DR Congo, Malawi Move to End Trade Barriers

The Democratic Republic of Congo (DRC) and Malawi have taken a step closer to putting into place measures to formalize informal cross border trade (ICBT), the regional trade block says.

Both countries held stakeholders meetings in their respective countries to move forward the Common Market for Eastern and Southern Africa (COMESA) Simplified Trade Regime (COMESASTR), that the 20-member block believes is a sign that there is progress on its plan to harmonise trade.

The Simplified Trade Regime entails putting in place simplified documentation, systems and procedures to enable small traders ply their wares across borders throughout COMESA without hindrance.

More importantly, the traders will not be required to pay customs duties for COMESA originating goods of both an agricultural and industrial nature which will be defined in the Common List under the simplified regime.

The idea, according to the block secretariat in its newsletter, is to facilitate rather than frustrate trade and to move towards formalization of Informal Cross Border Trade into the mainstream of formal COMESA trade.

The trade block has identified ten pilot countries to be involved in the pilot phase of the STR whose implementation is scheduled to commence in early 2008. The countries are Burundi, Democratic Republic of Congo (DRC), Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia and Zimbabwe.

Currently, preparatory work, such as putting in place the necessary institutional framework at the national level to facilitate expedited implementation of this regime is underway.

The institutional framework entails establishing National Working Groups (NWGs) to bring together key government agencies such as Ministries of Trade, Ministries of Agriculture (responsible for plant and animal health control), Departments of Customs and organizations representing the small traders.

The working group for DRC was launched in Kinshasa on December 4. Malawi for its part launched the working group December 11.

During 2006/2007 intra-COMESA trade is reported to have grown to 7.5 billion dollars from about US$2.3 billion when the Free Trade Area (FTA) commenced in 2000. It is estimated that these figures would be much higher perhaps as much as an additional one third of the current value of total intra-COMESA trade if ICBT taking place across the many international borders of the 19 countries of COMESA was properly recorded.

Additionally, studies such as those carried out by the COMESA programme on Gender and Women in Business show that the majority of players in crossborder trade are women, the youth and other marginalized populations groups.

This trade not only empowers them economically, but also contributes to the growth of the COMESA economy as such trade stimulates production.