Is SADC’s single market dream farfetched?

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Timo Shihepo

Windhoek - The Southern African Development Community (SADC) has to create a single market for it to achieve full integration ‑ a feat that seems improbable for now.

A single market can be defined as a coalition of countries trading with each other without restrictions or tariffs. It seeks to guarantee the free movement of goods, capital, services and labour.

In theory, a single market, would result in the benefits of free trade, such as lower prices, higher quality products, increased competition, and factor mobility in the SADC region.

However, the region has been finding it difficult to make a breakthrough in establishing a customs union, which will pave the way for a SADC single market.

The SADC customs union was supposed to be operational already by 2010 to allow for the establishment of the single market known as the common market by 2015.

Three years later, there seems to be no new timeline for the establishment of a single market.

The delay in establishing a SADC customs union subsequently also led to the delay in establishing a monetary union for the region. A monetary union was earmarked to be operational by 2016 with the aim of establishing a single currency for the region.

Despite the delay, the SADC Secretariat insists that regional economic integration, which involves the creation of a single market, remains central to the economic ideals of the SADC region.

It says integration involves the removal of barriers to economic activity across national boundaries, starting with trade integration, followed by the integration of factor markets.

“The intention is to achieve a ‘single market, whereby markets for trade in goods, services, labour and capital operate on a regional rather than on a national basis,” SADC Executive Secretary, Dr Stergomena Tax, told The Southern Times.

Dr Tax said the SADC region is pursuing a developmental approach to integration and not a linear approach, with a focus on the consolidation of the SADC Free Trade Area (FTA).

The SADC FTA, which was implemented in 2008, aims to liberalise intra-regional trade in goods and services, ensure efficient production, contribute towards the improvement of the climate for domestic, cross-border and foreign investment, and enhance economic development, diversification and industrialisation of the region.

Once the FTA has been consolidated, Dr Tax says, an evaluation will take place to inform the way forward regarding SADC moving towards a customs union.

“Worth mentioning is that moving towards a customs union will, among others, necessitate that the issue of overlapping membership to regional economic communities be dealt with – as technically and legally, no single country can belong to two customs unions,” she said.

To demonstrate that the regional integration is still high on the SADC agenda, Dr Tax further indicated that SADC is also focusing on the SADC-Common Market for Eastern and Southern Africa-East African Community (SADC-COMESA-EAC) Tripartite Free Trade Area and the continental free trade area, through the African Union, for further integration.

“Issues of free movement of people are an agenda at both the regional and continental levels,” she said.

The European single market, also called the ‘internal market’, is the most well-known and significant of the world's existing single markets, which came into effect on 1 January 1993. Other single markets include the 12 Caribbean nations that make up the Caribbean Community and the 10-member Association of South East Asian Nations Economic Community founded in 1967.

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