- Kenya’s President William Ruto is urging Africa to shift from exports of raw materials to industrial processing of goods. He says African economies must change tact to revamp import/export trade.
- Comesa bloc has a combined GDP of $805 billion and a global export/import trade in goods worth $324 billion.
- In a radical move, Dr Ruto calls for merging of Comesa, the East African Community, and the Southern African Development Community.
Kenya’s President William Ruto is calling on the Common Market for Eastern and Southern Africa (COMESA) member-state to embrace industrial processing of to boost the value of exports and in turn enhance Africa’s share of global trade.
In a radical shift that is also seeking to boost trade across Africa, Dr Ruto is also calling for the consolidation of trading blocs Comesa, the East African Community, and the Southern African Development Community.
Industrial processing to boost Africa trade
By joining the neighbouring trading blocs, Dr Ruto said the move will help realise the economic aspirations and goals of the African Continental Free Trade Area (AfCFTA).
AfCFTA is seeking to establish a single market for goods and services across Africa. It envisions elimination of tariffs on 90 percent of goods traded within Africa, within a phased approach to liberalisation. Policymakers project that AfCFTA will push up the continent’s income by $450 billion by 2035.
“It is also time we elevated the African Union to have the power to negotiate for the collective interests of Africa,” he added. Kenya’s president noted that the move will boost Africa’s bargaining power on the global scene.
He was speaking during the 22nd Comesa Summit of Heads of State and Government in Lusaka, Zambia. President Ruto said African countries must change tact in their approach to trade or lose out to the competition.
Dr Ruto noted that the Comesa bloc must embrace a systemic shift in areas of value addition, especially of agricultural commodities to exploit its untapped potential and enhance productivity.
Boost competitiveness, and create jobs
“The shift will also offer higher returns, incentivise industrialisation, boost our competitiveness and create employment,” he added.
Established in 1994, Comesa is home to 21 member states with a population of over 583 million. The bloc was set up with the goal of promoting economic integration, trade, and development within the Eastern and Southern Africa region.
The member states of Comesa include Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eswatini, Ethiopia, and Kenya. Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Somalia, Tunisia, Uganda, Zambia, Zimbabwe, and Zambia are also members of the zone.
Comesa has implemented several trade facilitation measures, such as the elimination of tariffs and non-tariff barriers on trade among member states. There have also been plans harmonising customs procedures, and the development of regional trade policies and regulations.
The organisation also provides technical assistance and capacity building support to member states to enhance their competitiveness and promote sustainable economic growth
Comesa GDP estimated at $805 billion
The current estimated Gross Domestic Product of the region is $805 billion, and it has a global export/import trade in goods worth $324 billion.
Statistics show that intra-Comesa exports increased from $1.5 billion in 2000 to $12.8 billion in 2021. Despite being a major marketplace for both internal and external trading, intra-Comesa exports accounts for about 8 percent of exports globally. Additionally, Comesa has intra-export potential of over $101.1 billion.
Read also: Oil-rich Angola joins insurer ATI, pays $25 million in fees
“Some of the constraints hindering exploitation of the export potential include weak productive capacities, poor infrastructure connectivity, high transport costs, non/slow implementation of Comesa FTA agreement, non-tariff barriers, and trading in similar products (Comesa, 2021),” the report stated.
During his speech, President Ruto urged Africa to move away from the export of raw materials to instead add value to through industrial processing.
“The potential for intra-Comesa trade is colossal; the demand for value-added products is bound to keep growing well into the future,” he explained.
He asked Comesa member States to take advantage of its domestic market estimated at over 583 million people to enhance trade.
Africa must advance industrial processing
The Head of State noted that Africa must utilise its rich, clean energy to advance its industrial processing capacity.
“We are championing for the radical repositioning of Africa as the clean, green continent of the future in order to exploit the opportunities arising from the transition to green industrialization,” he said.
Present at the Summit were Presidents Abdel Fattah El-Sisi (Egypt), Hakainde Hichilema (Zambia), Lazarus Chakwera (Malawi), Évariste Ndayishimiye (Burundi), Comesa Secretary General Chileshe Kapwepwe, among others.
The Summit also marked the end of President El-Sisi’s chairmanship as he handed over to President Hichilema.
Other than trade, and economic integration, Comesa also focuses on other areas of cooperation. Some of the sectors it champions are agriculture, energy, transport, information and communication technology, and financial services.
Intra-African trade relatively low
The organisation promotes collaboration and coordination among member states to address common challenges and leverage shared opportunities.
The AfCFTA agreement is expected to bring significant economic benefits to participating countries, including increased trade, job creation, and improved living standards. It has the potential to boost intra-African trade, which has historically been relatively low compared to trade with other regions.
The agreement recognizes the importance of SMEs in driving economic growth and job creation. It includes provisions to support and facilitate the participation of SMEs in regional trade, such as capacity building, access to finance, and technical assistance.
