Common Market for Eastern and Southern Africa- COMESA

Common Market for Eastern and Southern Africa – COMESA

The Common Market for Eastern and Southern Africa (COMESA) was formed in December 1994 to replace the former Preferential Trade Area (PTA) from the early 1980s in Eastern and Southern Africa. COMESA was created to serve as an organization of free independent sovereign States that have agreed to cooperate in developing their natural and human resources for the good of all their people. In this context, the main focus of COMESA has been on the formation of a large economic and trading unit to overcome trade barriers faced by individual States.

The member States of COMESA are: Burundi, the Comoros, the Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Sudan, Swaziland, Seychelles, Uganda, Zambia and Zimbabwe.

The objectives of COMESA reflect its priorities to promote sustainable economic development:

to attain sustainable growth and development of the member States by promoting a more balanced and harmonious development of its production and marketing structures;
to promote joint development in all fields of economic activity and the joint adoption of macro-economic policies and programmes to raise the standard of living of its peoples and to foster closer relations among its member States;
to co-operate in the creation of an enabling environment for foreign, cross border and domestic investment including the joint promotion of research and adaptation of science and technology for development;
to co-operate in the promotion of peace, security and stability among the member States in order to enhance economic development in the region;
to co-operate in strengthening the relations between the Common Market and the rest of the world and the adoption of common positions in international fora; and
to contribute towards the establishment, progress and the realisation of the objectives of the African Economic Community.

The organizational structure of COMESA consists of the following Organs:

The COMESA Heads of State and Government (COMESA Authority);
The Council of Ministers
The COMESA Court of Justice
The Committee for the Heads of Central Banks
The Intergovernmental Committee
The Technical Committees;
The Secretariat.

Selected regional indicators for COMESA (2014)
GDP	$657.4 billion
GDP per capita	$1,335.0
Area (sq. km)	12 million sq.km
Total population	492.5 million
Total imports	$183 billion
Total exports	$95 billion

Source: United Nations Conference on Trade and Development, statistical database[1]

COMESA has established a number of institutions to support the private sector. These include:

The Trade and Development Bank for Eastern and Southern Africa (PTA- Bank);
The COMESA Clearing House;
The COMESA Leather and Leather products Institute (LLPI);
The COMESA Re-Insurance Company (ZEP Re);
The COMESA Monetary Institute (CMI);
The African Trade Insurance Agency (ATI);
The COMESA Competition Commission (CCC);
The COMESA Regional Investment Agency (RIA);
The COMESA Business Council (CBC)
The Alliance for Commodity Trade for Eastern and Southern Africa (ACTESA);
The Federation of National Associations of Women in Business.

COMESA Pillars for Integration

Page Source: www.uneca.org Accessed: April 2020

Trade and Market Integration Macroeconomic Policy Convergence Free Movement of Persons Peace, Security, Stability and Governance Harmonisation of Sectoral Policies

Trade and market integration has had a central role in the evolvement of COMESA given its background as a Preferential Trade Area (PTA) for Eastern and Southern Africa. The previous foundation has therefore supported the establishment of institutions that foster trade liberalization and trade facilitation programmes. In addition, article 4 of the Treaty Establishing COMESA[1] reiterates the removal of obstacles to the free movement of persons, labour and services, along with the right of establishment and residence for investors in the COMESA region.

At present, COMESA operates a free trade area (FTA) among fifteen of its member States, Burundi, the Comoros, Djibouti, Egypt, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, the Sudan, Uganda, Zambia and Zimbabwe. The Democratic Republic of Congo joined the COMESA FTA in December 2015 and is currently finalizing its tariff phase-down. A Customs Union was subsequently launched by COMESA in 2009. From the time of the launching, member States agreed on a three-year transitioning period to domesticate the customs management regulations, common external tariff and the common tariff nomenclature that would gradually form the Customs Union. The plan was to finalize the Customs Union by 2012, however, even after a second postponement of the transition period to 2014, the Custom Union is still not operational.

