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African ministers reaffirm commitment to free trade

FLIC EN FLAC(Mauritius): African finance ministers reaffirmed their commitment on Saturday to their ambitious dream of creating a free trade zone this year from Egypt in the north to Angola in the south.

But there was no agreement on poorer countries' demands for compensation for the loss of government revenue which would accompany the removal of regional tariff barriers.

In any case, wars and political differences among the disparate members of the Common Market for Eastern and Southern Africa (COMESA) seem certain to trip up the six-year-old organisation's plans.

The two-day summit meeting in Mauritius ended with a communique committing members to "implement the COMESA Free Trade Area (FTA) on October 31, 2000", but no mention of the issue of compensation.

"We need to work out a compensatory mechanism which will cushion those short-term revenue losses for some countries," Rwandan Finance Minister Donald Kaberuka told Reuters.

Although Kaberuka says he is confident all the countries in the region would benefit from free trade in the long run, many of them depend on trade tariffs as an important source of government revenue.

"It is extremely important that this (compensatory) mechanism) be in place not only for Rwanda but for many other countries," he said.

Mauritian Finance Minister Vasant Bunwaree also said he was concerned many countries were not ready to strip tariff barriers away completely.

"Some countries have shown their fears on the FTA," he told Reuters. "The zero-tariff system should not create victims among the COMESA member countries."

Ten of COMESA's 21 members are either involved in civil wars or are fighting each other, many of them involved in the war in the Democratic Republic of the Congo.

Tanzania is already planning to pull out of the organisation in July, partly because of its concern about the effects that removing tariffs would have on its fragile industrial sector, as well as on government revenues.

COMESA members' record of living up to their promises is also not good.

Despite a decade of liberalisation, tariffs remain stubbornly high within the region, and intra-COMESA trade remains paltry at $4.2 billion in 1998 compared to total foreign trade worth $62 billion.

The establishment of a free trade area will be the main item on the agenda when COMESA heads of state meet in Mauritius on May 17.

COMESA represents a market of 380 million people and a combined Gross National Product of $170 billion.

It groups Angola, Burundi, Comoros, the Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.-Reuters