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COMESA Seeks Solutions to Digital Free Trade Area

by Daniel Sabiiti
11:39 am

Comesa connect industry dialogue

Implementation of the much anticipated Digital Free Trade Area (DFTA) in central-Eastern Africa bloc will have to wait until member states agree on harmonization of policies.

A project of Common Market for Eastern and Southern Africa (COMESA), the DFTA was supposed to come into full force this year, but officials say that it cannot be implemented before harmonization of products and pricing issues are solved.

“We have a lot of information on this digital platform (clusters) but we really need to harmonize this and have all the information from the 19 countries of Comesa,” Said Dr. Amany Asfour Chairperson of the COMESA Business Council, CBC Board Chairperson.

According to Asfour, failure to harmonize this digital information was noticed in several sectors, including the pharmaceutical cluster where registration process takes more time in a foreign country.

Modelled along the Malaysian Free Trade Zone, where party transaction are connected in real time through a web of ledgers that are secure, the platform could save Africa $450 million in clearance documentation once the bloc adopts block chain technology for clearing imports.

The DFTA is supposed to consist of a number of digital instruments to support trade in COMESA, including an electronic certificate of origin, underpinned by block chain technology, and a mobile application for cross-border traders.

In this way, the digital free trade area can be considered more of a trade facilitation device.

Apparently some countries like Rwanda have already kick-started the process of building the platform, for example issuance of electronic certificate of origin.

Comesa Regional private sector player are now meeting in a two day COMESA CONNECT Industry Dialogue held in Kigali starting this Thursday to discuss a way forward.

The Rwanda Private Sector Federation (PSF) said that there is need to push forward the trade agenda to ease doing business.

The COMESA region carries a large market of the African continent, with a population of more than 503 million consumers and total trade of $236 billion in 2016.

The recent signature of the TFTA Agreement between COMESA, EAC, and SADC provides for even a greater market opportunity with an estimate of even 630 million consumers.

“Services contribute to about 40% of the GDP of most COMESA member states but the contribution of exportable services remains very low and the potential of the sector remains largely untapped,” said Robert Bafakulera, the chairman of PSF.

Stephen Ruzibiza, the CEO of PSF also advised that three things have to be put in place to enhance business connectivity and Africa trade – starting with infrastructure, skills and human capacities development, technologies and buying.

Comesa member states agree that the technology and specifically block chain data trends cannot be avoided in integration of bloc trade.

In order to give a boost to this process, Microsoft Inc has announced plans of constructing two mega data centers in South Africa- the first of its kind on the continent and 40th globally.

“We are planning to set up the data centers (for enterprises and governments) by the end of this year as part of Microsoft global fabric. They will be available to customers across Africa and this is our first investment to offer entrepreneur core services,” said Mike Yeh, the Assistant General Counsel, Microsoft-Middle East & Africa.

With funding of startups across the region and signing a major partnership with the Africa development Bank recently, Microsoft also intends to continue support the Comesa region in funding Startups.

One of the success startups, SunCulture – in Kenya, which provides $500 solar powered irrigation pumps for agriculture transformation, now plans to expand to Rwanda and Uganda after five years of operation with Kenyan farmers.

“This is the cheapest irrigation and with the solar battery we are looking at entering the Rwandan market which has good agriculture policies and practices in the region,” said Samir Ibrahim, the CEO and Co-founder of SunCulture.

Rwanda has introduced the SMART Rwanda strategy 2015-2020 which underpins government transformation agenda using ICTs to ensure SMART Agriculture, Finance, Business & Industry, Health, Education, Government, and Cities.