At the very outset I would like to thank, Her Excellency, Dr Nkosazana Dlamini Zuma, Chairperson of the African Union Commission and the entire Commission for providing free of charge the African Union conference facilities and logistical support services for this Summit and the meetings that preceded this Summit. This gesture is further confirmation, if any was needed, of the illustrious leadership that our Chairperson has provided and continues to provide to Regional Economic Communities in Africa that are building blocks for the realization of the African Economic Community. I have no doubt that under your leadership and support we shall realize in the short term the Continental Free Trade Area (CFTA) and the milestones in the African Union Agenda 2063.

The founding fathers of COMESA were conscious that COMESA should contribute to the integration of African markets by explicitly providing in Article 3(f) of the COMESA Treaty that COMESA shall “contribute towards the establishment, progress and the realization of the objectives of the African Economic Community”.

I would be remiss in my responsibility if I did not acknowledge the role played by the Joint Secretariat of the African Economic Community that comprises the African Union Commission, the African Development Bank and the United Nations Economic Commission for Africa. It is thanks to the individual and collective leadership of their Excellencies, Dr Nkosazana Dlamini Zuma, Chairperson of the African Union Commission, Dr Donald Kaberuka, President of the African Development Bank and Dr Carlos Lopes, Executive Secretary of the United Nations Economic Commission for Africa that we are witnessing a renaissance and golden age in regional integration in COMESA in particular and Africa at large.

The year 2015 is important in the calendar of your organization in that when the COMESA Treaty came into force in December, 1994 in Lilongwe in Malawi it was envisaged that a fully functioning Common Market would be in place this year. In addition, it is twenty years since COMESA was established.

Having come this far, it is time to reflect on what Member States have individually and collectively achieved. An all encompassing review on the operations of Common Market clearly demonstrates that COMESA is unique in that it has autonomous and semi autonomous financial and technical institutions that on a daily basis provide services to governments, quasi government institutions and the private sector. When account is taken of the contribution of these Institutions, COMESA emerges as a formidable organization for social and economic transformation. I will highlight the role and impact of these institutions later on during my intervention.

Trade in Goods and Services

On market integration through trade liberalization, COMESA was the first regional economic community in 2000 to launch a Free Trade Area that is duty and quota free. Traditionally we have reported on trade and goods which exclude trade in services. This does not give us a complete picture and appreciation of the scope and depth of market integration through trade in goods and services.

With respect to trade in goods, the volume of trade has increased from United States Dollars 3.2 Billion in 2000 to 22.4 Billion United States Dollars in 2014. This remarkable seven fold increase confirms that the COMESA trade regime is working. This trade does not include informal cross border trade which is estimated to be thirty percent of total trade within the COMESA region. Although there has been a seven fold increase in trade among member States, this still accounts for about 10 percent of trade with the rest of the world.

An analysis of the potential trade within COMESA by the Secretariat in 2014 revealed that annually the region imports United States 97 billion worth of goods that are produced and traded within the region. The sectors with the highest trade potential are in textiles, wooden furniture, household items, leather products, white and red meat to mention but a few. This suggests that the COMESA region does not have the supply side capacity. The implementation of the COMESA industrial policy should go a long way towards developing the supply side capacity, either through increased utilization of installed industrial capacity or new investments.

Trade in Services

The services sector is critical for COMESA economies in that services account on average for more than 50 percent of the region’s Gross Domestic Product. Trade in services with the rest of the world and within COMESA is dominated by transport, communications, insurance and government services. This excludes non tradable services such as hair-cuts and domestic health services.

In 2013 the total value of import and export trade within COMESA and the rest of the world was United States Dollars 76 Billion, of which imported and exported services were United States Dollars 41 Billion and 35 Billion United States Dollars respectively.

The Secretariat working with appropriate national institutions is in the process of breaking down the global figures of trade in services with a view to reporting on trade in services among member States. In future, we shall report on both trade in goods and in tradable services. This will give an accurate picture of the both trade in goods and tradable services within the Common Market and its impact on employment and economic growth.

COMESA, EAC and SADC Tripartite Free Trade Area

The decision you took in Munyonyo, Uganda in October, 2008 at the first COMESA-EAC-SADC Summit to establish the Grand Free Trade Area from Cape to Cairo marked a turning point in regional integration in Africa. The Tripartite process is now a catalyst for the establishment of the Continental Free Trade Area by 2017.

The Tripartite FTA consisting of 26 countries, which is almost half the membership of the African Union has a combined population and Gross Domestic Product of 625 million people and US$1. 3 trillion respectively will constitute the single largest market. It is also worth noting that the combined gross domestic product of the Tripartite countries accounts for 62 percent of the continent’s Gross Domestic Product and that the Tripartite FTA will provide a basis for the structural transformation of the economies through Industrialization and value addition.

Your Excellencies, in my capacity as the Chairperson of the COMESA-EAC-SADC Tripartite Task Force of Chief Executive Officers and on behalf of my colleagues Dr. Stergomena Tax, Executive Secretary of the Southern African Development Community and Dr. Richard Sezibera, Secretary General of the East African Community, I am happy to report that after two and half years of intense negotiations, the COMESA-EAC-SADC Tripartite Sectoral Ministerial Committee held in Bujumbura, Burundi in October 2014 agreed that sufficient consensus had been reached to launch the Tripartite FTA. The Tripartite Summit of Heads of State and Government to be hosted by Egypt in Sharm El-Sheikh will now launch the Tripartite FTA Agreement on goods.

