Tripartite model best for Africa - Report

The developmental approach taken by the Tripartite (Common Market for Eastern Africa - East African Community and the Southern Africa Development Community) might be the best practice for the whole world in pursuing regional economic integration.

ACCORDING to a report done by Comesa director of Trade and Customs Francis Mangeni released yesterday, the tripartite approach bases regional economic integration on at least three critical pillars - building of large regional markets to support critical levels of investment, cross-border economic infrastructure including rural infrastructure, and industrialisation, with a focus on small to medium scale enterprises for social economic transformation.

Africa’s Tripartite Free Trade Area was launched on June 10, 2015, in Sharm El Shiekh, Egypt setting the stage for the establishment of a single market for 26 African countries in the Eastern and Southern African Region.

Majority of countries in Comesa, EAC and Sadc have since signed the Tripartite FTA.

“It is estimated that implementation of the Continental FTA together with trade facilitation measures will double intra-Africa trade by 2022 to about 25 percent of total trade, which is still diminutive.

“The upshot of the academic, political and economic turmoil surrounding globalisation for over 20 years is that creation of decent jobs, economy-wide rather than for a privileged few, remains a core priority for Governments and Regional economic integration bodies, going to their very legitimacy,” said Mr Mangeni.

“There has been a perceived dichotomy between trade and industrialisation between manufacturing, goods and services with policy implication focusing on manufacturing, away from trade or markets and away from services.”

Mr Mangeni said the approach has been wrong to the extent that without markets, investment and production would not be forthcoming in the first place.

He said appropriate trade policies and instruments support industrialisation and services in Africa will be part of the solution through facilitative policies in key areas such as movement of skills, and creation of regional markets for financial, energy and transport services that support competitiveness.

In addition, Mr Mangeni said it can no longer be argued that resources should move from the agricultural sector to the industrial sector and then to services, as the pre-ordained development trajectory.

Comesa has established a specialised agency called the Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA), which supports small scale farmers with inputs and extension services.

Such interventions will be a basis for agrobased industrialisation, where agriculture is not equated to just farming but construed broadly to encompass the regional and global value chains from seeds to final products on shelves in retail outlets.

Rather, all these elements (trade, innovation, infrastructure, manufacturing) are part and parcel of the same holistic interventions for industrialisation of Africa.

Mr Mangeni said the emphasis on value addition and diversification has mostly been implemented upside down without the desired industrialization results.

Interventions have sought to achieve value addition and diversification usually through investment incentives into mainly the natural resources or extractive sector.

“Yet what should be done first or at least simultaneously is building technological and innovation capabilities at National and Regional levels through dedicated interventions. It is when such capabilities exist in critical amounts that value addition and diversification will happen,” said Mr Mangeni.

He said industrialization requires well known interventions, according to rich discourses on economic development over the years.

Mr Mangeni said formulating, sequencing and implementing the interventions needs careful thinking.

“For instance should technology and innovation as well as a national or regional intervention for harnessing knowledge and skills from around the world be a standalone intervention in the plethora of interventions usually written into national and regional industrialisation policies and strategies?”