the standard and quality of life of the Agreement (EPA) with the EU in July 2014. people of Southern Africa, and support SADC is still in the process of establishing a the socially disadvantaged through Customs Union which will focus on trade regional integration. Click on one of the and financial liberalisation, competitive and Blocs to compare The SADC is one of the five pillars of diversified industrial development and SADC the Africa Economic Community increased investment in the region, and (AEC), an organization that aims to which will pave the way for the PTA & COMESA promote economic, social and cultural establishment of a SADC Common Market. development as well as African Another key milestone, which follows the Current Members economic integration in order to EAC establishment of the Free Trade Area, increase self-sufficiency and – Angola – Namibia Customs Union and Common Market, is the endogenous development and to create SACU & CMA establishment of a SADC Monetary Union. – Botswana – Seychelles a framework for development, ECOWAS mobilisation of human resources and The final step in the process of deepening – DRC – South Africa material. It further aims to promote regional economic integration in SADC is – Lesotho – Swaziland UDEAC co-operation and development in all the implementation of a Single Currency, aspects of human activity with a view to which will establish the region as an – Madagascar – Tanzania UDEAC (2) raising the standard of life of Africa’s Economic Union. – Malawi – Zambia people, maintaining economic stability OHADA and establishing a close and peaceful – Mauritius – Zimbabwe Tripartite FTA relationship between member states. – Mozambique Building Blocs to Free Trade in Africa 2. Preferential Trade Area for Eastern and Southern African States (PTA) and Common Market for Eastern and Southern Africa (COMESA) Formation What has it achieved so far? The PTA was established on 22 ease the movement of goods, services December 1981 under the auspices of the and people between the countries; United Nations Economic Commission Yes, the FTA members have been very – creating an enabling environment and for Africa and was replaced by COMESA successful in eliminating customs tariffs legal framework which will encourage in December 1994. and have also been working on the the growth of the private sector, the relaxation and eventual elimination of Purpose establishment of a secure investment quantitative restrictions and other non- environment, and the adoption of tariff barriers. The aim of the PTA was to promote common sets of standards; and cooperation and integration covering all the fields of economic acitivity, to raise the – the harmonisation of macro-economic The COMESA Customs Union was also standard of living of the people by and monetary policies throughout launched in June 2009, but has not yet fostering closer relations among the the region. been implemented as the member states member states, to create a Common are still in the process of enacting the In short, COMESA aims to achieve economic following key legislation: Market in order to allow a free movement prosperity through regional integration. of goods, capital and labour within the – the Common Tariff Nomenclature; sub-region and to contribute to the – the Common External Tariff; and progress and development of the other African countries. – the Common Market Customs Management Regulations. COMESA has been designated one of Click on one of the Blocs to compare the five pillars of the AEC. SADC COMESA has a wide-ranging series of In October 2000, some of the COMESA member states formed a objectives, which include: Members of COMESA are: PTA & COMESA free trade area (FTA), which have 1. Promotion of peace and security in – Burundi – Malawi since grown and currently consist of the region; and the following members: EAC – Comoros – Mauritius 2. Trade promotion in the region, – DRC – Rwanda – Burundi – Mauritius SACU & CMA which will be achieved by: – Djibouti – Seychelles – Comoros – Rwanda – trade liberalisation and customs – Djibouti – Seychelles ECOWAS co-operation, including the – Egypt – Sudan UDEAC introduction of a unified – Eritrea – Swaziland – Egypt – Sudan computerised customs network – Ethiopia – Uganda – Kenya – Uganda across the region; UDEAC (2) – Kenya – Zambia – Libya – Zambia – improving the administration of – Libya – Zimbabwe – Madagscar – Zimbabwe OHADA transport and communication to – Malawi Tripartite FTA – Madagascar Building Blocs to Free Trade in Africa 3. East African Community (EAC) Formation Purpose What has it achieved so far? This regional intergovernmental organisation was first established in 1967, The Vision of EAC is a prosperous, however it collapsed in 1977 and was Yes, the EAC countries established a competitive, secure, stable and politically revived on 7 July 2000. Customs Union in 2005 and a Common united East Africa and its Mission is to widen Market in 2010. and deepen Economic, Political, Social and The EAC is chaired by the president of Culture integration in order to improve the The next phase of the integration will see Tanzania, John Magufuli. quality of life of the people of East Africa the EAC enter into a Monetary Union through increased competitiveness, value (the Protocol for the establishment of added production, trade and investments. the East African Monetary Union by the Heads of State was signed in November The EAC aims at widening and deepening co- 2013) and ultimately become a Political operation among the member states in, Federation of the East African States. among others, political, economic and social fields for their mutual benefit. Click on one of the Blocs to compare SADC PTA & COMESA Current Members EAC – Angola – Namibia SACU & CMA – Botswana – Seychelles ECOWAS – DRC – South Africa – Lesotho – Swaziland UDEAC – Madagascar – Tanzania UDEAC (2) – Malawi – Zambia OHADA – Mauritius – Zimbabwe Tripartite FTA – Mozambique Building Blocs to Free Trade in Africa 4. Southern African Customs Union (SACU) and Common Monetary Area (CMA) Formation Purpose SACU was established on 29 June 1910 SACU's objectives are: (TIDCA) that will build on the trade pursuant to a Customs Union Agreement – To facilitate the cross-border movement benefits offered under the Africa Growth (CUA) between the Union of South of goods between the territories of the and Opportunity Act (AGOA). In this Africa and the High Commission Member States; context, the Department will seek to Territories of Bechuanaland (Botswana), extend and deepen the benefits of AGOA – To create effective, transparent and Basutoland (Lesotho) and Swaziland. and work to ensure that the engagement democratic institutions which will ensure When these territories became with the US supports regional equitable trade benefits to Member States; independent, SACU was re-launched on integration in Southern Africa. 11 December 1969 with the signing of an – To promote conditions of fair competition The EPA that was concluded between agreement between South Africa, in the Common Customs Area; certain SADC member states (including all Botswana, Lesotho and Swaziland. – To substantially increase investment SACU members) and the EU in July 2014, Namibia joined SACU as a member after opportunities in the Common Customs Area; also benefits SACU in that it preserves it became independent from South SACU’s functional coherence, particularly Africa in 1990. – To enhance the economic development, diversification, industrialization and in regard to maintaining the common With the independence of Namibia and competitiveness of Member States; external tariff. the end of apartheid in South Africa in Also, in terms of SA forex rules and 1994, SACU members embarked on – To promote the integration of Member regulations, no foreign exchange may be new negotiations in November 1994, States into the global economy through purchased when traveling to countries which culminated in a new SACU enhanced trade and investment; within CMA, as they all accept SA
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