Hope, fears as tripartite free trade area takes off

Dar es Salaam. There are hope and fears among members of the business community in Tanzania as the Comesa-EAC-Sadc Tripartite Free Trade Area (TFTA) Agreement comes into force Thursday, July 25, 2024.

A statement from the EAC (East African Community) headquarters in Arusha noted on Tuesday that the Comesa-EAC-Sadc TFTA starts following the attainment of the required threshold.

“For the Agreement to take effect, at least 14 out of the 29 Member/Partner States needed to deposit their Instruments of Ratification….The entry into force of the Agreement follows the depositing of Instrument of Ratification by the Republic of Angola on 25th June 2024, bringing the total number of the Instruments of Ratification deposited to 14, the number required for the Agreement to enter into force,” the statement said.

The update was announced during the 37th Tripartite Task Force Meeting, which took place on July 20 on the sidelines of the 6th African Union Mid-Year Coordination Meeting in Accra, Ghana.

The meeting, according to the EAC, was attended by the Chief Executive Officers (CEOs) of the three Regional Economic Communities (RECs) who include the Executive Secretary of the Southern African Development Community (SADC) and Chairperson of the Tripartite Task Force, Mr Elias Mpedi Magosi; the EAC Secretary General and Secretary General of the Common Market for Eastern and Southern Africa (Comesa), Mr Chileshe Mpundu Kapwepwe.

The meeting was informed that so far the Member/Partner States that have deposited their Instruments of Ratification include Angola, Botswana, Burundi, Egypt, Eswatini, Kenya, Lesotho, Malawi, Namibia, Rwanda, South Africa, Uganda, Zambia and Zimbabwe.

“These countries together accounted for 75 percent of the Tripartite GDP in 2022,” the statement said.

Tanzania has not yet ratified and efforts to get the government’s views on the matter are still ongoing.

However, analysts and members of the business community in Tanzania said there were both benefits and disadvantages for a country to ratify the TFTA.

Dr Lutengano Mwinuka of the University of Dodoma (Udom) said regional blocs have many market advantages since they expand the scope of trading across many countries. As such, he said, there were inevitable in this era.

He noted, however, that despite the opportunities, if the market does not promote a win-win situation for all countries, larger economies may benefit the most at the expense of smaller ones.

“Tanzania has not entered these markets, perhaps there are conditions that it is still evaluating. It cannot open all the doors at once. It has to go step by step. Regional blocs are beneficial as they increase product competition,” he said.

The Director of Policy and Advocacy at the Confederation of Tanzania Industries (CTI), Mr Akida Mnyenyelwa, said members of the business community have been participating in the TFTA from the beginning and that its benefits were well known to them.

He, however, noted that for Tanzania to benefit from the markets, it must improve the infrastructure of roads, railways, and electricity so that industries can reduce operational costs and increase production failure so that local traders will remain as observers.

“In those markets, there is a lot of competition if you enter unprepared, you may find yourself struggling. There are many benefits, especially for industries, as they will be able to expand their markets beyond domestic boundaries. However, I have no answers as to why Tanzania has not signed; perhaps there are issues it is still addressing,” he said.

And, according to Mr Magosi, on June 20, the Republic of Djibouti notified the Comesa Secretariat that it had ratified the Agreement.

“The objective of establishing the Comesa-EAC-Sadc FTA was to enhance market access, address the issue of multiple memberships, and further the objectives of cooperation, harmonisation, and coordination of policies among the three Regional Economic Communities (RECs),” he said.

The 29 Tripartite Member/Partner States represent 53 percent of the African Union’s membership, more than 60 percent of continental GDP ($1.88 trillion), and a combined population of 800 million.

The Tripartite framework is based on three pillars: Market Integration, which involves trade liberalisation through the creation of a Free Trade Area and arrangements for the movement of business persons; Infrastructure Development, which focuses on enhancing connectivity and reducing business costs; and Industrial Development, which aims to create a supportive environment by improving regulatory and legal frameworks, adding value, diversifying industries, increasing productivity and competitiveness, and implementing programmes for structural change.

EAC secretary-general Veronica Nduva, highlighted the need to consolidate the Tripartite FTA through the Agreement’s implementation, to harness potential benefits, preserve gains, and strengthen the participation of Member/Partner States in the AfCFTA.

“The fact that we have reached the required ratification threshold of 14 ratifications, developed modalities for implementing the Tripartite Agreement, finalised most aspects of the Rules of Origin, continued with engagements on tariff offers, and developed the Tripartite Protocol on Competition Policy demonstrates that the Member/Partner States are committed to the process,” she said.