FTA will benefit weaker states: Expert
Johannesburg - Weaker countries that fear being overwhelmed
in a huge African free trade area (FTA) will benefit from it in the long term,
a development expert said on Sunday as leaders of 26 governments met to try to
accelerate the creation of the zone.
In the short term, “you have to acknowledge the fact that
within an FTA there are winners and losers,” Kennedy Mbekeani, an African
Development Bank official, said in an interview.
But he said as the zone helps boost the region’s economies,
smaller members will benefit and find and develop sectors where they have
competitive advantage. “They should not be defensive, they should go in with an
open mind,” said Mbekeani, recently appointed by his bank to help find ways to
support the zone that stretches from Egypt down to South Africa and from Angola
across to Madagascar.
The bank would like to see a continentwide free trade zone,
and sees the south and east bloc as an important step in that direction.
In the early days, Mbekeani said, some countries will want
to establish tariff and other barriers. He said barriers should be temporary,
and while they are in place, countries should be strengthening their economies.
In a speech to the summit on Sunday, the leader of
Swaziland, King Mswati III, expressed some of the misgivings of countries like
his, with among the smallest populations and weakest economies in the zone.
Mswati called for negotiations to proceed cautiously.
“We should not compete, but complement one another so that
we can all share in its success,” the king said.
Host South Africa is the continent’s economic powerhouse,
but has high levels of unemployment and poverty. President Jacob Zuma, in his
address to the summit, said the zone will help neighbors work together to
alleviate poverty and build industrial capacity.
“There is no single country that can prosper on its own,”
The zone brings together members of the Southern African
Development Community, the Common Market for Eastern and Southern Africa and
the East African Community. Officials envision members lobbying together for
aid and investment, presenting coherent and integrated plans. Plans for the
zone include joint projects to improve roads and rail networks and power
Trade and Industry Minister Rob Davies said the three trade
blocs behind the free trade agreement have a combined population of 533
million, or 57% of the combined population of African Union member states, and
a combined gross domestic product (GDP) of $833bn or 58% of the continent’s
“Given the fact that many African countries are too small to
grow an internal market themselves, ... enlarging a regional market of a
reasonably sizable proportion is a very, very important step forward,” Davies
Foreign companies also will see opportunity in a larger
market - EU and British observers attended Sunday’s summit.
Multinationals can send their goods duty free across African
borders if they set up factories - creating jobs for Africans - within the
zone. Mbekeani says the rules, yet to be worked out, should allow non-African
companies to set up a factory in the zone to assemble products that might rely
on inputs from elsewhere.
Mbekeani said it is hard to predict when the zone might
resemble the European Union, with its single central bank and a currency used
across borders. He pointed out that the EU has been a work in progress since
the 1950s, and still encounters problems. One lesson Africa can learn from Europe,
he said, is “not to move too fast.”