Friday, October 24, 2008

Tripartite to compensate poor member countries


Leaders from 26 African countries have agreed to set up a compensation mechanism for member countries likely to lose revenue in the early stage of economic integration.

This was revealed by the Common Market for Eastern and Southern Africa (Comesa) Secretary General, Mr Sindiso Ngwenya yesterday during a press conference at the Media Centre.

Mr Ngwenya said some people misunderstood Rwandan President Paul Kagame’s statement at the Tripartite summit on Wednesday that in any economic integration there are winners and losers at the initial stage.

“The reason why there are winners and losers is because we are all starting at different levels. But mechanisms will be put in place to compensate disadvantaged regions. There is no point why a country should develop alone while the other is not developing,” Mr Ngwenya said.

He said Article 150 of Comesa provides for the compensation mechanism. He said what Africa needs is for politicians to agree to pool resources and get development programmes done by one economic bloc.

“Instead of relying on aid to build infrastructure and develop our trade, why don’t we come together and share the cost of all the development programmes?” Mr Ngwenya asked.

Mr Ngwenya reiterated the advantages of forming one customs union, saying all countries in the union will surrender internal trade policies and operate as a group. He said members outside the bloc will be restricted or given different guidelines to trade with members in the in the economic bloc.

He said it is easy for the East African Community, Southern African Development Community and Comesa to integrate because all the three blocs have same objectives of forming a free trade area.

“We have formed a bloc which comprises of 65 per cent of African population with combined gross domestic product of $650 billion. This region will be able to compete internationally,” Mr Ngwenya said.

He said Ugandan companies will be able to pay a common tariff at the Mombasa Port once the trade barriers among member countries are removed, adding that this will make transaction of business easy.