In October 2008 COMESA, East African Community and Southern African Development Community agreed to negotiate a tripartite free trade agreement amongst the regional economic communities. After lengthy negotiations, the tripartite FTA was officially launched in June 2015. Although 17 out of the 26 Member States have signed the Tripartite FTA Agreement, it has not yet entered into force due to outstanding ratifications. Moreover, remaining technical work on tariff liberalization, rules of origin, and trade remedies are likewise delaying the process. However, interim arrangements were agreed to operationalize the Tripartite FTA, which would effectively make it the largest FTA in Africa. It has also been estimated that the Tripartite FTA could boost intra-regional trade by as much as one third.[2] It is therefore important that remaining member States join the FTA avoid undermining the establishment of the Tripartite FTA.

The Investment Agreement for the COMESA Common Investment Area (CCIA) was adopted in May 2007. It is an instrumental tool that the COMESA Secretariat anticipates will ensure a stable investment environment that promotes and protects cross-border investments. It aims at harmonizing investment policies, regulations and legislation, setting the standards for investor and investment protection and encouragement along with creating an institution to facilitate intraregional economic community trade. For instance, expanding the number of bilateral Avoidance of Double Taxation Agreements, promoting arbitration mechanisms for investment disputes, harmonizing all company registration procedures, and developing capacity-building programmes on investors’ services for the national investment promotion agencies. Moreover, COMESA’s trade facilitation instruments, including the Regional Customs Transit Guarantee scheme and Yellow Card, are effective in the COMESA region and have been adopted by non-COMESA member States including Tanzania and South Sudan. Angola and Mozambique are soon expected to enlist even though they are not COMESA members.

[1] Treaty Establishing COMESA. Available from https://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/200605….

[2] United Nations Economic Commission for Africa. Tripartite Agreement could boost intra-regional trade by one third (2016) http://www.uneca.org/stories/tripartite-agreement-could-boost-intra-regi… (accessed 1 July 2016).

COMESA has adopted a number of treaties and protocols related to macroeconomic policy convergence to further benefit from deepened integration. In 1992, The Authority of Heads of State and Government adopted the COMESA Monetary Cooperation Programme towards the establishment of a Monetary Union in the year 2025. The date for the Achievement of the Monetary Union was later changed to 2018 by the COMESA Council of Ministers in 2006. The programme includes a number of stages leading to the establishment of the Monetary Union, namely, consolidation of existing instruments of monetary cooperation; introduction of limited currency convertibility and informal exchange rate union; formal exchange rate union and coordination of economic policies by a common monetary institution; and eventually realizing a full Monetary Union involving the use of one common currency issued by a common Central Bank. Thus, to achieve the Monetary Union, it was considered essential that the member States first undergo a process of monetary harmonization to attain macroeconomic convergence. In order to assess the implementation of the programme by member States, a number of convergence criteria were formulated, consistent with the African Monetary Cooperation Programme (AMCP). The COMESA Monetary Institute is managing the preparatory work for achieving the Monetary Union 2018 target.

COMESA created two Sub-Committees in order to enhance the implementation of the COMESA Monetary Integration Programme. The Monetary and Exchange Rates Policies Sub-Committee is responsible for devising appropriate monetary policy strategies and policy instruments while the Financial System Development and Stability Sub-Committee is responsible for developing strategies to diversify financial institutions and instruments in the region. The two Sub-Committees meet once a year to deliberate on their respective annual work plans. Moreover, the COMESA Convergence Council, comprising Ministries of Finance, Trade, Industry and Central Bank Governors was created by the 7^th Summit of the COMESA Authority of Heads of State and Government in 2014 in Kinshasa, Democratic Republic of Congo in order to implement the COMESA Multilateral Macroeconomic Framework.

