• Which countries are the current members of COMESA?
• When and why was COMESA formed?
• What historical, consultative process preceded the formation of COMESA?
• How is COMESA Structured Institutionally?
• What Independent Institutions has COMESA helped to found?
• What are some of the Basic Facts and Figures about COMESA?
• What are the Specific Objectives of COMESA?
• What is COMESA's Vision and Mission Strategy?
• What stages will COMESA pass through on it's way to achieving its mission?
• What programmes is COMESA implementing to achieve its mission?
• What are some of COMESA's Notable Achievements?
• What other measures has COMESA introduced in order to facilitate trade?
• Will the implementation of the COMESA tariff reduction programme and customs union lead to an adverse loss of government revenue to member states?
• Does the COMESA Teaty provide for the protection of industries that might be negatively impacted by the implementation of a free trade area, given the different levels of development in member states?
• Apart from facilitation programmes, what specific activities is COMESA carrying out to assist business in the region?
• What are some of COMESA's fastest investment growth areas with big potential for expansion?
• What are some of the (potential) benefits of regional integration under the COMESA arrangement?
• Are the goals of COMESA consistent with those of WTO?
• Are other Regional Economic Groups Duplicating COMESA's Efforts?
• Does the size of a regional grouping matter?
• What are COMESA's plans for the future?
  

Which countries are the current members of COMESA?

The current members of COMESA are: Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.

When and why was COMESA formed?

COMESA was established in 1994 to replace the Preferential Trade Area for Eastern and Southern Africa (PTA), which has been in existence since 1981. The PTA was established within the framework of the OAU's Lagos Plan of Action (LPA) and the Final Act of Lagos (FAL). Both the LPA and the FAL envisaged an evolutionary process in the economic integration of the continent in which regional economic communities would constitute building blocks upon which the creation of an African Economy Community (AEC) would ultimately be erected. The PTA, and hence COMESA, was established to take advantage of a larger market size, to share the region's common heritage and destiny to allow greater social and economic co-operation, with the ultimate objective of creating an economic community.

Top

What historical, consultative process preceded the formation of COMESA?

The African integration agenda was mooted in 1958, but it was not until 1960 and 1963 that OAU took practical steps. In 1965 the United Nations Economic Commission for Africa (ECA) convened a ministerial meeting of the then politically independent states of Eastern and Southern Africa to consider proposals for the establishment of a mechanism for the promotion of sub-regional economic integration. The meeting, which was held in Lusaka, Zambia, recommended the creation of an Economic Community of Eastern and Southern Africa States.

An Interim Council of ministers, assisted by an Interim Economic Committee of officials, was subsequently set up to negotiate the treaty and initiate programmes on economic co-operation, pending the completion of negotiations on the treaty.
In 1978, at a meeting of Ministers of Trade, Finance and Planning in Lusaka, the creation of a sub-regional economic community was recommended, beginning with a sub-regional trade area which would be gradually upgraded over a ten-year period to a common market until the community has been established. To this end, the meeting adopted the "Lusaka Declaration of Intent and Commitment to the Establishment of a Preferential Trade Area for Eastern and Southern Africa" and created an Inter-governmental Negotiating Team on the Treaty for the establishment of the PTA. The meeting also agreed on an indicative timetable for the work of the Intergovernmental Negotiating Team.

After the preparatory work had been completed a meeting of Heads of State and Government was convened in Lusaka on 21st December 1981 at which the Treaty established the PTA was signed. The Treaty came into force on 30th September 1982 after it has been ratified by more than seven signatory states as provided for in Article 50 of the Treaty.

The PTA Treaty envisaged its transformation into a Common Market and, in conformity with this, the Treaty establishing COMESA was signed on 5th November 1993 in Kampala, Uganda and was ratified a year late in Lilongwe, Malawi on 8th December 1994.

COMESA is thus a product of a very comprehensive, evolutionary consultative process.

