The expense of transport in COMESA is hindering Free Trade Area
Due to prohibitive costs in the Common Market for Eastern and Southern Africa (COMESA) region in regards to transportation, the area is struggling to implement the Free Trade Area (FTA).
FTA relates to a selection of countries in which tariffs and non-tariff trade barriers between members are seemingly scrapped without a common trade policy toward non-members.
To manage the issue, the COMESA Council of Ministers met in Lusaka, Zambia, and approved a proposal to introduce a shipping line that would benefit both inland and coastal countries.
Mwangia Gakunga, Head of Coporate Communication Affairs, reported that the shipping line would be established through regional institutions and member states.
“In approving this intervention, the ministers noted that addressing the high transportation costs would resolve the challenges affecting the performance of the FTA,” stated Mr Gakunga.
According to an assessment report conducted by COMESA, the average bilateral intra-COMESA trade cost is at 310% of trade value.
“For COMESA member states to realise the highest levels of innovation-based growth in exports and produce high-value added products for long-term growth,” the assessment report read.
“There is need to redesign policies geared towards facilitating adoption of existing technology, intellectual property rights and vocational education that would bolster innovation capacity.”