Fresh Queries Over Comesa's Viability

By Washington Akumu, The Nation (Nairobi), 15 May 2001

The report by a government fact-finding mission to five Comesa states raises serious questions on the viability of the bloc's controversial and ambitious Free Trade Area as a tool for boosting commerce in the region.

It also puts in serious doubt the ability of Comesa to police its own trade regulations to ensure that they are not abused by profiteers.

The bone of contention here is the Rule of Origin which the mission felt was being flouted in some cases.

But the report also admits a chilling fact; that Kenya can not produce efficiently, despite its enthusiasm in adopting the FTA.

It is also apparent that Comesa is yet to come up with standard documentation and verification procedures to ensure that its rules are adhered to. It is interesting that the report calls for harmony in the issuance of Certificates of Origin.

Launched to muted reception on October 31, 2000, with only nine members out of a possible 20 signing the document, the FTA has been criticised in some quarters as having been too hurried and unplanned.

Some analysts argue that in a region where countries are as disparate as is the 400 million-person Comesa market, it was imprudent to expect members to immediately and successfully adopt a zero-tariff regime in intra-regional trade.

They support a gradual, product by product approach, that gives breathers to countries that feel they are not ready to allow zero tariffs on a particular set of imports and those that want to negotiate bilaterally. Greater concentration on joint infrastructural projects to achieve a level of parity in some sectors is also deemed necessary.

A good example of this is the joint power pool of the Southern African Development Coordination (SADC) which has ensured efficient supply of electricity in the region. It has also helped members avoid the kind of costly disruptions of the type that Kenya experienced last year, making its products uncompetitive.

While Comesa secretary-general Erastus Mwencha says that the low adoption was a sign of a gradual approach, the bottomline is that the opportunity cost of the Comesa FTA was too high for some states, and that is why they gave the much-hyped trade arrangement a wide berth.

Beyond the advantage of shared borders, Comesa is an assorted lot of countries on different scales of development. There is no macro-economic convergence on key indicators, a factor that was used to underpin trading blocs such as the European Union.

Comesa members include latest entrant Egypt, which has a fairly sophisticated economic base supported by strong agricultural and manufacturing sector. In this same league is Mauritius, one of the region's stronger economies.

Kenya and Zimbabwe, despite their recent sub-zero economic growth figures and basket-case credentials, are still considered some of the countries with the strongest economic foundations in the region.

On the very extreme end of the continuum are states like Eritrea and Djibouti that are not only relatively poor but also young. They also have little to sell.

Such wide disparities readily come out in the mission's report. For instance while Egypt is able to subsidise its low end sugar users and offer rice growers cheaper electricity, seeds and water for irrigation, the same cannot be said for Kenya.