South Africa a threat to Africa’s Free Trade Area?

By Nqobile Charles Bhebhe

Posted on June 8, 2011 13:54

A free trade area (FTA) planned for launch between three of Africa’s regional economic blocs has been criticised for benefitting big South African companies over smaller scale businesses.

Heads of states from 26 countries are expected on Sunday in South Africa to agree on a plan to sanction a “grand free trade” agreement between the Common Market for East and Southern Africa (Comesa), East African Community (EAC) and the Southern African Development Community (Sadc).

All three regions have a combined population of 590-million with a gross domestic product (GDP) of US$860 billion.

It is expected that the combined GDP of these countries will top $1-trillion by 2013.

Once in place, the free trade zone would facilitate the smooth movement of goods and services across member countries, boosting intra-regional trade and expanding both business options and trade opportunities.

But dissenting voices have emerged claiming that South Africa, with its strong industrial base would be the major beneficiary as it would flood smaller member states with its products and in the process stifle local industries.

Zimbabwe Industry and Commerce minister Welshman Ncube, in an interview said tough measures would be crafted to protect individual countries industries.

“We are aware of such a treat but the protocol would have measures to safeguard home industries and markets” Ncube told The Africa Report.

Doubts also abound on the benefits of the grand FTA and whether it will automatically lead to economic growth.

Once the authorization of a free trade agreement has been signed, a protocol on the free movement of business within the three regions will come into effect.

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