Economic Transformation

The COMESA Treaty and its protocols contains strategies and policies of what Member States should do at the national level and regional level implement programmes for the realization of economic transformation. Economic transformation involves rationalization of economic structures by moving human, financial and other resources from low to high value added economic activities. For example, economic transformation manifests itself within sectors both in labour intensive manufacturing to capital and technology intensive manufacturing and between sectors such as agriculture to labour intensive industrial activities. Some of the main prerequisites for social and economic transformation are macroeconomic and structural policies.

Industrialization and Competitiveness

The low levels of intra-COMESA trade which is 10 percent of total trade with the rest of the world is primarily due to lack of industrial diversification and product complementarity. It was against this background that you directed during your last Summit in Kinshasa, DR Congo that a common industrial policy be developed.

I am happy to report that the Secretariat working together with Member States has been able to implement your directive and come up with a common industrial policy. Among others, the common industrial policy recognizes that inclusive and sustainable Industrialization requires strategic collaboration between the public and private sector; national and regional value chains; local content policies; the need to establish institutions and processes that promote strategic collaboration between the government and the private sector to address market failure; the quality of the business environment and economic policy coordination at the national and regional levels. In addition, the successful implementation of the common industrial policy will require not only sound macroeconomic policies but also microeconomic policies.

Some of the lessons that have been learnt from the emerging industrializing economies is that there is a need to avoid a blue print approach, in other words a one size fits all approach to Industrialization. This is because Industrialization can be based on labour intensive industries, natural resources through value addition and diversification from low value to high value services.

Agricultural Development

I am happy to report that on agriculture development, COMESA Member States are implementing the African Union Comprehensive Africa Agriculture Development Programme, which has seen Fourteen (14) out of the Nineteen Member States signing CAADP national compacts. In addition, Eight (8) Member States have successfully designed and fully costed these National Agricultural Food, Security and Investment Plans and have been able to access funding of US$253 million from the Global Agriculture Food Security Programme and other sources. Despite the progress made, the region still spends $22 billion annually to import food. This underlines the need for Member States to embark on agricultural Modernization which is aimed at:

1. Generating demand for agricultural infrastructure (machinery and equipment);

2. Stimulating research and development institutions to assist in refining models of appropriate Agro industrialization programmes;

3. Freeing surplus unemployed industrial labour for active Industrialisation Programmes; and

4. Enhancing the domestic market for industrial products and potentially increasing export products to support and finance inputs required for agricultural transformation.

Infrastructure and Energy

In recent years, the region had witnessed the implementation of infrastructure and energy projects, thanks to the substantial funding from the African Development Bank, other multilateral financial institutions and from cooperation and development partners. However, the largest amount of funding has been as a result of the innovative mobilisation of funding by Member States through infrastructure and diaspora bonds that have been issued at national, regional and international levels.

It is estimated that in the past twenty four months about US$16 billion has been mobilized for infrastructure and energy projects by Member States. The bulk of this funding from bonds has been in Egypt for the new Suez Canal, which raised US $9 billion within nine days for a bond initially floated for thirty days and Ethiopia for $4 billion for the 6000 megawatt Renaissance Dam which is funded from domestic market and the diaspora bond. It is interesting that in the case of the Ethiopian hydro power project, other countries in the region have been invited to take shares in the project.

These few examples among many, demonstrate that the region has come of age and that gone are the days when successful implementation of mega infrastructure projects could only be realized when the global financial markets considered the projects viable on the basis of their policies and qualifying criteria.

COMESA Financial Institutions

In my earlier remarks I did mention that COMESA is unique in that it has autonomous financial and non- financial institutions that support regional integration. In this regard, the COMESA financial institutions, namely the PTA Bank, the Africa Trade Insurance Agency, the COMESA Clearing House and the PTA Reinsurance Company with a combined asset base of more than $3.2 billion have significant financial power which has facilitated billions of investments in trade and project financing. It is interesting to note that these financial institutions work in a complementary manner in addressing the requirements of the private sector and that they have also been able to intervene in Member States where there has been market failure.

In addition to the financial institutions, COMESA has established the COMESA Competition Commission which is assisting Member States in the financing of national competition programmes and capacity building. Since it started operating on 17th February 2013, the Commission has made assessments of Sixty Six (66) mergers and acquisitions which have taken place in the Common Market with a total transaction value of $58 billion. This demonstrates that the private sector both from within and outside the region is active in investing in manufacturing and services sectors.

Some of these institutions established by COMESA are now Pan African Institutions in that they provide services to the entire African continent and beyond. In the case of the Africa Trade Insurance Agency, which provides credit and political risk insurance, the Fifteen (15) Member States of the Economic Community of the West African States have agreed and are in the process of taking up membership in ATI. In the case of the PTA reinsurance Company, 60 percent of the reinsurance businesses they underwrite is from COMESA Member States and the rest from Africa and Asia, such as Nepal.

The following COMESA institutions provide technical and advisory services to both Government and private sector: Regional Investment Agency, FEMCOM, COMESA Leather And Leather Products Institute, COMESA Business Council, COMESA Monetary Institute, the East African Power Pool, the Alliance for Commodity Trade in Eastern and Southern Africa and the Council of Bureau on the Yellow Card.

I once again wish to register my profound appreciation to Your Excellencies for affording me the opportunity to lead this Regional Organization whose origins dates back to 1978 when the Lusaka Declaration of Intent on the Establishment of Preferential Trade Area for Eastern and Southern African States (PTA) was signed by Ministers of Economic Planning and Trade.

Over the years you have given counsel and strong leadership which has seen your Organization grow into a dynamic and results oriented institution as I serve my few remaining years,

I wish to reiterate that I will with your collective guidance continue to work tirelessly towards the realization of the noble ideals and objectives of the Common Market.

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