The Independent Uganda: You get the Truth we Pay the Price
The tripartite member states represent 53% of the African Union’s membership, accounting for more than 60% of the continental GDP ($1.88 trillion) and with a combined population of 800 million
ANALYSIS | THE INDEPENDENT | The private sector in the East African Community, under their umbrella body, the East African Business Council (EABC), has celebrated the commencement of the Tripartite Free Trade Area (TFTA) following the ratification by Angola.
Angola became the 14th country to ratify the instrument, the required number for the Agreement to enter into force, during the 37th Tripartite Task Force Meeting on July 20, on the sidelines of the 6th African Union Mid-Year Coordination Meeting in Accra, Ghana.
This development sets the stage for tariff elimination on 100% of goods and services, fostering economic growth, industrialization, and sustainable development. The tripartite member states, based on the available data, represent 53% of the African Union’s membership, accounting for more than 60% of the continental GDP ($1.88 trillion), and with a combined population of 800 million.
Adrian Njau, the acting executive director at EABC, expressed optimism about the new trading arrangement, which is expected to boost trade among the three trading blocs as African countries transition into the African Continental Free Trade Area (AfCFTA), which boasts over 1.3 billion people.
“Our dream is to see businesses start trading under the TFTA preferential tariff,” he said.
Trade volumes among trading blocs
According to the EAC Trade and Investment Report for 2022, EAC exports to Southern African Development Community amounted to US$3.79 billion, while imports totaled US$3.9 billion in 2022. In contrast, EAC exports to the Common Market for Eastern and Southern Africa stood at US$6 billion, with imports at US$4.7 billion. EAC partner states trade more with tripartite member states compared to the rest of Africa due to overlapping memberships in SADC and COMESA, benefiting from preferential tariff treatment. Tanzania and the Democratic Republic of Congo are members of SADC, while Kenya, Uganda, Burundi, and Rwanda are part of COMESA.
Njau commended Burundi, Rwanda, Kenya, and Uganda for ratifying the TFTA agreement and urged other EAC partner states—Somalia, DRC, South Sudan, and Tanzania – to expedite their ratifications to benefit from preferential treatment with countries outside their blocs.
He highlighted that Kenya, for instance, could now export to South Africa under TFTA preferential tariff treatment. “EAC countries should not fear competition from South Africa and Egypt, as other EAC countries already trade with them under COMESA and SADC,” Njau said. “Intra-African trade is currently less than 20%, and the commencement of the TFTA represents a shift from rhetoric to action.”
Statistics show that the tripartite countries import more than 99% of similar products exported by the EAC, indicating a significant market opportunity for the EAC to grow its exports under the TFTA preferential tariff regime for products such as vegetables, meat, bovine, and pasta, among others.
Njau stated that EABC is committed to partnering with development partners to formulate an EAC regional private sector strategy on TFTA. He also emphasized the dedication to collaborating with COMESA and SADC business councils to enhance B2B ties, promote value chains of comparative advantage, and improve complementarity in production patterns.
Njau assured that EABC is always ready to present private sector proposals to Tripartite Ministerial Council Meetings to accelerate TFTA implementation.
Accra meeting
During a meeting attended by heads of the three Regional Economic Communities (RECs), Veronica Nduva, Chairperson of the Tripartite Task Force and Secretary-General of EAC, Chileshe Mpundu Kapwepwe, Secretary-General of COMESA, and Elias Mpedi Magosi, Executive Secretary of SADC, noted that other partner states that have deposited their Instruments of Ratification include Botswana, Egypt, Eswatini, Lesotho, Malawi, Namibia, South Africa, Zambia, and Zimbabwe.
Magosi informed the meeting that on June 20, 2024, the Republic of Djibouti notified the COMESA Secretariat that it had ratified the Agreement.
He recalled that the Tripartite Summit of Heads of State and Government decided on October 22, 2008, to establish a Tripartite Free Trade Area (TFTA) among the COMESA, EAC, and SADC blocs to boost trade among the regional blocs.
“The objective of establishing the COMESA-EAC-SADC FTA was to enhance market access, address the issue of multiple memberships, and further the objectives of cooperation, harmonisation, and coordination of policies among the three Regional Economic Communities (RECs),” he said.
Magosi said SADC is committed to continuing engagement with the tripartite partner states that have yet to ratify the Agreement.
“We urge the partner states to mobilize resources and support the implementation interventions, including setting up the necessary implementation structures,” he said.
Tripartite framework
The Tripartite framework is based on three pillars: Market Integration, which involves trade liberalisation through the creation of a Free Trade Area and arrangements for the movement of business persons; Infrastructure Development, which focuses on enhancing connectivity and reducing business costs; and Industrial Development, which aims to create a supportive environment by improving regulatory and legal frameworks, adding value, diversifying industries, increasing productivity and competitiveness, and implementing programmes for structural change.
EAC Secretary General Veronica Nduva emphasized the need to consolidate the Tripartite FTA through the Agreement’s implementation to harness potential benefits, preserve gains, and strengthen the participation of partner states in the AfCFTA.
“The fact that we have reached the required ratification threshold of 14 ratifications, developed modalities for implementing the Tripartite Agreement, finalised most aspects of the Rules of Origin, continued with engagements on tariff offers, and developed the Tripartite Protocol on Competition Policy demonstrates that the partner states are committed to the process,” she said.
Nduva reaffirmed the EAC’s commitment to continue playing its part towards operationalising the Tripartite Agreement and maximising the opportunities it offers. She further informed the meeting that the EAC was continuously engaging EAC partner states that are yet to ratify the TFTA Agreement.
“The United Republic of Tanzania reported that it was in the process of ratifying the Agreement, while the Republic of South Sudan reported that it had begun the process of signing and ratifying the Agreement,” she added.
Chileshe Kapwepwe, Secretary-General of COMESA, expressed appreciation for the efforts that achieved the required number of ratifications for the Tripartite FTA.
“To support the AfCFTA, we must ensure the tripartite works effectively. I urge the Tripartite RECs to lead the work under their respective pillars to avoid duplication of efforts,” he said.
Kapwepwe added that COMESA Secretariat is leading the Market Integration Pillar as SADC Secretariat leads the Industrialisation Pillar, while the EAC Secretariat is leading the Infrastructure Pillar. He also called for a careful examination of progress and strategising to upscale implementation levels, ensuring that benefits are realized by stakeholders in the tripartite partner states.
He said progress has since been made with the online Non-Tariff Barrier (NTBs) reporting and elimination mechanism being under implementation by 25 tripartite partner states.
