COMESA leaders discuss report Secretary General
The COMESA Free Trade Area (FTA) is nothing to be feared as economic liberalization for Africa brings with it more opportunities than costs.
This came in a report submitted by COMESA Secretary-General to the sixth COMESA summit, opened in Cairo Tuesday.
Many of the problems attributed to the FTA are, in fact, inconsistencies in domestic fiscal politicies or in management at the firm level, according to the reform.
However, in most cases the problem to be addressed was not the low cost of imports but the big costs of domestic production caused by such factors as high electricity and water costs and top heavy management structures inherited from the days of the command economy and the parastatal company, the report expounded.
Moreover, many firms, in fact, have taken advantage of the opportunities offered by the FTA, COMESA Secretary-General stated.
The report recommended that the COMESA General-Secretariat should deal, in terms of the implementation of the FTA, with issues of rules of origin, issuance of certificates of origin, unfair trading practices and accusations of dumping.
The challenge facing COMESA is three-fold: to attract more countries to the COMESA FTA, to make the FTA function more effectively so that traders and governments see it as a viable, and to move countries from the FTA to a Custom Union, according to the report.
In his report, the COMESA Secretary-General urged the grouping member states to participate in establishing a special fund for cooperation, compensation and development for tackling the special problems of under-developed area and other disadvantages arising from the integration process.
It also urged for allocating more investments in the fields of information, communications and technology, warning of the widening gap between the developed and developing countries in this field.
If a stable telecommunications infrastructure and liberalized policy environment were in place, one could envision companies in Egypt, Mauritius and South Africa, countries which have skilled manpower and advanced infrastructure, setting up offices in other countries in the region to handle back-office functions.
COMESA developed a proposal for the development of a regional competition law and policy that would focus on exploring the scope of developing common approaches to address anti-competitive practices, according to the report.
"COMESA member states have made good progress on creating an enabling environment for investment in member states including comprehensive investment legislation, exchange control liberalization, adoption of export promotion measures, liberalization of banking and insurance sectors and opening them up to competition," the report said.