Free trade area and political developments dominate summit

The main agenda items of this year's Summit are two: (i) the launch of the Free Trade Area, and (ii) the current political situation in the region. However, Summit will also deliberate on other matters pertaining to SADC integration agenda, as usual.

The Summit will run from August 16-17, 2008. As usual, Summit was preceded by several meetings, starting with the Finance Sub-committee meeting which began on August 09 followed by the Standing Committee of Senior Officials meeting from August 10 to 11.

The Finance Committee and the Senior Officials of the Regional Economic Integration Task Force met on August 11 and 12, while August 13 was set aside for the Ministerial Task Force on Regional Economic Integration. The Council of Ministers met from August 14 to 15.

On political developments

As you all aware, although relatively calm, some of our Member States are currently facing some challenges in the areas of democracy, peace and security, namely the DRC, Lesotho, Malawi, South Africa and Zimbabwe.

Democratic Republic of Congo (DRC)

Since the signing of the peace deal on January 23, 2008, the political and security situation in the DRC remained calm.

The implementation of the Nairobi Agreement is bearing positive results, with about 850 Rwandese having been repatriated from the DRC to their country.

The regrouping process of the 2000 Rwandese who should have been repatriated in June 2008 is ongoing. Consultations have taken place between the DRC and Uganda, hosted by the United Republic of Tanzania on the need to curtail actions of the Lord Resistance Army (LRA).

On the other hand, the security reform is progressing with the support of SADC, most notably through Angola and South Africa.

Lesotho

As you might know, following disagreements that emerged from the electoral process of 2007 in Lesotho SADC appointed Sir Ketumile Masire, the former President of Botswana as the Eminent Person to facilitate political dialogue among the parties. Sir Massire's facilitation efforts have yielded fruits complemented by efforts undertaken by national political stakeholders towards resolving the political challenges facing the country.

SADC will continue to encourage Sir Ketumile Masire's Mission until a balance is reached on the differences amongst the political stakeholders in Lesotho.

Following the pronouncement by the Lesotho High Court on the matter during the first week of July, Sir Ketumile Masire is expected to submit a report on the way forward to the Chairperson of the Organ.

Malawi

The Ministerial Troika undertook an assessment mission to Malawi from June 16 to 18 2008 which found that that Malawi is facing political challenges resulting from misinterpretations of section 65 of the Constitution which stipulates that Members of Parliament elected on political party lists lose their seats if they cross to another party.

The Malawi Parliament was suspended on June 20, 2008 and as a result could not discuss or pass the national budget and as such Malawi will not be able to full participate in the SADC Free Trade Area.

The political situation remains stable and the local mediation process is ongoing with a draft Memorandum of Understanding (MOU) is being considered by Government and opposition parties.

South Africa

Following violent attacks on foreign nationals and local citizens in South Africa, the Government of the Republic of South Africa has taken a number of measures to address the situation, which is currently relatively normal.

In this regard, SADC has developed a regional approach to xenophobia and immigration in general in order to prevent such situations from recurring and to stop the spread of such to other countries in the region.

Zimbabwe

Zimbabwe held Harmonised Elections for the Presidential, Senatorial, House of Assembly and Local Government on March 29, 2008, which did not provide an outright Presidential winner. A presidential run-off election was thus held on June 27, 2008.

Due to politically motivated violence which preceded this election as well as the withdrawal of the leader of MDC-T the run-off exercise did not produce a conclusive outcome.

More recently SADC efforts through its facilitator, President Thabo Mbeki of South Africa saw the main political parties in Zimbabwe, ZANU-PF, MDC-T and MDC sign a Memorandum of Understanding on resolving the political situation in that country. Negotiations are underway to chart out the future of Zimbabwe.

We are, however, hopeful that these challenges will be overcome through dialogue and constructive engagement.

Economic Development

Updates provided by Member States in February 2008 indicate that economic performance in the SADC region was satisfactory in 2007 and prospects for 2008 are generally good. Economic growth as indicated by growth in real GDP remained strong while inflation continued to decelerate.

The majority of Member States recorded improvements in fiscal performance as indicated by declining fiscal deficits. This was on the back of prudent fiscal policies and the HIPC initiative to which a number of Member States are benefiting.

The region's debt position has improved substantially largely on account of a number of Member States benefiting from the HIPC initiative. However, the current accounts of the balance of payments deteriorated in 2007 due to rising imports despite reasonable increases in exports.

Considerable progress has been made in attaining reasonable levels of economic growth in the region. Most countries have recorded positive growth for five consecutive years. Substantial economic growth was recorded in Angola, 19.8 per cent; followed by Malawi, Mozambique and Tanzania, which recorded real GDP growth rates in the region of 7 per cent.

However, the level attained in economic growth falls short of the regional target of real GDP growth set at 7.0 per cent for 2008. Real GDP increased on average by 5.9 per cent in 2007, virtually the same growth rate that was attained in 2006.

