SMEs, local traders fear for TFTA
The National Working Group on Trade and Policy says Malawi needs to scrutinise the Tripartite Free Trade Area (TFTA) protocol and review her position before the country rectifies the pact.
The group’s chairperson Frederick Changaya said on Wednesday that premature opening up of borders can have disastrous results of de-industrialisation which leads to falling employment and wages; hence, poverty.
Said Changaya: “We are still poor. Our economic activities are subject to diminishing returns. We subsidise agriculture with diminishing returns and have commercial banks that are dominant against the productive sectors, this is a recipe for low wages and low employment hence poverty.
“Growth history will tell you the toolbox for development. And it is not infrastructure only as recent governments want us to believe. It’s much more than roads. In fact too much roads without economic activities or with activities that have less value as is case now means that our development capital benefits imports which is GNP for other countries whose imports we consume,” he said.
Information sourced from the Common Market for East and Central Africa (Comesa) indicate that 24 of the 27 member States have signed the declaration; only Libya, Eritrea and South Sudan have yet to sign.
The TFTA Agreement has been signed by 22 member countries, namely Angola, Botswana (signed on 30 January 2018), Burundi, Comoros, Democratic Republic of Congo (DRC), Djibouti, Egypt, Kenya, State of Libya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Tanzania, Uganda, South Africa, Swaziland, Zambia and Zimbabwe.
The Agreement requires 14 ratifications to enter into force. So far, four countries have both signed and ratified the Agreement: Kenya, Egypt, Uganda, and most recently, South Africa.
A press statement released on Tuesday by the Common Market for Southern and Central Africa indicated that the deadline set by the Tripartite Council of Ministers for member States of three regional economic blocs to sign and ratify the tripartite free trade area lapses this month with only four countries in Comesa, East Africa Community and Southern Africa Development Community (Sadc) tripartite bloc have signed and ratified the agreement. These are Kenya, Egypt, South Africa and Uganda.
Currently, 93 percent of the work on Rules of Origin has been completed, providing the basis for trade to begin. In addition, the legal texts have been concluded and adopted.
Minister of Industry, Trade and Tourism Francis Kasaila said in an interview that Malawi was yet to ratify the trade pact as government was working on finalising some processes that will facilitate ratification.
Earlier, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira said chances are local firms could lose out as has been the case with trade performance with other regional blocs.
The TFTA was launched in June 2015 by the Third Tripartite Summit of Heads of State and Government after more than three years of intense negotiations. It is anchored on three pillars, namely market integration, industrial development and infrastructure development.
The TFTA was established following the coming together of States from the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC) and the Southern African Development Community (Sadc) to remove duplication and overlaps by other countries such as Malawi, Zambia, Zimbabwe, Mauritius, Seychelles, Comoros, Madagascar and EAC.
The TFTA has a population of 600 million people and gross domestic product of $1.2 trillion.
