Business
Will free trade in Africa fuel growth or introduce regional imbalances?
The African free trade zone is to be launched in three (3) years.
African leaders have agreed to launch negotiations on creating a free trade zone that would integrate three overlapping trade pacts: the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC).
The bloc would combine 26 countries with a combined economy estimated at US$875 billion, aiming to enhance Africa’s connectivity and reduce costs of doing business while increasing investment flows to address capacity constraints.
This might be fine with South Africa, which already has a headache from its membership of the Southern African Customs Union (SACU). Through the SACU South Africa pays revenue to the union’s four other members. It is money that disappears in the budgets of these countries, instead on being spent on infrastructural development that would enable South Africa to widen its markets.
South Africa is shifting its efforts from deeper economic integration to liberalizing markets. Technically speaking it probably could do without entities like SACU
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What some commentators describe as a new South African imperialism, others deem a more realistic alternative to the haughty ideals of economic unity so far pursued.
South Africa has not allowed itself to be held back by trade barriers. When you are in Dar es Salaam (Tanzania), you can eat in the same Spur restaurant as you would in Johannesburg. You can phone with MTN and take your money out of a Standard Bank ATM. South African companies have taken the risks and it has paid off.
