Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN)

Monitoring economic integration in Southern African Development Community (SADC), 2006/2007
Overlapping Memberships of Regional Economic Arrangements and EPA Confi gurations in Southern Africa
Rehabeam Shilimela

Executive summary

Monitoring SADC is a project that seeks to monitor and evaluate progress in institutional and programme implementation in the Southern African Development Community (SADC) region. The project forms part of the Formative Process Research on Integration in Southern Africa (FOPRISA) in which the SADC secretariat, CMI and various regional Policy Analysis Institutes and Universities collaborate. The Monitoring SADC team visits member states of SADC (selecting a few countries for each year) in order to collect views and facts on the progress of regional integration in SADC. Stakeholders consulted include government offi cials responsible for SADC matters in their respective countries, representatives of the private business sector, representatives of civil society, relevant university departments, and international and regional development partners.

The 20062007 version of Monitoring SADC has focused primarily on overlapping memberships within southern Africa, both in the context of regional integration blocks and within the framework of Economic Partnership Agreements (EPAs) that are being negotiated between the European Union and various groups of countries in the region. The aim is to outline the implications of these overlaps and to propose solutions to address the problem. Regular issues covered by the Monitoring SADC report include: the assessment of development; the effectiveness of SADC National Committees (SNCs) that are tasked with coordinating SADC programmes at member state level; the readiness of SADC member states to form a SADC Free Trade Area that is planned for 2008, in the light of attaining the agreed upon macroeconomic convergence targets (for instance on inflation, budget deficit and public debt); and on progress in the implementation of the SADC protocol on trade.

This exercise was accomplished through data collection and through discussions with stakeholders in Botswana, Zambia and Malawi. The findings confirmed various issues that were already identified during the mid-term review of SADC, amongst these being the underdevelopment or non-existence of SNCs and the complexity of the new SADC rules of origin. Financing of SNC activities and lack of a common framework for SNC operations continue to hamper development and effectiveness of these important SADC institutions.

SADC member states continue to improve on their key macroeconomic variables such as inflation, budget deficit and GDP growth, although a small number of member states are moving backwards. The main area of concern is the declining importance of manufacturing in the generation of GDP. Manufacturing to GDP ratios are also low for a number of SADC countries to the extent that SADC exports are likely to remain dominated by raw materials, a situation that does not promote intra-SADC trade.

The assessment of readiness of SADC member states to form a SADC free trade area (FTA) revealed different degrees of progress. Some member states are very ready, i.e. the Southern Africa Customs Union (SACU) countries, Mauritius and Mozambique. Malawi, Tanzania and Zambia are partially ready, while Zimbabwe, Angola, DRC and Madagascar are not ready. The main basis for this evaluation is the state of implementation of the SADC protocol on trade. In the consideration of the progress by other trade blocks that either compete or complement SADC, the author urges SADC to go ahead with its plans for establishing an FTA during 2008 and develop a framework that would allow non-qualified members to catch up later and be integrated into the FTA once they satisfy the qualifying criteria.

SADC has on various occasions tried to forge a partnership with the private sector at the regional level. The challenge has always been to find a private sector forum that is active and representative of the key industries that are found in SADC member states. One of the sectors consists of small and medium enterprise (SME) companies, which form the main focus of industrial strategies in SADC member states. The inclusion of SMEs in SADC platforms at the regional level has proved to be a mammoth task because of a number of factors, the main one being the lack of financial resources from the side of SMEs to fund their participation at regional deliberations on a sustainable basis. It is here proposed that the development of a SNC framework that allow for the effective participation of SMEs (not just aggregate chambers of commerce) would enable participation of representative private business in SADC affairs.

The Monitoring SADC exercise has further considered the way forward for SADC in view of the formation of the planned SADC customs union and in the light of the continental economic integration agenda of the African Union. For the SADC customs union, it is proposed that SADC should consider expanding SACU. SACU states have moved ahead in many respects and their existing frameworks that have been tested and applied can be adopted to SADC. In the light of the envisaged African Economic Community, and in the face of the overlapping memberships of Regional Trade Arrangements (RTAs) in southern Africa, it is recommended that SADC should consider the option of harmonising trade relationships with other RTAs in southern Africa, especially with COMESA.

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