Top

How is COMESA Structured Institutionally?
COMESA is made up of the following:

• The Authority of Heads of State Government, which is the supreme Policy Organ of the Common Market, responsible for policy direction and control of the performance of the executive functions of the Common Market and the achievement of its aims and objectives;
  
• Council of Ministers, which takes policy decisions on the programmes and activities of COMESA, including the monitoring and reviewing of its financial and administrative management;
  
• Committee of Governors of Central Banks which manages the COMESA Clearing House and ensures implementation of the Monetary and Financial Co-operation programmes; Intergovernmental Committee, composed of permanent secretaries from the member
• States responsible for the development and management of programmes and action plans in all the sectors of co-operation, except in the finance and monetary sector;
• Technical Committees, responsible for the various economic sectors and for administrative and budgetary matters;
  
• The Secretariat, headed by Secretary General, which provides technical support and advisory services to the member states in the implementation of the Treaty;
• The Consultative Committee of the Business Community and Other Interest Groups to provide a link and facilitate dialogue between the business community and other interest groups and organs of the Common Market; and
• Court Justice, which ensures the proper interpretation and application of the provisions of the Treaty, and to adjudicate any disputes that may arise among the member States regarding the interpretation and application of the provisions of the Treaty.

What Independent Institutions has COMESA Helped to Found?

The Eastern and Southern Africa Trade and Development Bank (the PTA Bank) - Provides trade and project finance

The PTA Re-insurance Company (ZEP -Re) - provides re-insurance within the region, thus helping to retain scarce resource within the region

The COMESA Court Justice

The Leather and Leather Products Institute (LPPI)

The COMESA Metallurgical Industries Association (COMESAMIA)

The Eastern and Southern Africa Business Association (ESABO)

The Federation of National Association of Women in Business in COMESA (FEMCOM)

The Pharmaceutical Manufacturers of Eastern and Southern Africa (PHARMESA)

The COMESA Bankers Association (BAPTA)

Top

What are some of the Basic Facts and Figures about COMESA?

Demographic Statistics

Macro-economic Statistics (billion US$ unless otherwise indicated)

Top

General Resources Facts

• Potentially Arable Land - 90 percent is yet to be exploited
• Water - 60% of the land area is covered by rivers and lakes; 95 percent of the water is economically unexploited
• Rivers - some of the largest (Zambezi, Congo, Limpopo) and the world's longest rivers (Nile) with enormous potential for exploitation for water transport, hydroelectric power, irrigation, and fisheries
• Lakes - Home to one of the world's largest fresh water lakes (Victoria), and some of the world's largest man-made lakes (Owen Falls, Kariba, Aswan)
• Tourist attractions - has many of the natural and man-made wonders of the World - Great Pyramids, Great Rift Valley, Serengeti Plains, Great Victoria Falls, Cradle of Mankind (Kobi, Fora, Lake Turkana, etc.)
• Hydroelectric potential - 700 billion KW, of which 96 percent remains unexploited
• Estimated Mineral Wealth - 300 billion metric tonnes of phosphates, 105 billion tonnes of iron ore, 200 billion tonnes of petroleum and large quantities of uranium, nickel, copper and cobalt
• The COMESA region has 60 per cent of Africa's livestock population (estimated at 300 million heads in 1997).

Top

What are the specific objectives of COMESA?
The aims and objectives of COMESA are defined in the Treaty and its Protocols. In summary, the main objective is to facilitate the removal of all structural and institutional weaknesses of member States, and the promotion of peace; security and stability so as to enable them attain sustained development individually and collectively as a regional bloc.

Among other things, COMESA member States have agreed on the need to create and maintain:

• a full free trade area guaranteeing the free movement of goods and services produced within COMESA and the removal of all tariffs and non-tariff barriers;
• a Customs Union under which goods and services imported from non-COMESA countries will attract an agreed single tariff in all COMESA states;
• free movement of capita and investment supported by the adoption of common investment practices and policies so as to create a more favourable investment climate for the COMESA region;
• a gradual establishment of a payments union based on the COMESA Clearing House and the eventual establishment of a common monetary union with a common currency; and
• the adoption of common visa arrangements, including the right of establishment leading eventually to the free movement of bona fide persons.

