COMESA (Common Market of East and Southern Africa)

The Treaty establishing COMESA (Common Market of East and Southern Africa) (1) was signed in November 1993 and it was ratified in December 1994. It replaced the former Preferential Trade Area which had existed since 1981.

Arab COMESA member states are Egypt, Sudan, Djibouti and Comoros. Other members are Angola, democratic republic of Congo, Eritrea, Ethiopia; Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Swaziland, Uganda, Zambia and Zimbabwe (2). COMESA has a total population of 340 million whose total gross domestic product is US$ 170 billion (average GDP per capita is 690 US$). The volum of trade transactions amongst COMESA member countries and the rest of the world amounts for 60 billion US $.

Historical background

After their independence in the 1960s, African countries understood the need to promote bilateral and multilateral economic cooperation. Instead of the creation of a Pan-African regional continental economic system, they prefered to integrate gradually through the establishment of sub-regional groups. The United Nations Economic Commission for Africa (ECA) proposed the division of the continent into four sub-regions: Eastern and Southern, Central, West and north Africa. These proposals were endorsed by the Organisation of Arab Unity Conference of Chiefs of State. African states were encouraged to strengthen sub-regional economical cooperation and to promote coordination and harmonisation among the different groupings for the gradual establishment of an African Economic Community by the end of the century.

The origins of COMESA followed the proposals of the UN Economic Commission for Africa with a view to create an Economic Community for Eastern and Southern African countries (October 1965). The need of sub-regional economic arrangements became more urgent in the 1970s. Notably, three major developments needed to be addressed: the inexistance of political cooperation in the region following the collapse of the federations in the region; the negative effects on their economies of the apartheid system in South-Africa; and, economic dependency on industrialised countries. The Preferential Trade Agreement was signed in Lusaka on 21 December 1981 (it came into force in September 1982). The PTA was meant to lead to a common market.

The Treaty establishing COMESA was signed on 5th november 1993 in Kumpala (Uganda) and was ratified one year later in Lilongwe (Malawi)

Institutions

The Authority of Heads of State and Government is the supreme policy organ of the Organisation. The presidency is held on a rotatory basis by one of the member countries for one year. The Secretary General, since June 1998, is Mr. Erastus J.O. Mwencha (Kenya). COMESA countries established a Court of Justice (1998), which ensures the proper interpretation and application provisions of the Treaty. This organ is modelled along the lines of the European Court of Justice. The headquarters of the organisation are in Lusaka (Zambia).

Institutions:

  • The COMESA Trade and Development Bank (Nairobi, Kenya);
  • The COMESA Clearing House (Harare, Zimbabwe);
  • The COMESA Association of Commercial Banks (Harare, Zimbabwe);
  • The COMESA Leather Institute (Ethiopia);
  • The COMESA Re-Insurance Company (ZEP-RE) (Nairobi, Kenya)

COMESA Free Trade Zone

COMESA Free Trade Zone was launched in Lusaka on the 31st October 2000 by nine of its members (Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbawe) with the commitment to lift all custom barriers.

COMESA countries which are not members of the FTA (eg. Comoros) have continued to trade on preferential terms. The tariffs on COMESA originating goods have been reduced by between 60% and 80% (at present 20%-40% of their general Most Fauvored Nation tariffs).

COMESA Common External Tariff

The introduction of a common external tariff is scheduled for 2004, on the following terms: 0% for capital goods, 5% on raw materials, 15% on intermediate goods and 30% on final goods.

Monetary and fiscal cooperation

The Monetary Harmonisation Programme was agreed in 1990 by the at the time PTZ and was endorsed by the COMESA treaty in 1993. The programme aims at the gradual establishment of a full monetary union by 2020: irrevocable fixation of exchange rates, harmonisation of monetary policies by Central banks, creation of a single currency and a common monetary authority.

COMESA and the European Union

The European Union approuved a grant of 12,6 MA in order to finance the harmonisation of customs systems and of trade statistics from COMESA countries. The EU and the COMESA countries hold an EU-COMESA economical cooperation week in Lusaka (26-31 October 2000), aimed at the promotion of economical relations between European investors and COMESA member countries. A set of Regional Economic Partnership Agreements (falling within the scope of the Cotonou Agreements) are to be established between the European Union and the COMESA member countries by 2008.

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Notes:

(1) Not to confuse with CEN-SAD: Community of Sahel and Sahara States. Former COMESSA (French acronym).

(2)Tanzania officially withdraw from the regional economic grouping in September 2000 because of concern that changes in internal tariff arrangements would harm the country. Tanzania remains a member of the other two regional economic blocs, the Southern development Community –SADC- and the East African Community.

For more information:

COMESA website

Intra-COMESA Trade/ Extra-COMESA Trade

1997

Country Intra-COMESA Trade Extra-COMESA Trade Total Foreign Trade
Djibouti
71.03
261.97
333
Egypt
175.41
16,980.98
15,661.71
Comores
5.60
55.65
61.26
Sudan
13.72
177.65
191.37
TOTAL
2,728.67
49,599.58
52,328.25

1999

Country

Intra-COMESA Trade

Extra-COMESA Trade

Total Foreign Trade
Djibouti
64.20
225.80
290
Egypt
179.08
19,387.84
19,566.92
Comoros
4.02
35.51
39.53
Sudan
12.06
206.38
218.44
TOTAL
2,356.93
50,253.39
52,610.32

2001

Country

Intra-COMESA Trade

Extra-COMESA Trade

Total Foreign Trade
Djibouti
83.29
Egypt
304.85
15,356.85
15,661.71
Comoros
3.71
39.12
42.82
Sudan
152.49
3,213.25
3,365.74
TOTAL
3,199.05
52,510.77
55,709.82

Figures are in million US $

Only Arab countries are listed

Source: COMESA, (National Statistical Offices)