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Al-Ahram Weekly 24 Feb. - 1 March 2000 Issue No. 470 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 24 Feb. - 1 March 2000 Issue No. 470
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Focus Heritage Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Showcasing COMESA
COMESA 2000 aims at increasing international awareness of Africa, and identifying its many investment opportunities, writes Dina EzzatEgypt is making a strong economic start this year by hosting the COMESA (Common Market for Eastern and Southern Africa) conference due in Cairo on 28 and 29 February.
"COMESA 2000 -- The emerging African market" will be attended by some 1,000 African and non-African participants, including 800 African and non-African businessmen and ministers of foreign affairs and COMESA co-ordinating ministers in member countries, heads of regional and international organisations, senior executives of international financial institutions, and heads of multinational and COMESA corporations.
"This is a [major] business event. It will be inaugurated by President Mubarak. It is about making business in and with Africa," said Foreign Minister Amr Moussa.
The conference is sponsored by the Egyptian Ministry of Foreign Affairs. It is organised by Egypt's International Economic Forum and Euromoney Institutional Investors.
COMESA 2000 aims at increasing international awareness of this African economic grouping and identifying investment opportunities in its region.
"There is so much potential in Africa that could best be exploited with the aid of some foreign investment and expertise. This conference should allow for the match-making of African and non-African businessmen who could work jointly on these business opportunities," said Reda Beibars a senior diplomat on the African desk in Egypt's Foreign Ministry.
Promoting the possibilities of significantly increasing the very limited intra-COMESA trade is also on the list of objectives of COMESA 2000.
"On 31 of next October a COMESA free trade area will be established. So, it is very opportune for Egypt, a leading economy in the continent, to host this summit to allow for a serious business interaction that would help make this free trade area a real economic asset," commented Hisham Badr, an economy adviser to the foreign minister.
Egypt has been having its eye on the African market for a few years. It is believed that the African markets could easily accommodate Egyptian commodities: It is a big market that looks for reasonably priced commodities. Meanwhile, transportation facilities are easier to provide for Africa than for remoter markets of the Third world countries.
Over the past three years Foreign Minister Moussa has been on several tours to a good number of African states. Accompanying Moussa were a number of businessmen who were looking for, and actually did find, good deals. At least one similar tour is expected this year.
"Increasing our exports is a key objective. It is something that the government is dedicated to and that the foreign ministry is increasingly working on," Badr said.
And, according to Moussa, "In view of the increasing trend of economic globalisation it is very important to encourage Egypt's integration in such an economic grouping." He added, "The foreign ministry is considering hosting a similar conference for Arab businessmen" in order to boost the cause of the Arab Common Market.
But the short term objective of this COMESA conference is to encourage the possibilities of significantly increasing the very limited intra-COMESA trade. According to mid-1990s statistics released by the COMESA secretariat, Angola's annual exports, for example, stood at US$2.8 million. Of this nothing was sold to the other COMESA countries. Also, the same figures show that Angola's total annual imports were estimated at US$4 million. Only less than US$1 million of these were bought from other COMESA states.
It is expected that once the zero tariff arrangement goes into effect it will take the intra-COMESA imports and exports from the current eight per cent to 20 per cent of the total annual trade volume. It is expected that the Cairo COMESA Conference will help in making this increase.
The plenary sessions of the conference will address such issues as trade liberalisation and its impact on the COMESA countries, and opportunities and prospects for direct foreign investment in COMESA countries.
Also to be addressed in the panels of the conference are the capital markets in COMESA, the potential for small and medium size enterprise in this part of the world, banking and financial services, and the need to expand on Information Technology.
A number of workshops will also be arranged as part of the activities of the two-day conference. These workshops will handle specific topics. Each will focus on a range of issues that include construction, power and energy, ports, telecommunications, transportation, agriculture and agri-business, oil, gas and minerals. These workshops cater to the businessmen seeking venues and partners with whom they can work with on specific projects.
