24 - 30 May 2001
Issue No.535
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Al-Ahram Weekly Online 24 - 30 May 2001 Issue No.535 |
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Aligning African ranks
Cairo takes the helm at COMESA with fresh ideas,writes Nevine Khalil
Nine heads of state converged on Cairo to attend the 20-nation Common Market for Eastern and Southern Africa (COMESA) summit which opened on Tuesday. At the opening ceremony, Mauritius handed Egypt the presidency of the group in its sixth session.
In his opening address, President Hosni Mubarak said that during his presidency, Egypt is proposing three initiatives to propel the African economic bloc forward: enlarging the membership of the Free Trade Area (FTA) agreement to include all COMESA members, not just the current nine; thoroughly preparing for the second stage of integration through the establishment of COMESA's Customs Union by the year 2004; and working to promote member states as attractive foreign investment destinations.
"I promise you that Egypt will exert every effort to carry out its responsibilities and dedicate all its energies to achieve more progress in economic integration," Mubarak told his audience attending the two-day summit.
COMESA groups Angola, Burundi, the Comoros, the Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, the Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. Tanzania pulled out of the group last year.
Mubarak noted that "an atmosphere of regional security and stability attracts more investments. Therefore, COMESA plays a pivotal role," in cooperation with the Organisation of African Unity's (OAU) conflict resolution mechanism, "to push forward joint efforts to settle conflicts by peaceful means."
COMESA heads of delegation pose for a commemorative photograph at the end of the opening session on Tuesday
COMESA is currently debating whether to merge with the 14-nation South African Development Community (SADC) which includes a number of COMESA members as well as South Africa and Botswana. SADC's secretary-general was at the summit to discuss the possibility of linking both groups.
Mubarak said that COMESA's economic integration efforts would be futile if they were carried out "in isolation from other African regional economic groupings." He counseled coordinated work with SADC, the Economic Community of West African States (ECOWAS), Economic Central African States (ECAS), the Inter-Governmental Authority on Development (IGAD) and the Arab Maghreb Union (AMU). The president added that cooperation with international economic organisations and other regional groups worldwide "will remain a policy that should be adhered to and properly utilised."
Since its entry into COMESA in 1999, Egypt's exports to member states reached nearly $5 billion in 2001. And the opportunities are boundless in a group which is home to 370 million people and a combined GDP of some $153 billion. Egypt is optimistic about the Free Trade Area (FTA) which was finalised in October 2000, and hopes that a similar effort and commitment will be made to create a customs union among member states by the year 2004. This African bloc also hopes to establish a single currency and central bank by 2025.
On the eve of the summit, African ministers of economy and businessmen concluded an economic forum to discuss prospects for the COMESA FTA and investment opportunities within the group.
Participants took part in three workshops discussing the relationship between the public and private sectors, infrastructure, services and communications, and industry in light of the FTA.
In recognition of the vital role played by the private sector in development, COMESA created the umbrella Business Council in 1998, allowing the private sector in member states to enhance trade and investment opportunities. The council also advises member governments on policies to ease trade and investment restrictions.
Shafiq Gabr, chairman of the COMESA Business Council, told Mona El-Fiqi that much work is yet to be done, despite progress in creating incentives and benefits for the business communities within COMESA. "Most COMESA countries were either inward-looking or tied to countries outside the African continent," Gabr said. "Now, as trade barriers are lifted between COMESA countries, there is a need for greater recognition and removal of any [protectionist] fears" among them.
Gabr said that when Egypt joined COMESA, some African countries were concerned that the size of Egypt's economy would threaten local businesses, "but they have been proven wrong." In the six months since the FTA was signed, trade between Egypt and Kenya has increased significantly in both directions. "It is a win-win situation and not a zero-sum game where one country wins at the expense of the other," Gabr added.
COMESA gave Egypt an opportunity to be viewed as not only a gateway to Middle Eastern and Mediterranean countries but as a window on Africa. In addition, Egyptian businesses can invest and trade with African countries and export to Egypt and other world markets.
However, Gabr listed a number of problems facing investors when doing business in Africa. These include the lack of a business database, red tape, uncoordinated trade procedures, a fragile infrastructure and a disjointed investment legal structure.
Gabr urged determination and commitment. "It is the responsibility of Egyptian businessmen to advance. We should have the courage and leadership to continue to develop COMESA's vision. I think that the [FTA] experience will speak for itself in two or three years." COMESA inaugurated a special trade court earlier this year to arbitrate differences over implementing the FTA.
Globalisation presents numerous opportunities and challenges for COMESA countries individually, but if they unite their resources and economic potential, COMESA can become "an extremely attractive economic bloc for investment" in and out of Africa, said Gabr. "The governments and the private sector must work together to reap the benefits of globalisation and to reduce the challenges," he added.
In his address, Mubarak recognised the work of the council, saying that its role was vital for "integration of businessmen" within COMESA.
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