By Jeff Kapembwa
Lusaka------The 21-member-Common Market for Eastern and Southern Africa (COMESA) needs to reboot intra trade by adopting various tactical measures and counter COVID-19 plague effects to attain growth in the region.
The advent of the pandemic, has resulted in economic meltdown globally and COMESA has not spared from these negative economic effects. Member states are implored to initiate defensive mechanisms, or risk losing all gains attained since its transformation in 1994.
The International Monetary Fund projects that the global economy will contract by 3% this year, far worse than during the global financial crisis and it is expected to grow by 5.8% in 2021, assuming that the pandemic fades in the second half of 2020 and containment measures are lifted.
Sub Saharan Africa growth is projected to contract by 1.6% in 2020 and grow by 4.1% in 2021. World Trade Organization (WTO), merchandise trade could fall by 13% and 32% in 2020 depending on the length and severity of the Covid-19 pandemic. In addition, world trade volume (goods and services) are projected to contract by 11% in 2020 and rebound to 8.4% in 2021.
Since the start of the pandemic COMESA has recorded a drop in Cross border trade and reduced bilateral trade among member states because of border restrictions. It has initiated a deliberate policy for nationals living in the diaspora to remit investments to their countries as a means of stimulating economic recovery and improving liquidity in the countries.
COMESA needs a regionally coordinated approach to mitigate the effects of the pandemic on economies of member states, arguably to allow free movement of both, essential and non-essential goods within and out of COMESA.
According to a report availed to Southern Times in Lusaka by COMESA Research Experts, Benedict Musengele and Jane Kibiru; the region will also need to enhance production capacity and regional value chains to reduce over-reliance on external trade and vulnerability to global shocks.
Additionally, the region should diversify markets for its imports and exports to reduce dependency on few countries. There is need to identify and provide incentives to manufacturing companies with capacity to produce COVID-19 essential products and facilitate their trade in the region.
Fast- tracking the creation of an online platform for sharing information on availability of essential products during the pandemic period, are among other initiatives to spur trade and ensure recovery from the losses incurred.
“Given the disruption that mitigation measures have had on the regional supply chains, the implementation of the COMESA Digital Free Trade Area, encompassing e-Commerce is no longer an option but imperative for economic recovery and growth.” It says.
The fate of COMESA member states could however, be salvaged from further loses with the ministers responsible for regional trade in COMESA adopting a set of common guidelines on trade facilitation which are yet to be gazzetted.
The set of rules provides the springboard to not only relaunch intra- COMESA trade but also to build resilience to withstand future shocks on regional economies.
The turn of events presents an opportunity for COMESA Member States to consolidate and strengthen regional economic integration towards meeting the aspirations of structural transformation, sustainable and inclusive growth.
The research paper notes that trade is emerging as the remedy to reduce the pandemic’s adversity through flow of essential goods like food, medical supplies and other hygiene products amongst COMESA member states.
“The relaxation of the free movement of essential goods in the region will enhance their production and boost intra-COMESA trade during this pandemic period,” the report says. It cites the implementation the Digital Trade Facilitation and other instruments as core in mitigating vulnerability to shocks such as Covid-19 pandemic.
The report identifies pharmaceutical products as being among the top intra-COMESA traded products, which could immensely grow as the import origin markets namely EU, India, USA, China and UK are among the hard hit by Covid-19. The five contribute 45%, 19% 6% 4% and 3% of the source market for pharmaceutical products to COMESA.
According to an International Trade Centre report, some countries like UK, US, China and India have imposed export restrictions in some pharmaceutical products, which may affect their importation, yet these are critical in the fight against COVID-19.
COMESA is a net importer of pharmaceutical products with exports amounting US$ 442.53 million in 2018 and imports worth US$ 6,451.03 million respectively. The intra- COMESA exports of pharmaceutical products constituted 32 % of the exports.
“This shows that pharmaceuticals are a major intra-COMESA export hence the need to facilitate its cross- border trade during this pandemic period,” the COMESA researchers note in the report.