This COMESA conference will conclude its work on the eve of the opening of the Cairo International Trade Fair that will open on 1 March. This fair is the largest in Africa. It will be hosting a COMESA pavilion where exhibition space will be given free of charge to each member state.
There can be no cutting corners when it comes to discussing trade promotion in Africa at COMESA 2000, reports Gamal NkrumahThe International Monetary Fund's report, World Economic Outlook, has predicted that African GDP would expand by 5.1 per cent in 2000, after 3.2 per cent growth in 1998 and 3.4 per cent last year. Growth, then, is gaining momentum in Africa, and the possibility of seeing the figures move into double digits is no longer such a far-off dream. It is in this context that next week's Cairo Conference of the Community of Eastern and Southern African (COMESA) countries comes at a very opportune moment.
"Indeed, the theme for the Cairo Conference is COMESA 2000: the emerging market," COMESA Secretary-General Erasmus Mwencha told Al-Ahram Weekly. "This shows that we believe COMESA to be a viable market that will be enhanced with the removal of the major barriers to the movement of goods." With 380 million people and an estimated GDP in 1998 of $165 billion, COMESA is not a small market, Mwencha said. "In Cairo we shall be selling COMESA to investors and we hope to win many of them, judging from the confirmation of attendance. Integration is bound to bring more Foreign Direct Investment (FDI) and, therefore, more growth and, consequently, a larger market. COMESA is in Africa, and what goes for COMESA is valid for the rest of Africa," he added.
The COMESA countries are richly endowed with natural resources, yet because of the generally poor level of economic development many of the resources remain untapped. Take fish, for example. Currently, over half of COMESA's regional fish potential is unexploited. Fish, rich in proteins, could be an important source of food in the region which periodically faces serious food shortages. Moreover, fish exports could bring in precious foreign exchange. The region earns $200 million per annum in fish exports, but the potential for exporting far more fish is an issue to be discussed at COMESA 2000. The COMESA Secretariat and Food and Agriculture Organisation (FAO) signed a $3,444,000 project in March 1999 to facilitate better fish export growth and promotion. Of the estimated 6.8 metric tonnes potential in COMESA, only 2.8 million tonnes are currently exploited.
Nevertheless, there are several technical problems to be resolved before the full potential of the region as a major exporter of fish and fish products can be realised. Chief among these challenges is the standardisation and harmonisation of the sanitary and phytosanitary standards according to guidelines and recommendations of the World Trade Organisation.
COMESA's hydro-electric potential is around 700 billion KW, 96 per cent of it unexploited. Some 95 per cent of all COMESA water reserves are economically unexploited. COMESA also has the world's largest fresh water reservoir, Lake Victoria. A mere 90 per cent of potentially arable land in COMESA countries is exploited. COMESA mineral wealth includes an estimated 300 billion metric tonnes of phosphates, 105 billion tonnes of iron ore and 2,000 billion tonnes of petroleum. COMESA also has large reserves of cobalt, uranium, nickel and copper. While most COMESA countries have enjoyed traditionally intimate cultural and economic ties with Europe, especially the former colonial powers Britain and France, they have recently cultivated closer relations with the United States. COMESA chairman, Kenyan President Daniel Arap Moi, currently touring the US, attended the first National Summit on African Affairs in Washington to lobby support for Africa. The US Agency for International Development (USAID) is currently working from its regional offices in Nairobi and Gaberone with COMESA in activities totalling $7 million. The focus is on projects dealing with democratisation and conflict management.
"COMESA 2000 is essentially about confidence building," Kenya's Ambassador to Egypt Mahmoud Maalim told Al-Ahram Weekly. Egypt's trade with COMESA hit $106.5 million in the first two quarters of 1999 compared to $78.2 million in the same period of 1998. Egyptian exports doubled since its entry into COMESA, rising from $13.2 million in 1998 to $27.3 million in the first two quarters of 1999 -- up by 107 per cent.
