Economy

Comesa cues African states against protectionism as free trade set to take effect

Monday June 25 2018

Dock workers assist in off-loading duty free sugar at the Port of Mombasa from the Comesa region. FILE PHOTO | NMG

A regional body has urged African states to seek alternative ways of protecting some sectors of their economy as a continental free trade area takes effect.

The African Continental Free Trade Area (AFCTA) is expected to come into effect at the end of the year.

Comesa Competition Commission (CCC) chief executive officer George Lipimile says countries that enjoy some protectionism measures will have to get better alternatives in order not to undermine the effectiveness of AFCTA.

Kenya is one of the countries that has been enjoying Comesa safeguards on sugar for over 10 years even after exhausting the allowable limits.

The current quota, which limits the amount of sugar that regional countries export to Kenya to 350,000 tonnes, comes to an end in February next year.

ACFTA, which if effective, will allow free movement of goods from one country to another, was signed by 44 African states in Kigali this year.
“Countries should not hide on protectionism to hinder free movement of goods under the ACFTA and as a result of this we need to look for alternative ways of issuing the safeguards,” said Dr Lipimile.

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Dr Lipimile noted that some of the alternatives include looking at case by case for specific countries and if at all it is justifiable for those countries to be given safeguards and to what extent.

Sugar safeguards

Speaking during a two-day media workshop organised by CCC in Nairobi on Monday, Dr Lipimile noted that Kenya’s argument for the extension of sugar safeguards in 2016 was justified.

“I looked at the issues that were raised and the argument that was given by Kenya was justifiable,” he said.

Comesa Competition Commission (CCC) is an affiliate of the regional business bloc that oversees all mergers and acquisitions as well as checks on anticompetitive practices within the 19 Comesa member states in Africa.

It has been operational since 2013.

CCC has of late handled a number of mergers between multinational firms that have presence in Kenya.

Last year, CCC cleared the acquisition of Monsanto Company by Bayer.

CCC received notification in relation to acquisition of Monsanto Company by Bayer at an estimated cost of Sh6.2 trillion cash deal that includes the takeover of the latter’s Kenyan subsidiary.