A free trade zone will allow for easier transhipment of cargo across member states. PHOTO | FILE |
What you need to know:
The new deadline, set for September 30, follows the signing of a Tripartite Free Trade Agreement (TFTA) in June.
Kenya and its 18 trading partners from eastern and central Africa have only two months to provide timelines for removing border controls that have curtailed movement of people and slowed the pace of trade in the region.
The new deadline, set for September 30, follows the signing of a Tripartite Free Trade Agreement (TFTA) in June.
The TFTA amalgamates three of Africa’s main trading blocs – the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa) – making it urgent for member countries to relax their visa requirements.
“With the launch of the Comesa-EAC-SADC Tripartite Free Trade Area Agreement and the negotiations on the Continental Free Trade area in June, the discussion on the free movement of people has become even more important than ever before,” Zambia vice president Inonge Wina said in a speech read on her behalf by the minister of Home Affairs, Mr Davis Mwila during a Comesa ministers’ meeting in Lusaka.
The visa protocol is contained in the Comesa Treaty but the majority of member states have not ratified it citing security concerns and difficulties in its interpretation. Additionally, the Protocol on the Free Movement of Persons, Services, Labour and the Right of Establishment and Residence – also referred as Free Movement Protocol (FMP) – faces similar difficulties.
The visa protocol has existed since 1984 and has not yet achieved full implementation in the region while the FMP – adopted in 2001 – has so far only been ratified by Burundi and signed by Rwanda, Kenya and Zimbabwe.
Faced with headwinds caused by the global economic slowdown, many businesses are turning to regional markets such as the Comesa and the EAC to boost performance.
Many countries in the region have entered into a Free Trade Area (FTA) pact under Comesa to grow their trade volumes. Under the FTA pact, a designated group of countries agrees to eliminate tariffs, quotas and preferences on most (if not all) goods traded among them.
In March, Mauritius, Rwanda and Seychelles said they will no longer impose visas on Comesa nationals while Zambia issued a circular waiving visa fees for all nationals from the 19-member bloc on official business.
Mr Gilles Hervio, head of the European Union (EU) delegation in Zambia and special representative to Comesa, urged member of the bloc to relax visa rules to boost trade.
“For economic integration and free trade to happen, citizens must be able to move freely in the region, alongside goods and services. This is a critical pillar of regional integration,” he told the ministers in Lusaka.
He said the free movement of people would curtail illegal immigration and reduce incentive to engage in organised crime.
“More restrictions to travelling do not stop movement of people but simply means more illegal immigration,” Mr Hervio said.
Kenya is targeting to grow its stake in Comesa with a planned free trade zone (FTZ) at Dongo Kundu, Mombasa.
“The intent of the FTZ is to boost intra-Africa trade within the East, Southern and Central Africa region where goods can be imported into the zone and out of Kenya duty-free,” Industrialisation PS Wilson Songa said last year when he called for proposals on the type of businesses investors want to run at the zone.
The FTZ project will be established on a site of between 300-500 acres that is readily available to investors. It will host wholesale and retail trading, breaking bulk goods, re-packaging, logistics and warehousing.
Unlike the current practice at Mombasa port where all goods are subjected to slow customs procedures, an FTZ allows goods on transit to face less strict customs regulations. The FTZ will be reserved for re-exports to the 400 million-people Comesa, allowing for transshipment of cargo without inspection or paying customs duty.
The Comesa bloc is already the single-largest export destination for Kenya’s goods accounting for 35 per cent of Sh517.9 billion worth of goods exported in 2012.
