Agreement: Cape to Cairo trade
African leaders have agreed in principle on the establishment of a Cape to Cairo free trade bloc encompassing three existing trade and development areas across Africa.
At a tripartite summit hosted by South African president Jacob Zuma, Africa’ s leaders agreed to cooperate on a possible free trade area to enhance cooperation and trade between 26 African nations within the Southern African Development Community (SADC), East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA).
This free trade area has been mooted for some years, but leaders meeting in Johannesburg, South Africa, this weekend have now agreed on the need to formally cooperate to the benefit of the continent as a whole.
The three trading regions have a combined population of around 700 million people and a combined GDP of around USD625 billion, expected to top USD1 trillion within the next two years.
A free trade zone would allow the smooth movement of goods and services through the member countries, improving business and trade opportunities.
The South African Presidency said in a statement that South Africa was honoured to host this crucial and historic gathering which takes the continent forward in its quest for sustainable development and economic growth. It said the tripartite summit would give further impetus on infrastructure development, supporting industrial development and diversification to build production capacity among the member states in order to take advantage of a larger more open regional market.
The Presidency noted that at the first Tripartite Summit that was held on 22 October 2008 in Kampala, Uganda agreed on a programme of harmonisation of trading arrangements amongst the three RECs (COMESA-EAC-SADC), free movement of business persons, joint implementation of inter-regional infrastructure programmes as well as institutional arrangements on the basis of which the three RECs would foster cooperation.
The latest summit also aims to build on the improved economic development prospects and potential in Africa; promote social and economic development; reduce poverty and inequality; deepen integration to compete more effectively in the global economy.
There is no single country that can prosper on its own, President Zuma said.
However, leaders acknowledged there were economic disparities and political instabilities in some regions, which could hamper efforts to improve trade. Other hurdles included inefficient bureaucracies and poor infrastructure in some regions.
Swazi King Mswati III, chairman of COMESA, noted that integration of the trading blocs could not happen overnight. “ There is a lot of work to be done,” he said.
Zuma told the World Economic Forum meeting on Africa last month that Africa needed to urgently rethink its partnerships.
He said: “ If Africa is one of the fastest-growing regions and has a billion people, then we need to think differently about how we interact with the world. We also need to consider how we interact among ourselves. We need to develop a common approach to the problems of the continent.”