Africa's Emerging Single Market

African Leaders Agree To Form Single Market

By Robert Odongo
Wed Oct 22, 3:31 pm ET
Courtesy Of Yahoo News (Agence France-Presse)

KAMPALA (AFP) – Leaders from three African trading blocs accounting for more than half the continent's industrial output agreed Wednesday to form a single market and aimed to set up a free trade area.

They resolved to "immediately start working towards a merger into a single (bloc) with the objective of fast-tracking the attainment of the African Economic Community," a statement said.

Six heads of state and foreign ministers from 26 countries of the East African Community, Common Market for Eastern and Southern Africa (COMESA) and Southern Africa Development Community gathered for the meeting in Kampala.

They also agreed on "the expeditious establishment of a Free Trade Area encompassing the member/partner states of the three (blocs) with the ultimate goal of establishing a single customs union."

A framework to form the Free Trade Area will be drawn up in six months.

The summit comes as the world's poorest continent grapples with the effects of steep food and energy prices as well as the impact of a credit crunch that has hit exports around the world.

Such crises posed a "serious threat to the growth of African economies particularly in terms of demand for African exports of goods and services," the statement added.

South African President Kgalema Motlanthe said poor nations, whose economy might be shocked by the dynamics of the world financial market, should be given positions at global institutions.

"While Africa and other developing countries had marginal influence over the decisions that have brought the international finance systems to the brink of collapse, unjustifiably, African countries will bear the brunt."

"Development countries must be included in the governance of all international financing institutions to mitigate adverse effects on them," said Motlanthe.

Kenyan President Mwai Kibaki said the creation of a single market would help alleviate poverty and offer employment by boosting efficiency in production, increasing trade and investments.

"We should therefore be steadfast in supporting our desire for a bigger regional bloc that can finally culminate into an African Economic Community," said Kibaki, who chairs COMESA.

Ugandan President Yoweri Museveni described the envisaged single market and integration as "a strategic tool" for prosperity.

Rwanda's Paul Kagame, credited with masterminding the reconstruction of his tiny nation following the 1994 genocide that claimed 800,000 lives, said "the summit constitutes another chance that we need to do more for our region."

"It is inevitable that the integration will seemingly produce losers and winners initially, but in the long run it will benefit all of us," Kagame said.

The three blocs comprise 527 million people and a combined GDP of 624 billion dollars or 58 percent of the GDP of the African Union.

But the drive for a single market faces obstacles arising from countries having overlapping membership in the three blocs, presenting a barrier to the creation of a common customs union.