Africa Economy: Tripartite free trade area to enhance intra-Africa trade: expert

Kenyan industrialists' umbrella body has welcomed the signing of the Tripartite Free Trade Area (TFTA) agreement, saying it will increase intra-African trade by easing trade restrictions, allowing easier movement of goods and persons in the region.

Kenya Association of Manufacturers (KAM) CEO Designate, Phyllis Wakiaga, said in a statement on Monday that the deal will enhance trade facilitation, which will substantially reduce the cost of doing business, create momentum for regional infrastructure projects and enhance cooperation in customs and combating of unfair trade practices.

"KAM expects that the TFTA will not only create an expanded market for Kenya manufactured products and services, increase the inflow of investment into the country and potential for Kenya's investment in the region, but also enhance Kenya's exports into the region through harmonization of policies, including the rules of origin, health and safety standards," she said

The TFTA agreement signed last week during the 3rd Meeting of the Tripartite Summit of Heads of State and Government held in Egypt.

The TFTA pact consists of Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern Africa Development Community (SADC), bringing into reality the vision and inspiration of the Abuja Treaty to have one African market.

It has created the largest trading bloc of 26 Member States in Africa, with a combined population of about 625 million people and a gross domestic product of over 1.2 trillion U.S. dollars.

This constitutes over half of Africa's population as well as economic activity. It is expected that the TFTA will enhance intra- regional trade,which at the moment stands at about 12 percent, and resolve the challenges of multiple memberships.

"In order for the TFTA to contribute to the economic development of Africa, there is need to invest in infrastructure specifically energy and transport, enhance education skills, as well as promote research and innovation in Africa," Wakiaga said.

She called on the urgent need to finalize certain critical elements that remain unnegotiated, such as the rules of origin, trade remedies and tariff offers, which are important trade facilitation instruments required to operationalize the TFTA.

States that signed the Tripartite Agreement will therefore initiate the legislative process of ratification while those that do not sign will be given a specific timeframe to do so. The agreement will come into force once ratification is attained by two thirds of the 26 tates.

The launching of the TFTA is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialization and free movement of business persons.

In order for the TFTA to realize inclusive and equitable growth, officials agree on the need for expeditious formulation and implementation of a regional industrial program.

The business community, in particular, will benefit from an improved and harmonized trade regime which reduces the cost of doing business as a result of elimination of overlapping trade regimes due to multiple memberships.

The TFTA was originally endorsed at the Tripartite Summit of Heads of State and Government in Johannesburg in June 2011. Endi