Global economic powers eye bigger stake in Africa trade blocs

The United States has given a $77 million five-year grant to the Common Market for Eastern and Southern Africa to help reduce cross-border risks to trade and to pave the way for increased foreign investment.

The Comesa market is currently dominated by the European Union and China.

The signing of the memorandum of understanding took place in Madagascar’s capital Antananarivo at Comesa’s 36th intergovernmental committee meeting, ahead of the Heads of State Summit that will take place from October 18-19.

Comesa Secretary-General Sindiso Ngwenya signed the deal on behalf of his organisation, while Eric Schultz, the US ambassador to Zambia, who also doubles as the special representative to Comesa, and USAid deputy director for Kenya and East Africa Candace Buzzard, signed on behalf of the US government and USAid.

The funding will go towards strengthening regional trade, investments and agricultural development programmes.

This funding will help Comesa’s regional programmes under the Africa Growth and Opportunity Act (Agoa), such as Trading for Peace, Agriculture, Sanitary and Phytosanitary Standards, commodity trade in the bloc, gender, energy and climate change.

Through this agreement, Comesa and USAid will work together to promote regional economic integration, reinforce institutional governance and accountability and strengthen Comesa’s organisational leadership.

The 2014 Comesa annual report shows that the bloc imported goods worth $170 billion in 2013. The EU remains the bloc’s leading source of imports of manufactured products — whose value increased from $43 billion in 2012 to $44 billion in 2013, accounting for 26 per cent of Comesa’s global imports. 

China commands a 12 per cent share of imports into Comesa countries, while the US trails in fifth position, with only five per cent of the total value of imports into Comesa.

Comesa spokesman Mwangi Gakunga told The EastAfrican that the deal follows the adoption of a five-year East Africa Regional Development Co-operation Strategy (2016 – 2020) by USAid in May.

The strategy aims to enhance sustainable economic growth and resilience in the bloc.