COMESA

Official website http://www.comesa.int 

Evolution of PTA/COMESA
   

The Common Market for  Eastern and Southern Africa traces its genesis to the mid 1960s. The idea of  regional economic co-operation received considerable impetus from the buoyant  and optimistic mood that characterised the post-independence period in most of  Africa. The mood then was one of pan-African solidarity and collective  self-reliance born of a shared destiny. It was under these circumstances that, in  1965, the United Nations Economic Commission for Africa (ECA) convened a  ministerial meeting of the then newly independent states of Eastern and  Southern Africa to consider proposals for the establishment of a mechanism for  the promotion of sub-regional economic integration. The meeting, which was held  in Lusaka, Zambia, recommended the creation of an Economic Community of Eastern  and Central African states.

An Interim Council of  Ministers, assisted by an Interim Economic Committee of officials, was subsequently  set up to negotiate the treaty and initiate programmes on economic  co-operation, pending the completion of negotiations on the treaty.
  In 1978, at a meeting  of Ministers of Trade, Finance and Planning in Lusaka, the creation of a  sub-regional economic community was recommended, beginning with a sub-regional  preferential trade area which would be gradually upgraded over a ten-year  period to a common market until the community had been established. To this  end, the meeting adopted the "Lusaka Declaration of Intent and Commitment  to the Establishment of a Preferential Trade Area for Eastern and Southern  Africa" (PTA) and created an Inter-governmental Negotiating Team on the  Treaty for the establishment of the PTA. The meeting also agreed on an indicative  time-table for the work of the Intergovernmental Negotiating Team.

After the preparatory  work had been completed a meeting of Heads of State and Government was convened  in Lusaka on 21st December 1981 at which the Treaty establishing the PTA was  signed. The Treaty came into force on 30th September 1982 after it had been  ratified by more than seven signatory states as provided for in Article 50 of  the Treaty.

The PTA was  established to take advantage of a larger market size, to share the region's  common heritage and destiny and to allow greater social and economic  co-operation, with the ultimate objective being to create an economic  community. The PTA Treaty envisaged its transformation into a Common Market  and, in conformity with this, the Treaty establishing the Common Market for  Eastern and Southern Africa, COMESA, was signed on 5th November 1993 in  Kampala, Uganda and was ratified a year later in Lilongwe, Malawi on 8th  December 1994.

It is important to  underline the fact that the establishment of PTA, and its transformation into  COMESA, was in conformity with the objectives of the Lagos Plan of Action (LPA)  and the Final Act of Lagos (FAL) of the Organisation of African Unity  (Organisation of African unity). Both the LPA and the FAL envisaged an evolutionary  process in the economic integration of the continent in which regional economic  communities would constitute building blocks upon which the creation of an  African Economic Community (AEC) would ultimately be erected.
   

Changes in the Regional Economy
 Up until the late  1980s and early 1990s most COMESA countries followed an economic system which  involved the state in nearly all aspects of production, distribution and  marketing, leaving the private sector to play a minor economic role. This  system promoted import substitution and subsidised consumption. 

The inefficiencies  inherent in this system contributed significantly to the economic decline of  the PTA/COMESA region. For example, by the mid 1990s:

     
  • Gross domestic investment had fallen consistently for 20 years to a level below a minimum investment ratio of the required 20% of GDP needed to cover depreciation and repair costs; foreign direct investment (FDI) in Africa was negligible, at approximately 1 per cent of GDP, representing 0.8 per cent of all FDI and 2.1 per cent of FDI going into all developing       countries. 
  • The share of exports from sub-Saharan Africa in world exports declined from 2.5% in 1970 to 1% in 1990, while its share in developing country exports declined from 13.2% to 4.9% in the same period. 
  • External debt of the COMESA region had, by the early 1990s, increased twenty-fold since 1970. Debt service ratios, which in 1970 were insignificant, averaged 45 per cent of export earnings in 1989-90, making the region one of the most heavily indebted in the world. The aggregate external debt owed by sub-Saharan Africa, including South Africa, was US$318 billion in  1994, compared to external financing to all African countries of about US$15 billion in 1996. 
  • Although industrial output grew in the 1960s and 1970s, this was followed by a  sharp decline as a result of entrenched structural rigidities, weak inter-industry and inter-sectoral linkages, lack of access to advanced technologies and poor institutional and physical infrastructure. The African continent's share of world manufacturing value added (MVA) rose       from 0.7 per cent in 1970 to 1 per cent in 1982 and fell to 0.8 per cent in 1994.

Thus from 1960 up  until the mid-1990s, the economic growth of the COMESA region averaged 3.2 per  cent a year, a figure marginally above the level of the region's population  growth. By 1993, this region of about 280 million people then (excluding  Egypt), which had more than doubled its population since independence, had a  total GDP of around US$90 billion, and included fifteen of the twenty-three  States classified as Least Developed Countries (LDC's) by the United Nations.