1 Common Market for Eastern and Southern Africa AnnualReport 2007 COMESA Annual Report 2008 2 COMESA Annual Report 2008 3 COMESA Annual Report 2008 COMESASecretariat Mission Statement: Contents 4 COMESA member States are: Burundi, Comoros, Democratic Republic of Congo (DR Congo), Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. To deliver excellent technical services to ‘COMESA for the advancement of sustainable growth and development through regional integration COMESA was initially established in 1981 as the Preferential Trade Area for Eastern and Southern Africa (PTA), within the framework of the then Organisation of African Unity’s Lagos Plan of Action and the Final Act of Lagos. The PTA was transformed into COMESA in 1994 to take advantage of a larger market size, to share the region’s common heritage and destiny and to allow greater social and economic co-operation, with the ultimate objective being the creation of an Economic Community. Contacts: Common Market for Eastern and Southern Africa (COMESA) Secretariat ‘ Ben Bella Road PO Box 30051 Lusaka, Zambia Tel +260 1 229725/32 Fax + 260 1 225107 Email: [email protected] Web: http://www.comesa.int For information and feedback please send your inputs to the Public Relations Officer on the above fax number or on email: [email protected] COMESA Annual Report 2008 Contents i The Vision Page Letter of Transmittal from the Secretary General Message from the Chairman of the Authority Part Performance of the World Economy in 2007 4 Part Performance of Developed Economies 7 Part Performance of African Economies 10 Part COMESA in Global Economy 11 Part COMESA Decision making Process and 2007 27 activities Part The COMESA Free Trade Area, Progress towards Customs Union and other 42 Integration programs Part Cooperation Activities 56 Financial statements for the year ended 31 Part 63 December2006 COMESA Annual Report 2008 The Vision of COMESA ii The vision of COMESA is to be a fully integrated, internationally competitive and prosperous economic community ready to merge ‘ into the African Union. ‘ COMESA Annual Report 2008 Letter of Transmittal from the Secretary General His Excellency Mwai Kibaki President of the Republic of Kenya and Chairman of the COMESA Authority State House 1 Nairobi, Kenya. FRESH PICTURE Your Excellency, TO BE TAKEN In accordance with the provisions of article 17, paragraph 8 of the COMESA Treaty, I have the honor and privilege to submit to you, Sir, the Annual Report for the year ending 31st December, 2008. The Report covers the general performance of the world economy, Africa, and COMESA economies and how they relate and influence our regional integration agenda. It also covers the activities of COMESA organs, the Secretariat and COMESA institutions in support of Member States in their pursuit of regional economic integration. Your Excellency, the year 2008, saw integration in our region move to an even higher level when the COMESA-EAC-SADC Tripartite Summit, in which you Your Excellency, your Secretariat continues to receive personally attended your Excellency, decided among substantial technical and financial support from a other things, to start a process of a common Free number of cooperating partners as described in the Trade Area (FTA) and work towards a merger of the report. The high level support that we have continued three regional economic communities. The activities to enjoy is a manifestation of confidence that the of Tripartite Task Force are also reported in this region and the international community have in Annual Report. COMESA. You will note, Your Excellency, as indicated by the We have every confidence that this level of audited report for the year 2007, that like in previous commitment and the spirit of cooperation will years, COMESA countries continue to unreservedly continue as we enhance the region’s single market pay their budgetary contribution to the Secretariat. and move towards levels of integration. The year 2008 continued to experience a very healthy contribution from both the Member States and cooperating partners. An audited report for 2008 will Sindiso Ngwenya be presented at next Summit scheduled for mid 2009. SECRETARY GENERAL COMESA Annual Report 2008 Message from the Chairman of the Authority 2 n behalf of the COMESA Authority and indeed hosting this historical event, Paul Kagame, President on my own behalf, I am pleased to introduce the of the Republic of Rwanda and Chairman of the East OAnnual Report for the Common Market for Eastern African Community (EAC), President Kgalema Motlanthe, and Southern Africa (COMESA) for the year 2008. As this President of the Republic of South Africa and Chairman report shows, 2008 was a historical year for COMESA of the Southern African Development Community and the Eastern and Southern Africa region in general. (SADC), who, with me in my capacity as Chairman of the At COMESA level we completed the process towards the COMESA Authority, co-chaired this historical Summit. COMESA