Top

What is COMESA's Vision, Mission and Strategy?
Vision
The COMESA Treaty envisions a fully integrated, internationally competitive regional economic community; a community within which there is economic prosperity as evidenced by high standards of living for its people, political and social stability and peace, and a community within which goods, services, capital and labour are free to move across national borders.

Mission
In the pursuit of this vision, the mission of COMESA is to achieve increased co-operation and integration in all fields of development, particularly in trade, customs
and monetary affairs; transport, communication and information; technology, industry and energy; gender, agriculture, environment and natural resources.

Strategy
The COMESA Treaty, which sets the agenda for COMESA, covers a large number of sectors and activities. However, the fulfilment of the complete COMESA mandate is regarded as a long-term objective. In order for COMESA to become more effective as an institution, it has defined its strategic focus within its mandate, over the next 3 to 5 years, as being Promotion of Regional Integration through Trade Development and Investment Promotion. An important objective in the pursuit of this strategy is to enable member States make the adjustments necessary for them to become part of the global economy within the framework of WTO regulations and other international agreements.

Top

What stages will COMESA pass through on its way to achieving its mission? Achievement of zero tariffs for all tradable goods among COMESA members (free trade area status) by the year 2000;

Establishment of a common external tariff, (CET) or customs union by the year 2004 with less restricted movement of people (common market status); and

Establishment of a monetary union, free movement of people including right of establishment (economic community status) by the year 2025.

What programmes is COMESA implementing to achieve its Mission?
In pursuit of the goals of a free trade area, a customs union, and an economic community, COMESA is implementing a wide range of programmes:

In Trade Liberalisation:

Tariff reduction programme - to reduce tariff by 100% by October 2000

Rules of Origin - 35% local value added but being revised to take account of substantive transformation;

Installation of customs management systems: Automated System of Customs Data Administration (ASYCUDA) and External Trade Database(EXTRADE)

Common External Tariff (CET) and preparations for COMESA Customs Union by the year 2004;

- Introduction of the COMESA Customs Document;
- Introduction of the Common Statistical Rules;
- Compilation, adoption and implementation of a common tariff nomenclature (CTN);
- Implementation of a CET of 0%, 5%, 15% and 30% by 2004.
- Study on the institutional and administrative framework of a customs union.
- Study on the removal of Non-Tariff Barriers.
- Technical assistance and capacity building to governments to ensure WTO compliance.

In Transportation and Communication Facilitation:

• Harmonisation of Road Transit Charges;
• COMESA Carrier's License;
• Overload Controls;
• Harmonisation of Maximum Vehicle Dimensions and axle load limits;
• COMESA third party motor vehicle insurance (Yellow Card);
• COMESA Customs Bond Guarantee System;
• Liberalisation of air transport services;
• Advanced Cargo Information System (ACIS) for tracking cargo;
• Establishment of a COMESA Telecommunication Company (COMTEL) and harmonisation of telecom regulations and policies; and
• Information Dissemination through the Trade information Network and COMESA Website.

Top

In Financial and Monetary Systems:

The monetary Harmonisation Programme, designed to allow COMESA to eventually achieve monetary union, is being redesigned to take account of recent structural and policy changes in COMESA countries;

Promotion of limited currency convertibility and introduction of a COMESA stored value smart cart to replace the COMESA travellers cheques;

The Clearing House is being restructured for it to offer:
- a political risk guarantee system
- a clearing mechanism
- a SWIFT regional centre

Through the PTA Bank, mobolise trade and development finance to assist market integration and reduce economic disparities between member States. As at the end of 1998, cumulative project approvals stood at US$ 164 million, net of cancellations, in support of seventy-nine (79) project loans and five (5) equity participants.

Through the COMESA Re-Insurance Company (ZEP-RE), provide an opportunity to keep some of the re-insurance business in the region.

