The Common Market for Eastern and Southern Africa (COMESA) was formed in 1994, replacing the Preferential Trade Area that had been in place since the early 80s. The following 19 countries are members of COMESA: Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya , Madagascar , Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe. Together, these countries have a combined population of about 450 million people and a combined gross domestic product of about USD560 Billion, constituting a huge market for investment, with the highest rate of return on investment in the world.
What COMESA aims to achieve
To attain sustainable growth and development of the Member States by promoting a more balanced and harmonious development of its production and marketing structures;
To promote joint development in all fields of economic activity and the joint adoption of macro-economic policies and programmes to raise the standard of living of its peoples and to foster closer relations among its members states;
To cooperate in the creation of an enabling environment for foreign, cross- border and domestic investment and in the joint promotion of research and adaptation of science and technology for development.
To cooperate in the promotion of peace, security, and stability among the Member States in order to enhance the economic development in the region;
To cooperate in strengthening the relations between the common market and the rest of the world and in the adoption of common positions in international fora; and
To contribute towards the establishment, progress, and the realisation of the objectives of the African Economic Community.
In pursuing this vision, COMESA has already achieved some very notable successes, emulated all over the continent. The COMESA Free Trade Area was formed in October 2000. At that time, intra-COMESA trade was only USD 3.1 Billion, but due to its robust trade liberalisation and trade facilitation programs, this trade has now grown to over USD 18.4 Billion in 2012.
To further deepen the regional integration and harmonise the policy space, in order to reduce the cost of doing business, COMESA has launched its Customs Union, designed to take forward the programs for customs cooperation, which deal with reducing documentation and unnecessary customs procedures, and modernising of customs operations in line with best practices drawn from all over the world, In addition, the Customs Union provides an investment space behind the Common External Tariff that reflects a suitable industrial policy to allow competitive sourcing of capital goods, raw materials and other inputs, which affording a degree of protection to industries in the region producing finished products.
The next milestone in the COMESA integration trajectory is to establish the Common Market in the year 2015, and thereafter a monetary union in 2018.
How-ever, before then, programs are already underway to facilitate free movement of investment, persons and services, and to promote macroeconomic and fiscal convergence through adherence to a set of internationally recognised criteria.
Over the years, on the basis of the criteria, macroeconomic stability in the region has greatly improved.
As an investment destination, therefore, COMESA offers sustainable macroeconomic stability underpinned by a robust program that has been tried and tested over the years, and is now overseen by a dedicated institution called the COMESA Monetary Institute.
Furthermore, political stability has improved over the years, thanks to a robust program on peace, security and good governance.
Safety of human life is now guaranteed. Infrastructure programs have greatly assisted promote interconnectivity of the region into a seamless economic space, accessible by surface and air transport, and overall improved the competitiveness of the region. The countries of COMESA have over the years put in place programs to improve the business and investment environment, which have yielded good results already as evidenced by the increasing regional and foreign direct investment inflows.
COMESA has established a number of institutions to support the regional trade and investment regime. To give some examples: The COMESA Regional Investment Agency assists to promote the region as an investment destination, providing valuable information on investment opportunities. The African Trade Insurance Agency provides cover for non-commercial risks, a first of its kind in the world; supported by the Regional COMESA Reinsurance Company.
The Regional Payment and Settlement System provides a quick and competitive mechanism for effecting payments for goods and services in the region, with payments completed in 24 hours. The COMESA (PTA) Bank provides trade and project finance directly to the private sector, and is highly rated globally. The COMESA Court of Justice assists in ensuring that COMESA is a rule-based organisation, for companies can challenge governmental measures that break COMESA rules.
The COMESA trade and investment regime, supported by the institutions, have been an important factor in the speedy recovery of the region from the global financial crisis and the economic recession, and the region is back to high growth rates. Recent influential publications, such as Lions on the Move by McKinsey, and the Fastest Billion by Renaissance Capital, together with the World Economic Forum, consistently highlight Africa, including COMESA, as the place to be for business and investment.