Speech of Ambassador Mariani at the Signing ceremony of the FA of theTrade Facilitation and Small Scale Cross Border Trade programmes
Speech by H.E. Alessandro Mariani
Representative of the European Union to COMESA
Signing ceremony of the Trade Facilitation and Small Scale Cross Border Trade programmes Financing Agreements and
The Delegation Agreement for the support of Enhancing the Energy Market programme in the Eastern, Southern Africa and Indian Ocean region
Lusaka, 30th May 2017
Your Excellency Mr. Sindiso Ngwenya, Secretary General of COMESA,
Distinguished COMESA colleagues
Members of the press
Distinguished ladies and gentlemen
I am very pleased to be here with you today at the signing ceremony of three new highly relevant and important programmes for the COMESA region.
Regional economic integration is a process where barriers to trade are progressively eliminated to facilitate exchanges and trade between countries and regions. It is not only about trade in goods, but it also covers issues such as services, investment and labour. The elimination of tariff and non-tariff barriers to the flow of goods, services, and factors of production results in lower prices for distributors and consumers and increased productivity.
For citizens and businesses, the benefits of trade facilitation are well known. It promotes transparency, cuts red tape and stops a proliferation of unsuited requirements in export markets. It also attracts foreign direct investment (FDI) and contributes to create jobs.
Of course, regional integration is not easy. It is a dynamic process, which is not deprived of obstacles. The European Union was not made all at once. It is rather the result of a continuous process where the many challenges are tackled step by step, thanks to strong regional institutions and the commitment and solidarity of all Member States.
COMESA has, since its creation, been a driving force for ecoomic integration in Africa. It has recorded notable successes such as the continuous expansion of its Free Trade Area, the successful uptake of key trade facilitation instruments such as the Yellow Card insurance and Regional Customs Transit Guarantee schemes, as well as the recent launch (in June 2015) of the Tripartite Free Trade Area.
However, the overall picture still displays a substantial untapped potential: formal COMESA intra-regional trade remains low in relative terms (7% of total trade of the region); trade and transport costs in the region are among the highest in the world; Non-Tariff Barriers are still numerous while many agreed regional commitments are yet to be domesticated at national level.
So the question is: what can be done to accelerate the pace of integration in Africa and in particular in the COMESA region?
The answers are in your hands. But let me assure you, ladies and gentlemen, that the European Union, as the biggest trade and cooperating partner of COMESA, remains committed to continue sharing its own experiences and lessons learned and provide technical and financial support based on the regional priorities and the commitments from your Member States.
The Trade Facilitation (TF) Programme with a total budget of €53 M (equivalent to more than 541 million Kwacha) will upgrade five selected border posts (namely: Chirundu, Nakonde-Tunduma, Mwami-Mchinji, Galafi between Djibouti and Ethiopia and Moyale between Kenya and Ethiopia) in order to reduce time and costs of trade in these very important transport corridors. The Programme will equally support system developments to monitor Non-tariff Barriers in the region, improve Sanitary- and Phytosanitary (SPS) measures (for maize and milk products) and upgrade the Regional Metrology Infrastructure. Finally, it will support trade negotiations in order to connect the region in the world trade circle, and help to promote COMESA for investors through trade fairs.
The €15 M (equivalent to more than 153 million Kwacha) Small Scale Cross-border Trade programme is aiming at supporting small-scale traders who cross borders at selected border areas through, among other things, upgrading border small infrastructures as well as concrete measures to fight against corruption and harassment (incl. Gender Based Violence). The Programme will also strengthen the Cross Border Trade Associations in order to improve their capacities to support small scale trading.
Although trade is certainly an engine for economic growth, production of goods to be traded requires energy.
The region is endowed with great energy potential, especially from renewable energy sources, capable of powering up the entire continent becoming an energy export hub, but this potential remains largely underutilized. This is evident in the power deficits, the low levels of access to electricity estimated at 43% of the total region population, which dwindles to single digit in rural areas, and the very low use of other renewable energy sources apart from hydropower. In addition, countries in the region lose about 10 to 30% of its installed capacity through system losses on the demand and supply side.
Therefore, the 7M€ Regional Energy Programme aims at building an energy market that stimulates power trading and hence promotes energy security, as well as leverages on each countries strengths.
In partnering with COMESA and other regional economic organizations on this regional energy programme, we jointly recognize that the governance of the sector is crucial for addressing these challenges. Improving the regional energy market requires mechanisms that allow for transparent and well-regulated cross-border electricity trade. And the region has already a good platform to build on – the regional associations of energy regulators and the Southern and Eastern African Power Pools, whose experiences show that cross border trade optimises the use of available energy sources providing greater stability of supply for national utilities and lowering the cost of energy.
The new Energy Programme will further support the strengthening of the institutions that ensure competitive 'playing field' in the market as well as harmonized modus operandi for market actors. It also presents a great opportunity for quick win actions such as a region-wide energy efficiency campaign, including efficiency rating and labelling for appliances manufactured and imported into the region.
Needless to say that achieving the goals of the Energy Programme will require structural adjustments such as changes to the structure of the energy market at national level fostering competition and private sector investments.
I am glad that today we are proceeding with the signature of these programmes, which will be another milestone in our relations based on the Joint Africa-EU Strategy principles of ownership, partnership and solidarity. I wish to reiterate the strong commitment of the European Union to continue strengthening its collaboration with COMESA and its Member States in order to achieve the aspirations of the people in the region to accelerate inclusive economic growth and alleviate poverty.
Let me conclude by acknowledging the dedication and the excellent work that the COMESA team are doing for advancing the economic integration in the COMESA region.
We look forward to successful and well-coordinated implementation of these programmes under the 11th European Development Fund and our continued strong collaboration in the coming years.
I thank you