In Production and Investment Promotion:

• Up-dating of information on trade and investment laws in COMESA;
• Harmonising investment codes;
• Developing National and Regional Investor Roadmaps; Providing information on investment opportunities;
• Organising joint fora for entrepreneurs or project sponsors with potential investors;
• Providing project and trade finance through the PTA Bank and re-insurance through the
• PTA-Reinsurance Company; Introduction of a political risk guarantee facility; Developing energy strategies and carrying out energy audits and surveys;
• Assisting Member States to promote co-operation and develop capability in the production, processing and marketing of metals and allied engineering products;
• Promotion of the development and promotion of agro-industries in the COMESA region;
• Undertaking of diagnostic studies and provision of technical advice to all cement plants in COMESA countries; and
• Implementing the programme on a Common Investment Area.

In Quality Improvement:

Through the Standards Quality Metrology and Testing (SQMT) project, harmonising quality standards in Member States to conform to international standards

Upgrading of quality and safety of fishery products and

Strengthening of national bureaux of standards.

In Free Movement of People, Implementing:

Protocol on the gradual relaxation and eventual elimination of visa requirements

Protocol on the free movement of persons. Labour services, and the right of establishment and residence.

Top

What are some of COMESA's Notable Achievements?

The areas where COMESA has made good progress include the following:

• Removal of tariff barriers: As at 1st April 1999, 2 countries had published the 90% tariff reduction, 8 countries had published the 80% tariff reduction, 1 country the 70% reduction and 3 countries the 60% reduction;
• Elimination of non-tariff barriers: The classic non-tariff barriers (quantitative restrictions, licensing, import permits and restrictive foreign exchange controls) have been largely eliminated;
• Rules of origin have been simplified, with more scope for import content, by the adoption of a 35 percent local value added criterion, with the rules undergoing further changes to take into account developments at the WTO and WCO, these further changes taking place as a result of a study being financed by USAID;
• The adoption of a single COMESA Customs Document (COMESA-CD) to replace the previous multiplicity of documents (up to 32 in some countries) and also serve for clearance of customs warehousing ,re-export and transit purposes;
• Installation of efficient customs management systems to facilitate date and revenue collection and establish the basis for a harmonised tariff: the Automated System of Customs Data (ASYCUDA) installed in 12 countries, Eurotrace in 19;
• A Customs Bond Guarantee Scheme to facilitate transit traffic and reduce the cost of financing transit goods;
• Establishing the Trade Information Network (TINET) which now has some 47 computerised focal points set up in 20,Member States. These focal points provide information on all export and import opportunities available in each country including trade flow analyses, company registers, comparative COMESA tariffs, non tariff barriers, and macro economic profiles of Member States.
• COMESA has also set up its own Website (http://www.comesa.int) to provide information to business interests from within and outside COMESA.

Top

What other measures has COMESA introduced in order to facilitate trade?

In order to facilitate the movement of goods and services, COMESA has introduced the following:

• Harmonised Road Transit Charges introduced in 1991 and currently being implemented by 10 Member States.
• COMESA Carrier's License introduced in 1991 to replace national road permits and currently in operation in 9 mainland countries;
• Maximum Vehicle Dimensions currently being implemented by 5 Member States;
• Advance Cargo Information System that allows railway, port and road authorities and users to track cargo through their distribution systems, thereby improving efficiency and reducing costs.
• Introduction of a COMESA Carrier Licence to replace the need for individual national permits;
• Adoption of common regulations for axle load limits to facilitate movement by road;
• A COMESA Third Party Motor Vehicle Insurance scheme (the Yellow Card) to allow vehicles to circulate freely, at present operational in 12 Member States, but with private insurance companies in more States, including South Africa, Botswana, Lesotho and Mozambique, expressing the wish to join the scheme;
• Liberalisation of air transport services within the common market by October 1991;
• Co-ordination and harmonisation of maritime transport policies in order to rationalise the use of existing ports and facilities;
• Launching of COMTEL inter-State telecommunication of tariffs; establishment of a common frequency management and monitoring scheme; and liberalisation of services and commercialisation of operations of the existing telecommunications corporations.

As a result of all the above measures:

• Intra-COMESA trade, valued at about US$4.2 billion, is growing at the rate of 20% per annum. Trade with third countries is growing at about 7% per annum.
• Transport transit facilitation measures have resulted in a reduction of costs by 25%.
• Inter-state movement of persons, goods and means of transport facilitated.

