Discussions

Outcomes of the 37th SADC Summit

Outcomes of the 37th SADC Summit

25 Aug 2017

Talkmore Chidede, tralac Researcher, discusses the key outcomes of the 37th SADC Summit, held on the theme ‘Partnering with the private sector in developing industry and regional value-chains’

On 19th and 20th August 2017, the heads of state and government (HOSG) of the Southern African Development Community (SADC) convened in Pretoria, South Africa, for the 37th Ordinary SADC Summit. The Ordinary SADC Summit was preceded by a series of meetings by SADC Standing Committee of Senior Officials (10th – 13th August), SADC Finance Committee (12th August), SADC Council of Ministers (15th – 16th August) and SADC Double Troika (18th August). There were also several multi-stakeholder workshops / conferences / exhibitions that took place in preparation for the Summit including the Industrialisation Week from July 31st to August 4th, held in Johannesburg, South Africa.

The Summit is an institution established by the 1992 Treaty Establishing the SADC (SADC Treaty) as the supreme policy-making institution of the region, ‘responsible for the overall policy direction and control of the functions of SADC’ (Article 10.2 of the SADC Treaty). It is made up of all HOSG, and is managed through a troika system comprising the current chairperson, the incoming chairperson and the immediate previous chairperson. The Summit normally meets annually in August to discuss regional issues.[1] The Summit adopts regional legal instruments and makes decisions by consensus, which are binding on SADC governments.

This year’s Summit took place under the theme ‘Partnering with the private sector in developing industry and regional value-chains’, highlighting the significance of involving the private sector in implementing and achieving the pdf SADC’s Industrial Strategy and Action Plan (2.58 MB) , and developing regional value chains.

The private sector is an important driver for regional economic integration and development, therefore its active and increased participation in SADC’s socio-economic projects is necessary. SADC admits that private sector involvement is crucial to the advancement of the region’s trade and investment, employment creation, infrastructure and transportation, agriculture and food security and tourism.[2] Article 16A of the SADC Treaty requires member states to establish National Committees consisting of key stakeholders from the private sector, government, civil society, non-governmental organisations, workers and employers’ organisations. The Committees ‘provide inputs at national level in the formulation of regional policies and strategies, as well as coordinate and oversee the implementation of programmes at national level’ and ‘are also responsible for the initiation of SADC projects and issue papers as an input into the preparation of the Regional Strategies.’[3] However, active private-sector participation at regional level is still limited in SADC and Africa at large.

At the Summit, the HOSG discussed several issues including industrialisation and regional integration. They emphasised that member states should operationalise the theme through the implementation of projects with focus on agro-processing, energy, pharmaceuticals and mineral beneficiation projects, boosting skills to enhance regional integration and to create mechanisms to increase private participation. The leaders also urged member states to mobilise resources and operationalise the SADC Regional Development Fund to support and drive the industrialisation agenda. Member states were also urged to partner with the private sector in developing industry and regional value chains.

According to the Communiqué, the ‘Summit also noted progress in the implementation of the Industrialisation Strategy and Roadmap 2020-2063 in specifically profiling value chains in the three priority sectors of agro-processing, mining and pharmaceuticals and urged member states to keep the momentum and develop and actualise the identified value chains.’

The regional leaders also noted the recent discovery of natural gas in the region and, accordingly, directed the SADC Secretariat to facilitate the establishment of a Regional Natural Gas Committee – to promote the inclusion of natural gas in the regional energy mix for industrial development.

SADC leaders also approved the Protocol for the Protection of New Varieties of Plants in the SADC Region, 2014. The Protocol will provide for the establishment of an effective system of plant variety protection, promote the development of new varieties of plants for the benefit of the region and protection of breeders’ rights (Article 2). It will enter into force after being signed and ratified by two thirds of the member states, and will become legally binding on state parties. The Protocol has been heavily criticised by civil society organisations and small farmers who argue that the legal instrument is inflexible and restrictive to individual member states and to the detriment of small farmers.

Regarding continental integration, SADC leaders underscored that the Continental Free Trade Area (CFTA) should find expression in the work of the Tripartite Free Trade Area (TFTA). That is, the objectives of the CFTA must be reflected in the creation of the TFTA. The CFTA, expected to be launched in December this year, is intended to create a single continental market for goods and services, with free movement of business persons and investments, and thus boost intra-African trade. The CFTA negotiations are divided into two phases. Phase I (on-going) covers trade in goods and trade in services, while phase II will cover investment, intellectual property and competition issues. The recent CFTA trade negotiation forum meeting (June 2017) adopted the modalities for tariff liberalisation and trade in services negotiations. The TFTA is a free trade agreement between SADC, Common Market for Eastern and Southern Africa (COMESA) and the East African Community launched in June 2015. The Agreement has been signed by 20 countries[4] so far, and will enter into force once ratified by 14 countries. Egypt is the only country that has ratified the Agreement. The TFTA has been designed a building block for the CFTA, yet there has been very slow progress in the negotiations of the TFTA. Negotiations on tariff reductions are still ongoing.

At the Summit, Comoros was admitted as a new member of SADC, bringing the region’s membership to 16. Comoros is also a current member of the COMESA and Economic Community of Sahelo-Sahelian Countries (CEN-SAD). Burundi’s application to join SADC is still being assessed. All the outcomes of the Summit are contained in the Communique.[5]

It must be emphasised that developing industry and regional value chains in SADC is important. Especially considering that the region is predominately viewed as a producer and an exporter of raw products and an importer of value-added products. Industrialisation and regional value chains are crucial to the achievement of SADC’s regional and continental integration agenda. In addition, these goals can be achieved with significant involvement of the private sector.

SADC has adopted an array of critical agreements which have not yet entered into force including, inter alia, the New Protocol on the SADC Tribunal, the Protocol on Trade in Services, the Protocol on the Facilitation of Movement of Persons, and the Protocol on Science, Technology and Innovation. SADC member states were urged to sign, ratify or accede to the Protocols at the previous Summit, but nothing has been done so far. These issues were not discussed during this year’s Summit either.

In this context, it is also important stress that mere adoption of several agreements or policies is not sufficient for bringing about effective economic development in the region. Implementation is equally important. Thus, strong political commitment on the part of governments to implement the relevant agreements and policies are necessary for achieving SADC’s agendas.

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[1] Article 10.5 of the SADC Treaty, however, stipulates that the Summit shall meet at least twice a year.

[2] See http://www.sadc.int/themes/economic-development/private-sector/

[3] See http://www.sadc.int/about-sadc/sadc-institutions/national-committees/

[4] South Africa and Madagascar were the last two countries to sign the Agreement, in July 2017.

[5] Available at https://www.tralac.org/news/article/12021-communique-of-the-37th-summit-of-sadc-of-heads-of-state-and-government.html