The COMESA Convergence Council is responsible for managing the implementation of the COMESA Multilateral Fiscal Surveillance Framework. However, to boost due to the slow implementation

The implementation of the programme, however, has been sluggish. To enhance the implementation of currency convertibility, member States were grouped into four clusters: Southern African subgroup; Northern African subgroup; Central and Eastern African subgroup; and Indian Ocean subgroup. Significant progress in implementation has been made in the Central and Eastern African subgroup in comparison to the others. The Northern African subgroup has, however, recently agreed on an action plan for the implementation of currency convertibility and has started quoting exchange rates of their neighbouring countries’ currencies in their forex Bureaus. Although implementation has been slow, progress is being made.[1]

[1] COMESA, “Programmes” http://programmes.comesa.int/index.php?option=com_content&view=article&i… (accessed 30 May 2016).

There are two primary legal instruments governing the free movement of people in COMESA, the Protocol on the Gradual Relaxation and Eventual Elimination of Visa Requirements, and the Protocol on Free Movement of Persons, Labour, Services, the Right of Establishment and Residence. Since the adoption of the Free Movement Protocol in June 1998, only Burundi, Kenya, Rwanda and Zambia have signed, and Burundi being the only country ratifying it. Mauritius, Rwanda and Seychelles have since waived visas to all COMESA citizens, while Zambia has issued a circular waiving visas and visa fees for all COMESA nationals on official business.[1] In order to meet national implementation challenges, the regional economic community set up the COMESA Model Law on Immigration to harmonize national laws and practices of member States, yet domestication is still slow.

On a much greater platform, TFTA only included a narrow element of free movement of business persons in the greater tripartite area[2]. While the COMESA Business Council is actively working of movement of business people in COMESA region, the same programme has also been addresses at the tripartite level.[3]

[1] COMESA, Three Member States drop visa requirements (Lusaka, Zambia, 2014). Available from http://www.comesa.int/attachments/article/1433/e-comesa_newsletter_440.pdf.

[2] EAC-COMESA-SADC, Agreement Establishing a tripartite Free Trade Area among the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community (2008). Available from http://www.eac.int/sites/default/files/docs/agreement_tripartite-fta_201….

[3] COMESA Business Council, COMESA Business People: Free Movement – More Trade (Lusaka, Zambia, 2007). Available from http://www.comesabusinesscouncil.org/comesabusinesscouncil/sites/all/the….

The strengthening of peace, security, stability and good governance are stated as one of its aims and objectives in article 3(d) of the Treaty Establishing COMESA. The fourth summit of the COMESA Authority that was held in Nairobi, Kenya in May 1999 mandated Ministers of Foreign Affairs of COMESA member States to meet annually to deliberate on matters regarding the promotion of peace, security and stability in the regional economic community. The workings were aligned with the framework of the African Union’s Peace and Security Architecture that work with regional economic communities on issues relating to preventing, managing and resolving conflicts on the continent.

The Committee on Peace and Security, which is composed of high-level officials of the Ministries of Foreign Affairs of Member States, correspondingly serves to enhance accountability and promote good governance in the regional economic community. More importantly, the Committee makes recommendation for the decision-making organ, the COMESA Authority. Recognizing the complexity of the conflicts in the region the COMESA Authority decided on a three-tier system for faster intervention, including programmes to strengthen stability, prevention of conflicts, and post conflict programmes for member States. COMESA has also established a Committee of Elders to better pursue the objectives.

To strengthen peace and ensure stability, COMESA set up the structures for the engagement of both State and non-State actors, and also strategic stakeholders across borders. Its conflict prevention programme is one of the established mechanisms to avert conflicts from breaking out by dealing with structural and economic instigating factors. In this context, the three primary programmes are: COMESA Conflict Early Warning System that is a part of the African Union Continental Early Warning system; WAR Economy Component of the Conflict Prevention, Management and Resolution Strategy for the Eastern and Southern Africa Region; and the Regional Political Integration and Human Security Support Programmes that aims to tackle post-conflict management issues for countries emerging from conflict not to relapse. An example is the current six Trade Information Desks that successfully serve the purpose of trading for peace and stability in conflicted border posts.[1]

COMESA has, together with the European Union, Intergovernmental Authority on Development, East African Community and the Indian Ocean Commission, established an action plan to ensure regional maritime security in the fight against piracy. COMESA is, for instance, in the forefront of combating money laundering and financial intelligence of piracy in its region.[2]

[1] United Nations, “Role of COMESA in Consolidating Peace, Security, Governance and Development within the context of Agenda 2063” (Africa Renewal, presentation given by Elizabeth Mutunga, Head of Governance, Peace and Security, 2014). Available from http://www.un.org/africarenewal/sites/www.un.org.africarenewal/files/COM….