Top

Will the implementation of the COMESA tariff reduction programme and customs union lead to an adverse loss of government revenue to member States?

The concern that tariff reduction entails loss of Government revenue is understandable, but is grossly exaggerated and not grounded in fact. This is because whatever revenue is foregone by the Government get ultimately injected directly into the national economy. This in turn reduces the landed cost of goods competitive and affordable, thus expanding consumption demand and stimulating greater productivity. The ultimate result will have sufficient profit to reinvest in other economic ventures; expand economic activities; increase employment opportunities; broaden the tax base for internal taxes; encourage voluntary compliance on duty payment by all those eligible to duty payment; eliminate duty/tax evasion; and reduce smuggling of goods, thereby increasing revenue yield.

Does the COMESA Treaty provide for the protection of industries that might be negatively impacted by the implementation of a free trade area, given the different levels of development in member States?

The standstill provisions in the Treaty and specifically Article 49 makes provisions for the protection of infant industries, and includes safeguard measures in the event of serious disturbances in the economy of a member state. The Treaty enjoins Member States to furnish Council with adequate information before taking actions.

Top

Apart from facilitation programmes, what specific activities is COMESA carrying out to assist business in the region?

• Conducting demand/supply surveys;
• Organinsing buyer/seller meeting;
• Organising training for cross-border traders;
• Organising comprehensive workshops on doing business in COMESA;
• Providing information on business information and opportunities through TINET and COMESA;
• Specific enterprise assistance and marketing by identifying specific export bottlenecks and preparation of an export expansion plan;
• Promoting activities of women entrepreneurs in the region, through the Federation of National Association of Women in Business (FEMCOM), by offering business training and orientation; forging linkages with mainstream business groups and organisations, and establishment of business information centres;
• Simplifying COMESA rules of origin;
• Introducing efficient payment systems; and
• Providing trade and project finance through the PTA Bank, and re-insurance through the PTA Re-insurance Company.

What are some of COMESA's fastest investment growth areas with big potential for expansion?

• Information and communications - a huge potential to leapfrog into the cutting edge of ICT, including e-commerce;
• Agribusiness - including horticulture and food processing; Mining - there is a large untapped mineral wealth;
• Tourism - including ecotourism and private wildlife sanctuaries; Financial services - including payment systems and development f new products.

Top

What are some of the (potential) benefits of regional integration under the COMESA arrangement?

• Results in a more efficient allocation of regional resources;
• The large market promotes competition leading to better quality, fair-priced goods;
• Competition also accelerates the process of technological change;
• The larger market encourages longer production runs and better, cost-effective utilisation of production capacity,
• The single market with harmonised policies improves market access and reduces, for instance transport and communication costs;
• Regional consumers benefit from greater product diversity;
• Integration under COMESA with a common external tariff can act as a learning and adjustment period for 'infant' firms as they prepare to complete globally;
• The large market acts as a stimulus for investment; Acts as a device for binding and committing member States to certain economic reforms thus increasing their credibility;
• Acts as a signal to partners that member countries are willing to play by collective rules;
• Increases Member States' bargaining power with third parties;
• Acts as a co-ordination mechanism for taking up collective positions; and
• Provides a forum for co-operation in matters of peace and security.

Top

Are the Goals of COMESA consistent with those of the WTO?

COMESA's goals are to improve the living standards of its people and to develop their overall economies through integration of trade and investment. Integration includes trade liberalisation (trade free of all barriers) and harmonisation of investment incentives and regulations aimed at stimulating intra-regional as well as attracting foreign investment.

WTO aims to enhance the living standards of all people the world over by liberalising trade (eliminating barriers to trade, thereby keeping the prices of goods that consumers pay as close to their production cost as possible) and streamlining investment regulations and measures, especially those related to trade.

From the aforegoing, it is obvious that the goals of COMESA are consistent with those of the WTO. It is for this reason that the WTO recognises regional trade arrangements such as COMESA and makes specific provision for them under its rules-bases trading system. Regional trade arrangements are recongnised under WTO under Article XXIV of the GATT 1994 and under the Enabling Clause. COMESA is notified to WTO under the Enabling Clause. As at 31st March 1999, there were 109 regional trade arrangements to WTO.