SADC Free Trade Area

Having completed the critical tasks of the SADC Trade Protocol, the SADC FTA was launched during the Summit yesterday under the theme: "SADC Free Trade Area for Growth, Development and Wealth Creation".

The launching of the SADC FTA marks a major milestone in the implementation of the Regional Indicative Strategic Development Plan (RISDP).

Based on the implementation of the agreed tariff phase down commitments, SADC attained the Free Trade Area as of January 2008.

In accordance with the SADC principle of Variable Geometry, the SADC FTA shall be launched as schedule, although three of its Member States, namely Angola, DRC and Malawi are still addressing challenges facing them in the implementing the Protocol on Trade.

In this regard, Malawi will be considering further tariff reductions in terms of its Protocol on Trade commitments during the 2008/09 national budget and will report progress by August 2008.

Angola's offer is technically ready and will be considered by Cabinet before presentation to SADC by August 2008, while DRC is still working towards partaking of the FTA.

Power availability in the region

According to projections by the Southern African Power Pool (SAPP), power deficits would persist between 2008 and 2012. During this period, projects aimed at providing additional power to the region amounting to 6550 Mega Watts shall be implemented and commissioned at a cost of US$5 billion.

In this regard, long term projects will be implemented between 2008 and 2025 to provide additional power amounting to 44 000 Mega Watts, at a cost of US$41.5 billion.

Hidroelectrica de Cahora Bassa (HCB) has commissioned an additional unit that shall supply 400 Mega Watts, of which 100 Mega Watts shall be consumed in Mozambique and the balance of 300 Mega Watts shall be made available to the region on a non committal basis.

Some generation units under rehabilitation in Botswana, DRC, South Africa, Zambia and Zimbabwe will provide additional power amounting to 1 700 Mega Watts during 2008/09 financial year.

Given the challenge of power shortages, against a backdrop of non availability of additional power, optimisation of energy has to be implemented as a matter of necessity. To this end, the region is implementing the following measures:

A 10 percent reduction in consumption through rationing, power-buy-back arrangements and penalties, based on the Southern African Power Pool, Regional Electricity Regulatory Association and Electricity Supply Commission of South Africa (ESKOM) experiences learned from utility producers/suppliers in California, USA.

ESKOM has also adopted a power conservation model following lessons that it learnt from Brazil and it has already started paying off where it has been implemented.

ESKOM has however committed itself to continue supplying power to other SADC Member States, in line with its existing commitments. ESKOM shall, however, reduce its commitments to the region by 10 percent in line with its programme of reducing power to consumers in South Africa by the same margin.

Based on the experiences of the SAPP, the Regional Electricity Regulators Association (RERA) and ESKOM and experiences of other Member States, a regional harmonised framework on Power Conservation Programme has been developed for implementation across the region. It is currently coordinated by the SAPP.

Social development

The region has recorded significant progress and positive developments in the core areas of social and human development, namely, health, education, training, labour, employment, science, technology and innovation.

In the area of health, positive results were recorded in combating major communicable diseases especially HIV and AIDS, Malaria and Tuberculosis. Measures were put in place to increase access to preventive and curative services. Consequently, prevalence and incidence rates for HIV and AIDS and Malaria declined in certain population categories and some parts of the region.

For instance, there was a decline in both prevalence and incidence of HIV especially among the youth aged 15 to 24 years and pregnant women attending ante-natal clinic.

Furthermore, a 90 percent reduction of malaria incidence was recorded in countries in the Lubombo Spatial Development Initiative where malaria cross border control initiatives are being implemented.

These emerging positive indicators are due to improvements and strengthening of health systems in Member States.

In education, the region continues to record increased enrolments in primary education and gender parity index. Member States are focusing on improving the quality of education at all levels as well as making reforms to increase post-primary provision.

In addition, Member States are undertaking reforms in Technical and Vocational Education and Training (TVET) to improve its relevance to the labour market and economic needs.

Regarding Employment and Labour, the region continued to record positive developments, particularly, in combating poverty and promoting social protection. In this regard, measures have been put in place to coordinate and monitor the implementation of the Ouagadougou Declaration and Plan of Action on Employment Creation and Poverty Alleviation in Africa.

Gender development

In this area, guidelines for Member States' national consultations and a roadmap towards the 28th Summit were was developed and circulated to Member States in January 2008.

As per this roadmap, the Ministers responsible for gender/women's affairs met on April 30, 2008 in Windhoek, Namibia to consolidate inputs from Member States' national consultations. The Ministers unanimously adopted and recommended the Draft SADC Protocol on Gender and Development for consideration by the Committee of Ministers of Justice/Attorneys-General at their meeting held on June 27, 2008 in Lusaka, Zambia.

In turn, the Committee of Ministers of Justice/Attorneys-General considered the draft SADC Protocol and recommended it to Council for consideration and approval during its meeting of August 2008, and submission to Summit in August for signature. — -Sadc Secretariat,