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An analysis of the SADC Free Trade Area

Trade Briefs

An analysis of the SADC Free Trade Area

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The Southern African Development Community (SADC) Free Trade Agreement (FTA) has been entering into force over a period of time. It was originally set to become fully operational by 2008, and it has progressively become more of a reality since around that time.

Trade data for the region and Africa is notoriously unreliable and difficult to obtain, and this has consequently made the current exercise of gleaning trade and tariff data to assess the SADC FTA difficult and frustratingly incomplete. We have used the International Trade Commission (ITC) data for their most recent 2010 trade as the source of data, augmented by World Trade Organisation (WTO) and SACU overall trade figures. Even this data is incomplete and not necessarily consistent with other data. However, we are able to confirm the commonly accepted position that intra-SADC trade is low (and not necessarily increasing) and that South African trade dominates both the overall SADC and intra-SADC trade. In particular, South African exports were 68.1% of intra-SADC exports for 2010, our base year, but a significantly lower 14.8% of intra-SADC imports as Angola, with 31% of regional global exports, only contributes some 5.8% of the intra-SADC exports (and much lower import shares). It makes a big difference if Angola and the DRC are included in SADC trade analysis.

Overall, the FTA is making solid progress; much of that progress has been driven by SACU’s offer of largely tariff-free access to the other SADC member states. The fact that Angola, the DRC and Seychelles have not yet joined the FTA, and the exceptions from the tariff offers of many other members, means that this FTA still has quite some distance to travel.

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An analysis of the SADC Free Trade Area - Author(s): Ron Sandrey

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