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Africa trading bloc sees customs union in five years

16th May 2005

By: Nicola Mawson

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Africa's major trade bloc Comesa aims to establish a customs union within the next five years to deepen economic integration and boost investment in one of the world's poorest regions, a top official said at the weekend.

The 19-member Common Market for Eastern and Southern Africa (Comesa) says it had wanted to achieve the customs union much earlier but haggling over common external tariffs has slowed progress.

"I would be happy if we achieved (the customs union) yesterday," Erastus Mwencha, the secretary general of Comesa told reporters in Nairobi, where he is attending trade talks between the European Union and various African countries.

"I believe we are going to achieve a full customs union between now and the next five years," he said. "We already have a number of countries that we can start it today with ... but that is not the issue. We want to bring as many members as possible."

Progress in creating the union has been hindered by a reluctance among countries to cut customs tariffs which contribute between 30% to 40% of their national revenues.

But Mwencha said the Zambia-based Comesa was planning to establish an "adjustment facility" that will help struggling member countries cope, although he did not elaborate.

According to a Comesa treaty, the member countries should have agreed on a common external tariff by December last year.

The bloc, which has a combined GDP of $170 billion and a population of 380 million, has so far agreed a tariff structure for raw materials and capital goods of between 0% to 5%.

Intense negotiations are taking place for intermediate and finished goods, with proposals on the table for a ten percent to 25% band for intermediate goods and 25% to 40% for finished goods, Mwencha said.

He said he expected progress on the matter when Comesa holds a summit in Rwanda early next month.

"The realisation of the customs union will deepen, expand and strengthen economic integration among member states and will be another significant milestone to the attainment of an economic community," he said.

Comesa's inter-regional trade grew to $5,4-billion last year compared with less than $1-billion in 2000, when a free trade area (FTA) came into force. So far 11 countries have joined the FTA.

Mwencha said the volume of trade in the region had been hampered by poor transport networks and supply constraints such as a lack of credit for producers.

He said Comesa was keen to start adding value to products such as coffee, cotton and maize and supports the establishment of a common regional coffee exchange in Kenya.

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