[2] European Union, Programme to Promote Regional Maritime Security (Brussels, 2013). Available from http://ec.europa.eu/europeaid/sites/devco/files/aap-financing-africa-ind….

In conformity with the objectives stated in article 3 of the Treaty Establishing COMESA, member States have agreed to adhere to a wide number of principles. These principles include: inter-State cooperation, harmonization of policies and programmes among the member States and the active cooperation between neighbouring countries, and the promotion of a peaceful environment as a pre-requisite for their economic development. COMESA has, therefore, undertaken a number of initiatives to implement these principles – for example, the Programme on Climate Change Adaptation and Mitigation in the Eastern and Southern Africa Region, initiated together with EAC and SADC.

The regional economic community also has a comprehensive gender policy, including an implementation plan and a Gender Unit for its member States. Another example is the COMESA infrastructure fund that intends to raise a minimum of $1 billion for bankable infrastructure projects covering transport, information communications technology, energy, and transboundary water in the near future.[1] The COMESA region has undertaken Road Sector Management and Funding Reforms where most of the countries have set up road funds and road development agencies in order to maintain both the regional and national road networks.

In November 2007, COMESA adopted the Model Energy Policy Framework to provide its member States with harmonized guidelines that would facilitate energy policy harmonization in the region. This Framework will improve efficiency and increase investment. In information and communications technology policies, COMESA is implementing a Cyber Security project, a policy and a model bill, and an implementation roadmap to assist member countries in the light of existing national, regional and international instruments, when they are developing policies on cyber security.[2]

A key objective of the regional economic community is related to physical and institutional connectivity. COMESA has, in this regard, set up a number of infrastructure progarmmes intended to promote and lay emphasis on regional coordination and harmonization in the various modes of transport, telecommunications and energy. The programmes, therefore, cover development of harmonized policies and regulatory environments, facilitation in the development of physical infrastructure and infrastructure facilities. A number of key strategies have been identified to be employed to in order to achieve the infrastructure strategic objective indicated above. They include the following: development and revision of model policies and regulations (for Transport, ICT, and Energy); development of aid for trade programs along the major regional corridors including the establishment of One Stop Border Posts (OSBPs); development of legal and institutional frameworks for public private sector partnerships in order to increase the private sector participation in infrastructure development; and Implementation of a communication strategy for the dissemination of information on development of infrastructure projects to all stakeholders.

Over the years, COMESA has developed, adopted and implemented a number of model policy and regulatory guidelines in transport, ICT and energy, trade and transport facilitation instruments and priority infrastructure projects. Moreover, a number of regional associations of regulatory authorities have also been established in order to facilitate policy and regulatory harmonization as well as fostering capacity building and information sharing.

[1] Common Market for Eastern and Southern Africa, COMESA Region Key Infrastructure Projects (Lusaka, Zambia, 2014). Available from http://www.comesa.int/attachments/article/842/COMESA%20REGION%20KEY%20EC….

[2] Africa Union, Status of integration in Africa (Addis Ababa, 2013). Available from http://www.au.int/ar/sites/default/files/SIA%202013 (latest)_En.pdf.

For More Information

The headquarters of COMESA

COMESA Centre,
Ben Bella Road,
P. O. Box 30051
Lusaka, Zambia

Tel: +260 211 229 725/35

Fax: +260 211 225 107

E-mail: comesa@comesa.int

Web: http://www.comesa.int

Resources

COMESA Legal Texts and Policy Documents - TRALAC

COMESA - UNECA