Just like other regions, Common Market for Eastern and Southern Africa (Comesa) member states have been hit by the Coronavirus pandemic. However, there have been opportunities for local production and trade in commodities initially imported from outside the region. Prosper Magazine’s Dorothy Nakaweesi interviewed Ms Chileshe Mpundu Kapwepwe, the secretary general of Comesa. Below are the excerpts.
Covid-19 has hit hard the global economy. How has the pandemic affected the Common Market for Eastern and Southern Africa (Comesa) Member States?
The restrictive measures and closure of industries in key Comesa trading partners such as Europe and China led to reduced supply of commodities thereby leading to shortages and increased market prices of products.
At the same time, commodity dependent countries such as Zambia and DR Congo have been further affected by global market price falls arising from reductions in demand.
The impacts have been highly felt by services-oriented economies, including Egypt, Ethiopia, Rwanda and Kenya where air transport, financial and tourism services following lockdown, international and domestic travel restrictions.
The aviation and tourism industries have been hardest hit, especially in countries such as Seychelles, Mauritius, Egypt, Kenya, Tanzania, Rwanda, Burundi and Uganda where lockdowns and restrictions on international and domestic travels have led to closure of airlines, loss of jobs and spiral effects in other sectors of economies.
Besides the closure of businesses, including hotels and restaurants, shops, bars, and entertainment activities like sports and creative arts has led to massive job losses thereby driving many people into poverty. In addition, the closure of schools and other educational institutions will have far reaching implications on the much-needed human capital development in the region.
However, a few sectors have also expanded, especially those driven by IT development and Internet. Conferences and mobile banking have been restored after limited disruptions. In addition, most member states are also trading more within the region owing to lockdown in major trading partners outside the African continent.
Despite the lockdowns and pandemic, we have seen some Comesa members such as Uganda trade more within Africa. How is this going to strengthen regional economic integration?
The protective measures by major importers to Comesa, namely the EU, US and China led to abrupt shortages of supplies in the region. Consequently, Comesa member states have had to trade more amongst themselves to fill the supply gaps. In addition, some local industries have also increased and diversified their productions, thereby sourcing and supplying varieties into the region.
Thus, food products, pharmaceuticals and other household commodities are now being traded more within the region despite the lockdown.
What opportunities have come as a result of Covid-19 that Comesa as a region can tap into?
There have been opportunities for local production and trade in commodities initially imported from outside the region. These include essential commodities, especially in pharmaceutical supplies, medicines, personal protective equipment and household merchandise.
The supply gaps also provide member states opportunity to diversify their production base and take advantage of expanded regional markets in the Tripartite FTA and the ACFTA.
How has the Comesa secretariat positioned itself to help its member states achieve, sustainable and inclusive growth?
In response to the Covid-19 pandemic, the secretariat developed guidelines to promote coordination and collective approach by member states in facilitating movement of goods and services amidst restrictive measures to prevent the spread of the virus across borders.
The guidelines aim to safeguard the existing trading arrangements thereby avoiding erosion of gains already made as far as liberalisation of trade and investments in Comesa are concerned.
More recently, the secretariat developed an online platform whereby member states can exchange information about availability of essential products during the pandemic period.
Besides, the secretariat is leveraging developments in IT to strengthen digital solutions to trade and is implementing the Digital Free Trade Area as a trade facilitating tool comprising e-Trade, e-logistics and e-regulations as a platform to increase efficiency and enhance intra-COMESA trade with minimal physical interactions.
One of the challenges regional trading blocs face is multiplicity of membership. How has this affected the operations of Comesa?
Although Comesa has been heavily involved in harmonisation of rules and regulations with other Regional Economic Communities, multiplicity of membership has partly slowed down the implementation of various programmes and activities.
This is largely attributed to lack of effective coordination and harmonisation of various policies. In addition, this scenario weakens capacity to mainstream regional commitments into national plans to ensure success of the integration processes.
What is the update on Comesa, SADC and EAC tripartite trading regime?
So far, the Tripartite FTA agreement has been signed in 22 countries, whereas eight have ratified. The latter include Egypt, Kenya, South Africa, Rwanda, Uganda, Burundi, Botswana and Namibia. Besides, significant progress has been made under the market integration pillar.
For instance, EAC and SACU finalised their bilateral tariff offer negotiations on products that are subject to immediate liberalisation, and EAC and Egypt also concluded their negotiations.
Negotiations between SACU and Egypt are also nearing completion. On Rules of Origin, negotiations have been completed on 90 Chapters i.e. 5030 out of 5387 tariff lines. On the Non-Tariff Barriers, the Tripartite NTBs SMS reporting tool has been developed and rolled out in all Countries.
Rich countries continue to subsidize their producers while demanding a separate set of rules for the developing world. What is Comesa’s view on this?
Article VI of GATT 1994, elaborated by the WTO Anti-Dumping Agreement, allows countries to take action against imports from countries allegedly exporting at dumped prices. In Comesa, defense mechanisms are provided for under Articles 53 and 54 of the Treaty. The remedies broadly cover anti-dumping measures/actions; countervailing duty measures/actions; and safeguard measures/actions.
Although the defense instruments allow governments to take remedial action against imports causing material injury to a domestic industry, the procedures for their application technical, lengthy, expensive and complex, hence difficult to apply by many Comesa member states.
A few Comesa countries like Kenya and Egypt have already enacted appropriate legislations and established institutions to deal with these matters though capacity constraints remain a challenge. There is therefore, need for all member states establish appropriate institutional structures, legal and regulatory frameworks and human capacities to detect cases, carry out investigations and conduct economic analysis to decisively and effectively deal with the anti-competitive practices.
Which are some of the sticking Non-tariff barriers that Comesamember states are experiencing?
So far, majority of reported NTBs in the Comesa region are operational in nature, especially those related to treatment of goods at points of entry and account for about 82 percent of reported cases.
However, behind-the-border measures, including domestic legislations covering health, technical, product, labor, environmental standards, internal taxes or charges, and domestic subsidies have become more prominent though much more complex and difficult to identify.
What measures have Comesa put in place to reduce on the NTBs?
There is an NTB reporting, monitoring and resolution in place. There exists working procedures and regulations to facilitate administration and resolution of NTBs as they arise. Besides, National NTB monitoring units have been established in all member states and a monitoring unit at the secretariat.
The slow pace of implementation of various programmes and projects has always been a unique challenge. This is mainly attributed to the weak capacity to mainstream regional commitments and agreements into national plans to ensure the success of the process.
Secondly, the weak coordination and involvement of other stakeholders – the private sector and civil society in the cooperation and integration process. The inadequacy of human and institutional capacity for the design and implementation of cooperation and integration programmes and the gaps in soft/hard infrastructure and connectivity are other challenges that Comesa region face.