Are other Regional Economic Groups Duplicating COMESA's Efforts? Geographically, COMESA covers a region within which other regional groupings such as the Southern Africa Development Community 9SADC), the East African Community (EAC), the Intergovernmental Authority on Development (IGAD) and the Indian Ocean Commission (IOC) also operate. Although these organisations also include as their aims to promotion of regional co-operation and integration, they are neither in competition with, nor wishing to duplicate the efforts of COMESA. On its part, COMESA sees its contribution to the process of regional integration and regional economic development as being able to work together, and to co-operate fully, with its member States, and the other regional bodies to which its member States are affiliated, and build upon the achievements it has already made in its priority areas.Moreover, COMESA perceives these sister regional groups as examples of the variable speed approach to regional integration. Progress within them will facilitate the eventual creation of the Common Market for Eastern and southern Africa. For instance, EAC is a fast track for implementation of COMESA programmes. To strengthen complementarity among these groupings co-ordinating and consultative mechanisms exist and are being strengthened, through for example memoranda of understanding, joint committees, and participation in each other's meetings. Since the ultimate objective is the creation of an African Economic Community, whatever little overlap might exist is transitory.

Top

Does the size of a regional groping matter?

• In terms of geographical coverage, number of countries and population, COMESA is currently the largest regional economic grouping in Africa, stretching from Swaziland in the South to Egypt in the North. Because of its size, some critics feel that it is too unwieldy. We in COMESA disagree with this conclusion for four reasons:
• First, a regional grouping should not be judged on the basis of geographical size alone. The size of the market is determined more by the size of the individual economies and hence potential purchasing power. The combined GDP of COMESA countries is still less than that of a small European country. Even on the question of geographical scope, there are many trading arrangements much larger than COMESA, including many separated by sea (e.g. APEC and EU/Republic of South Africa). Because of developments in information and communication technology, distance between COMESA countries is not an inhibiting factor.
• Second, the large grouping increases the possibility of encompassing a critical number of core countries that would drive the integration process forward.
• Third, COMESA provides for the diversity in resources and economic development in the group through a variable speed-approach (variable geometry), enabling pace setters to move faster and slower members the motivation to catch up; and
• Fourth, COMESA subscribes to OAU's goal of an economically united Africa, through the African Economic Community. Africa cannot afford to organise economic groupings solely on the basis of common cultural and ethnic background. This would be retrogressive and a return to the balknisation of Africa that took place in Berlin in 1884.

What are COMESA's plans for the future?

• The long-term goal of COMESA is to achieve a fully integrated prosperous, economic community. In the pursuit of this goal, the priorities of COMESA are to:
• implement the COMESA Free Trade Area by the year 2000
  implement the measures required to make COMESA a Common Investment Area;
• draw up a road map for the COMESA Common External Tariff and start its implementation;
• improve the way in which the business activities of the private sector in the region are supported with access to commercially valuable information through further development of integrated COMESA database made available through a variety of media, including the COMESA Website on the Internet;
• continue to facilitate the intra-regional movement of goods, services and people through the implementation of transport and communication facilitation programmes;
• improve the profile of the region as an investment location by publicising the investment opportunities and by working with member States to reduce the barriers to investing and doing business in the region.
• continue to provide financial services to our private sector through the COMESA specialised financial institutions and to work with national administrations on aspects of fiscal and monetary policy co-ordination;
• continue to pursue the establishment of an Africa Guarantee Facility, which already enjoys the support of the World Bank, in order to improve the environment for trade and investment;
• support the productive sector of the economy by establishing links with successful industries throughout the world to facilitate investment and technology transfer;
• strengthen the COMESA Court of Justice to enable it enforce rules in accordance with the Treaty;
• work closely with international governments and orgnisations to ensure that the interest of COMESA are taken into account, especially in WTO fora, in the agreement on EU-ACP future relations and in the US government's trade initiatives for Africa; and
• work closely with other regional integration organisations in Africa to ensure co-ordination of activities wherever possible.

Top