Sindiso Ndema Ngwenya, Secretary General, Common Market for Eastern and Southern Africa (COMESA): Interview

Interview: Sindiso Ndema Ngwenya

How will the Tripartite Free Trade Area (TFTA) agreement impact intraregional trade in Africa?

SINDISO NDEMA NGWENYA: The TFTA agreement will have a very significant impact on intraregional trade in Africa as the move towards a single market is consolidated. The size of the market itself, 625m people with a combined GDP of more than $1.3trn, will create powerful incentives for increased trade. Also, the pillars on which the agreement is founded – market integration, infrastructure development and industrial development – will also support and reinforce intraregional trade.

In terms of market integration, the TFTA removes major trade barriers between the countries covered by the agreement and, as a result, will facilitate increased trade between them. Data shows that intraregional trade in the TFTA area had already been growing at a phenomenal rate, even before the removal of these barriers. For example, exports from the area grew from $25.5bn in 2009 to $52.5bn in 2013, an increase of 104% for the period and an average increase of 21.2% per year. Market integration will also make it easier for labour to cross borders and will enable Africa’s greatest asset – its youth – to work together more easily, beyond the limitations of borders and political systems, to create economic solutions that will benefit the continent as a whole.

The TFTA also promotes regional connectivity in terms of transport, energy, ICT and physical infrastructure, which will reduce the costs of doing business and trading for all companies operating in the area. Being able take advantage of regional industrial supply chains will mean that costs incurred by companies will come down even further. Increased integration will also lead to greater efficiency in terms of moving products and services across borders.

These changes should result in greater economic diversification across the continent, as more and more companies are able to leverage these increased efficiencies to move up the value chain. Moreover, the adoption of new technologies will drive increases in productivity for many years to come. In addition to these benefits, the agreement includes specific initiatives to spur investment in value-added production.

What can be done to further strengthen Egypt’s ties with COMESA members?

NGWENYA: Egypt is a major beneficiary under the COMESA free trade agreement and will gain even more access to the greater African market as part of the TFTA. In particular, Egypt’s private sector and developmental finance institutions will be able to venture more easily into the rest of sub-Saharan Africa with the aim of investing in the productive activities of these countries. Moreover, as one of the biggest economies in the tripartite area as well as one of the leaders of integration, Egypt stands to gain significantly from the TFTA agreement. The Egyptian private sector, in particular, will be a major beneficiary of the trade regimes being negotiated. As such, it is time for the Egyptian government to bring the private sector into the process so that it can help share the costs of infrastructure development.

What potential is there for an EU-COMESA economic partnership agreement (EPA)?

NGWENYA: The EU is an important partner for all COMESA countries in terms of trade, development and investment. Recently, the Eastern and Southern Africa economic partnership group, which consists of 11 countries, all members of COMESA, began negotiations for an EPA with the EU. The agreement is expected to cover various subjects, including development cooperation, dispute settlement and the liberalisation of trade in goods and services in areas such as agriculture and marine and inland fisheries. An interim EPA was concluded by four countries in 2009, and negotiations for a full EPA are ongoing.