Customs Union, scheduled to be launched at Tribute goes to all the Heads of States and Government the next Summit of heads of State and Government. who either personally attended the event or sent their plenipotentiaries to represent their countries. At Eastern and Southern Africa level, in October 2008, we held the first Tripartite Summit of COMESA-SADC-EAC Accolades go to our taskforce made of our very able Heads of State that made landmark decisions, among Chief Executives of our Secretariats namely, Mr Sindiso them, that the three Regional Economic Communities Ngwenya, Secretary General, COMESA, Ambassador (RECs) should immediately start working towards a single Juma Mwapachu, EAC Secretary General and Dr. Free Trade Area (FTA) from the Cape to Cairo - Matadi to Tomaz Salomao, Executive Secretary of SADC, and Madagascar and an eventual merger into a single REC their excellent technical teams, who worked tirelessly with the objective of fast tracking the attainment of the to ensure that the joint Council of Ministers, and finally African Economic Community. the tripartite Summit have all the supporting working documents and information, that facilitated our landmark Let me thank my colleagues, President Yoweri. K decision. Museveni, President of the Republic of Uganda, for In 2007, the 26 countries that comprise the three COMESA Annual Report 2008 RECs had a combined population of 548 million, and and is likely to receive new members in the near future, a combined Gross Domestic Product (GDP) of US$726 and free trade between Europe and the Mediterranean billion which is 50% of African Union (AU) Member region. These worldwide integration efforts should send States, 56% and 57% of Africa’s population and GDP us a clear message. If large economies in America and respectively. The COMESA-EAC-SADC regions’ total Europe are seeking bigger markets by fostering regional land mass is 14.8 square kilometers or 49% of Africa’s integration, the smaller economies of Africa have an Continent total land mass. This unity of purpose therefore even greater need to come together in a regional, and goes to fulfill the African Economic Community dream. subsequently, continental common market. 3 In the words of one of the prime movers of this bold On the international arena, as this annual report indicates, initiative, His Excellency Jakaya Kikwete, President of the in the year 2008, the world suffered economic hardship United Republic of Tanzania and then Chairperson of the unprecedented since the great depression. This will African Union, the replication of the Kampala decision to obviously have an impact on our economies, particularly Central and West Africa would hasten the realization of our exports and tourism sector, not to mention the the African Economic Community. possible flight of Foreign Direct Investment (FDI). But this too has a lesson for us. The aftershocks of the world The Kampala historic Summit, among others instructed economic crisis’ will rumble on beyond the year 2009, the tripitite task force to develop a roadmap within six and probably beyond the year 2010. We shall be affected months, for the establishment of a single FTA and the by problems that we had no role in creating. This means legal and institutional structures to underpin the FTA. that we have to resolve more than ever before, to be in The work to be undertaken on the establishment of a charge of our own destiny. We also saw unprecedented single FTA encompassing the three RECs will inform the governments’ involvement in rescue plans, and that not roadmap on the merger of the three organizations. a single Bretton Woods institutions raised a finger! This should teach us to stand on our feet when it comes to The Summit also directed that the study report on the genuine cases where our region might need to take Roadmap be presented to a specially convened Tripartite measures even if these are against traditional economic Council of Ministers for consideration within twelve beliefs. Such steps could be policy measures such months to, among other things; determine the timeframe as providing subsidies on agricultural inputs, industrial for the establishment of a single FTA. By the end of the production, water or electricity. year, the work on the roadmap had started. Last but not least, as the year 2008, came to an The decisions of the Tripartite Summit will have far end, Kenyans and the whole of Africa h celebrated the reaching implications on the operations of the RECs election of Barack Obama, as President of the United in Eastern and Southern Africa. There will be need for States of America. On behalf of the COMESA Authority of development partners to engage the Tripartite Task the Heads of State and Government , and on own behalf, Force to rationalize and harmonize their support in order I extend our message of best wishes on his election as to expedite the realization of the vision of the Heads the 44th president of the United States of America.