Comesa Custom Union Set for June 7

THE launch for the Common Market for Eastern and Southern Africa (COMESA) Custom Union is set for June 7, 2009 with more than US$ 100 billion set aside for compensation for revenue losses to member states.

Speaking at a media briefing held in Lusaka yesterday, COMESA secretary general, Sindiso Ngwenya said the summit will be held June 7 to 8 while the council of ministers will take place on June 2 to 4.

Mr Ngwenya said the US$ 100 billion is provision of compensation under COMESA fund. He said the summit will be held in Zimbabwe’s Victoria Falls town.

He said from the 19 COMESA countries, 14 countries are part of the free trade area that was launched in 2000. “Deepening of the regional integration is important for our market especially now that we are experiencing the worst global crisis,” he said. Uganda and Eritrea have reduced tariffs by 80 percent while Ethiopia was also reducing on its tariffs.

Mr Ngwenya said intra-COMESA trade has increased from US$ 3.2 billion recorded in 2000 to US$ 15.2 billion in 2008. He said to increase on trade, there is need to add value to primary commodity exported outside the COMESA region.

“After 2010, Governments within the region will not have to depend on trade tax for their revenue because tariffs are being lowered. Government will get more of their income from Pay-As-You-Earn and Value Added Tax,” he said.

Mr Ngwenya said the challenge faced by the region is to develop industries in rural areas that will add value to raw materials and create jobs. He said there was need to look at the broader economical benefits that will be accrued to the nations than complaining of the few industries that would be affected by the customs unions. He said if some sectors of the economy feel that the customs union will injure them, they can evoke COMESA safeguard measures to protect infant industries.

He said the COMESA regional and payment system will also be launched at the same meeting. The summit will also review progress by COMESA, Eastern Africa Community and Southern African Development Community on formation of a single customs union for the three blocks.