"Egypt's Minister of Economy Youssef Boutros Ghali alluded to the utilisation of Kenya as a launching pad for the entire region at the last COMESA gathering in Nairobi 1999," said Maalim. "Egypt, for example, can import Kenyan soda ash, a critical component in the production of soap, detergents and glass. Many Egyptian products are readily available in Kenyan markets. In Egypt, you have seasonal fruits. We in Kenya grow fruits throughout the year. We also have exotic fruits that are not available in Egypt, like pineapple and passion fruit, that can be imported from Kenya," he said. The Kenya Export Promotion Council will be participating at the Cairo International Trade Fair on 1 March, a day after the COMESA conference ends, and Maalim said that Kenyan products would be on display.
COMESA overlaps several other regional groups -- the Southern African Development Community (SADC), the East African Community (EAC), the Intergovernmental Agency for Development (IGAD) and the Indian Ocean Community (IOC). Egyptian membership of COMESA has opened doors and facilitated access to these regional groups. Egyptian companies are making important inroads into Africa. The Egypt-East Africa conglomeration of 20 Egyptian companies recently acquired a warehouse in Nairobi. Ibrahim Kamel's South-South Corporation is also a pioneer in the field.
There are some misgivings about certain disparaging comments in the Egyptian press about doing business in Africa. "Some Egyptian businessmen do not use the proper COMESA documentation when doing business in Kenya and other African countries," Maalim said. However, he added that COMESA 2000 is a golden opportunity for tackling head-on such issues. "Wheat imported from Egypt occasionally shows up in Kenyan ports. Egypt is a net importer of wheat and, therefore, the wheat imported from Egypt could only have originated from a third country in contradiction to COMESA rules," Maalim said. "These are some of the issues that we need to iron out."
The most successful of COMESA's industries has been in agribusiness, including horticulture and food processing sectors. African exporters see COMESA 2000 as an opportunity to market their products. "Previously we focused on Europe and to a lesser extent Asia. Now we want to explore the Middle East and North Africa and Egypt is the perfect springboard to the region," Ambai Karwi, of the Zimbabwe Investment Centre, told Al-Ahram Weekly. Centrally located in the heart of the region, Zimbabwe is resource-rich and has a good infrastructure. "I am positive about my promotional work in Egypt and believe we can work together in many sectors such as tourism, agro-processing and financial services," Karwi said. "I met Egyptian officials and businessmen at the G15 meeting in Jamaica last year, my first encounter with Egyptian businessmen. Zimbabwe, like Egypt, is a member of the G15. COMESA 2000 is an excellent opportunity to cement these new ties," she said.
Another area of possible cooperation is tourism. The tourism industry features prominently at COMESA 2000. "Both Egypt and Kenya have a relatively developed tourism industry and could benefit from exchanging experiences and ideas in this rapidly changing and lucrative industry," said Margaret Chemegich, permanent secretary at Kenya's Ministry of Trade, Tourism and Industry, who visited Cairo last month. "Visitors, especially those flying from distant destinations such as North America and East Asia, can divide their time between game parks and tropical beaches in Kenya with the historical sites in Egypt," she said.
Another participant at COMESA 2000 is Uhuru Kenyatta, chairman of Kenya's Tourist Board, who is looking forward to closer collaboration between Kenya and Egypt in the tourism sector. Kenyatta, who is scheduled to meet his Egyptian counterparts and initiate new plans between Egypt and Kenya in the tourism sector, heads a large delegation of Kenyans, including delegates from the Kenya Tourist Federation.
"Tourism is a key area for cooperation between Egypt and Kenya and other COMESA countries," said Kenya's Minister for Trade, Tourism and Industry Nicholas Biwot. "But there are also other sectors such as mining, manufacturing, trade, commerce and financial services. There is also a huge potential to leapfrog into the cutting edge of information technology and communications," said Biwot, who is also chairman of COMESA's Council of Ministers.
