At least 14 countries will trade freely within East, Central, and Southern Africa from Thursday, July 25 following the ratification of a Tripartite Free Trade Area (TFTA) Agreement that flattens the East African Community (EAC), the Southern African Development Community (Sadc) and Common Market for Eastern and Southern Africa (Comesa) into a single commerce bloc.
This follows the submission of instruments of ratification by 14 out of the 29 partner states making up the Tripartite, thus meeting the threshold required for the TFTA to enter into force.
“Malawi, Lesotho, and Angola are the latest member states to ratify the agreement making it 14 countries. It takes effect on July 25, 2024,” Christopher Onyango, Director of Trade and Customs at the Comesa Secretariat in Lusaka, Zambia, said.
“This means that member states can start trading. But there are technical things which have to be put in place before they can begin trading freely.”
The other countries that have ratified the agreement include Botswana, Burundi, Egypt, Eswatini, Kenya, Namibia, Rwanda, Uganda, South Africa, and Zambia.
Kenya, Rwanda, and Uganda have ratified the tripartite, while for the Democratic Republic of Congo and Tanzania, ratification is pending.
“In a significant way, it addresses the problem associated with membership in multiple regional economic communities,” said Onyango.
The Tripartite offers full liberalisation of tariff lines and elimination of non-tariff barriers to trade.
The Tripartite configuration also presents best practices in fostering transport and trade facilitation instruments and value chain development at regional levels which are key to boosting intra-African trade.
Among the key challenges hindering the operationalisation of the TFTA is the absence of a dedicated secretariat and institutional structure to coordinate and implement its programmes and activities.
“Presently, coordination is being conducted on a rotational basis among the three RECs. Therefore, the first thing the Tripartite will have to do is come up with a regional headquarters to coordinate its activities,” said Onyango.
“The other challenge has been acute financial constraints. Inadequate financing seriously slowed down negotiations of the various pillars as the RECs rely on their respective staff to facilitate these negotiations.”
At the moment, only the market integration pillar is being supported by the African Development Bank.
“This also explains why progress in negotiations in the infrastructure and industrial development pillars are slower, yet they are key in fostering sustainable trade and development,” he explained.
The Comesa – EAC – Sadc TFTA, which was signed in 2015 comprises 29 countries representing 53 percent of the African Union Membership, more than 60 percent of continental GDP ($1.88 Trillion; 2019), and a combined population of 800 million.
Under the market integration pillar, the Tripartite has a more ambitious tariff liberalisation schedule compared to the African Continental Free Trade Area– the world’s largest free trade area bringing together the 55 countries of the African Union and eight regional economic communities to create a single market for the continent.
Whereas the latter’s level of tariff liberalisation ambition is 90 percent for non-sensitive products, seven percent for sensitive products, and three percent for exclusion list, the tripartite level of ambition is 100 percent tariff liberation.
Except for general and specific security exemptions of which 60 percent to 85 percent of tariff lines are to be liberalised upon entry into force of the agreement and 15 percent to 40 percent of the remaining tariff lines are to be negotiated within five to eight years.