The Common Market for Eastern and Southern Africa

Abstract

This chapter examines the performance record of the Common Market of Eastern and Southern Africa (COMESA) as a regional trade agreement. The COMESA is the second largest regional trade agreement in Africa in terms of the number of member countries. It consists of 19 countries in Eastern and Southern Africa, which together account for 36.8% of Africa’s total land area, and in 2019 housed 42.7% of Africa’s total population, and generated 31.8% of its total GDP. Began as a preferential trade area (PTA) in 1980, it changed its name to COMESA in 1994, became a free trade area in 2000, and a customs union in 2009. Since then, it has been seen as one of the more successful RTAs in Africa.

However, intraregional trade has not improved much since its formation. In 1995, only 7.4% of export trade was conducted within COMESA. In 2019, intraregional export trade was still under 10%. Trade with the rest of Africa shows a similar trend. However, the percentage share of trade with Africa increased slightly over the past decade, rising to 22.9% in 2015. In contrast, trade with the rest of the world over the same period accounted for more than 70% of total trade. Thus, like all its fellow RTAs, COMESA trades more with countries outside its group than those within it.

The composition of both export and import trade of COMESA is not very different from the trade of other RTAs in Africa. Thus, COMESA’s export trade tends to be dominated by primary goods while its import trade is dominated by manufactured goods. For example, in 1995 primary goods accounted for 68% of COMESA’s merchandise export. In 2019, primary goods still accounted for 69.8% of total exports. In contrast, manufactured goods constituted 70% of total import in 1995. In 2019, it was down to 62.9% but still substantial.

The lackluster trade performance of COMESA has been attributed to several factors and reasons, including the slow implementation of removal of tariffs and non-tariff barriers, lack of political commitment, which manifests itself in the way member states deal with action agenda items and irrelevance of economic integration, lack of necessary conditions—small market size of African countries; similar country endowments that make it difficult for collusive trade policies; lack of common interest among members due to the fact that all the countries had prior trading partners outside of the group; multiple or overlapping membership that divides loyalty, and the conflict between COMESA and SADC that made the proposed merger to be met by a cold reception. The predominance of primary products in the economies of COMESA provides less incentives for intraregional trade, and unless there is a major shift in the economies toward production of manufactured goods, it will be difficult for COMESA to improve its intraregional trade.