At least 26-Nation Tripartite Free Trade Area Set to Replace
3 East African Trading Blocs, Promising a New Era of Trade. Photo: The Habari
Network
By Adonis Byemelwa
Dar es Salaam—The
business community in Tanzania is expressing mixed feelings as the
COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement officially comes
into force on Thursday, July 25, 2024. The East African Community (EAC)
headquarters in Arusha confirmed on Tuesday that the agreement, which aims to
create one of the largest free trade areas in Africa, has met the required
threshold for implementation.
The agreement's activation
follows the Republic of Angola's submission of its Instrument of Ratification
on June 25, 2024, marking the 14th member state to do so—a crucial number
needed for the agreement to take effect.
The announcement was made during the 37th
Tripartite Task Force Meeting, held on July 20, alongside the 6th African Union
Mid-Year Coordination Meeting in Accra, Ghana. The meeting was attended by key
leaders, including Mr. Elias Mpedi Magosi, Executive Secretary of the Southern
African Development Community (SADC) and Chairperson of the Tripartite Task
Force, and Mr. Chileshe Mpundu Kapwepwe, Secretary General of the Common Market
for Eastern and Southern Africa (COMESA).
To date, the 14 countries that
have ratified the agreement, including Angola, Botswana, Burundi, Egypt,
Eswatini, Kenya, Lesotho, Malawi, Namibia, Rwanda, South Africa, Uganda,
Zambia, and Zimbabwe, collectively represent 75 percent of the Tripartite GDP
as of 2022.
Despite these developments,
Tanzania has not yet ratified the TFTA. Analysts and business community members
in the country express a mix of optimism and caution. Prof. Damian Gabagambi,
former Executive Director of the National Development Corporation (NDC),
highlighted the benefits of regional blocs in expanding market access but
cautioned that without equitable trade policies, smaller economies might be
overshadowed by larger ones.
"Tanzania may be taking a cautious
approach, assessing the conditions before opening all doors at once," he
noted, emphasizing the need for a step-by-step integration process.
Mr. Akida Mnyenyelwa, Director
of Policy and Advocacy at the Confederation of Tanzania Industries (CTI),
stressed the necessity for Tanzania to bolster its infrastructure—particularly
roads, railways, and electricity—to fully capitalize on the TFTA's
opportunities. "Without adequate infrastructure, local industries may
struggle to compete in these expanded markets," he warned.
In a broader context, the TFTA
aims to enhance market access, streamline trade regulations, and harmonize
policies among the 29 member states, which encompass 53 percent of the African
Union's membership and over 60 percent of the continent's GDP. The framework
focuses on three pillars: Market Integration, Infrastructure Development, and
Industrial Development.
However, EAC Secretary-General
Veronica Nduva highlighted that despite these integration milestones, intra-EAC
trade remains low, constituting only 15 percent of the region's total trade in
2022.
She pointed to the persistent
issue of non-tariff barriers (NTBs) imposed by partner states as a significant
impediment. "Efforts are being made to resolve existing NTBs and
discourage the imposition of new ones in line with the EAC Customs Union
Protocol," Nduva stated, emphasizing the commitment to increasing
intra-EAC trade.
According to recent data, EAC
imports from the United Arab Emirates surged by 81.9 percent to $8.01 billion
in 2022, while imports from India grew by 20.9 percent to $5.85 billion.
Imports from China and the United States also saw significant increases.
Despite the region's growing trade with global
partners, intra-EAC trade saw a modest increase of 11.2 percent to $10.91
billion in 2022, indicating the need for further integration efforts.
The EAC is also expanding its
membership, with Somalia being admitted as the newest member last December.
This expansion brings both opportunities and challenges, as new members
integrate into the community's economic and regulatory framework.
The implementation of the
COMESA-EAC-SADC TFTA marks a significant step towards deeper economic
integration in Africa. However, the journey ahead will require concerted
efforts to address the challenges and leverage the opportunities presented by
this ambitious agreement. As Tanzania contemplates its position, the outcomes
of this trade bloc will likely influence its decision-making process shortly.