Xinhua, Gaborone :
Botswana’s experts have lauded the recently signed Tripartite Free Trade Area (TFTA) agreement, while barriers are still remain.
Signed in Egyp’s Red Sea resort town of Sharm el-Sheikh on Wednesday, the largest free trade area on the continent covers 25 African nations and is dubbed the “Cape to Cairo” trade agreement. The former colonial master’s agent, Cecil John Rhodes in the 1800s embarked on a dream of conquest in which he sought to control Africa, from Cape to Cairo with a railway linking the Cape colony in South Africa to Cairo in Egypt.
The TFTA pact encompasses member states from Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa).
Covering a combined population of 625 million people and a gross domestic product (GDP) of 1.2 trillion U.S. dollars, the area will account for half the membership of the African Union and 58 percent of the continent’s GDP.
Botswana economist Keith Jefferies told Xinhua there will be more markets for Botswana goods and more sources of quality good.
Statistics from Central Statistics Office of Botswana showed South Africa is Botswana’s largest source of imports.
For exports, Belgium, India and South Africa are among major destinations.
The diamond-rich Botswana has long been dependent on mining sector. The International Monetary Fund (IMF) said last year Botswana’s overall external stability is affected by the lack of export diversification, which leaves Botswana’s economy vulnerable to fluctuations in the international demand for diamonds.
The heavy blow on Botswana’s diamond exports following the 2008 global financial crisis has compelled the country to step up measures on economy diversification. The government has vowed to push forward economy diversification to promote growth of non- diamond sectors.
SADC’s economic integration is a welcome move which will benefit Botswana economically, Ernest Mpofu, International Relations Secretary from the opposition party Botswana Congress Party (BCP) told Xinhua.
“As Africans, we have always cooperated politically but little had been happening in terms of economic cooperation. As a political party, we laud our government for being part of such a historic era for Africa,” Mpofu said.
Mpofu said it was high time African economies heavily depended on each other. He urged national policy makers to shun increased western ties. “Our economies are more linked to the west than to each other within our continent,” Mpofu said. “Now we have taken a majority position as a continent that will see greater development coming to our people on the continent.”
While the TFTA pact is a noble idea, Jefferies pointed out there will remain some non-tariff barriers to free trade in Africa.
“What often happens is that while a free trade agreement reduces tariffs, there will often be an increase in non-tariff barriers,” Jefferies said.
“For example, if a pharmacist in Botswana wants to import medicines from South Africa, there has to be an approval first from local authorities, not to mention associated regulatory standards. So trade is still restricted by non-tariff barriers.”
Protectionism will continue to hamper trade, even when a free trade agreement exists, according to him. “Member countries of the TFTA will always seek special treatment and will not allow trade liberalism, so that is a problem,” he said.
He gave an example that the poultry and chicken industry is protected in Botswana, and it is not allowed to import chicken. It is still not likely the country can now import chicken.
The TFTA will be the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017.
Botswana’s experts have lauded the recently signed Tripartite Free Trade Area (TFTA) agreement, while barriers are still remain.
Signed in Egyp’s Red Sea resort town of Sharm el-Sheikh on Wednesday, the largest free trade area on the continent covers 25 African nations and is dubbed the “Cape to Cairo” trade agreement. The former colonial master’s agent, Cecil John Rhodes in the 1800s embarked on a dream of conquest in which he sought to control Africa, from Cape to Cairo with a railway linking the Cape colony in South Africa to Cairo in Egypt.
The TFTA pact encompasses member states from Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa).
Covering a combined population of 625 million people and a gross domestic product (GDP) of 1.2 trillion U.S. dollars, the area will account for half the membership of the African Union and 58 percent of the continent’s GDP.
Botswana economist Keith Jefferies told Xinhua there will be more markets for Botswana goods and more sources of quality good.
Statistics from Central Statistics Office of Botswana showed South Africa is Botswana’s largest source of imports.
For exports, Belgium, India and South Africa are among major destinations.
The diamond-rich Botswana has long been dependent on mining sector. The International Monetary Fund (IMF) said last year Botswana’s overall external stability is affected by the lack of export diversification, which leaves Botswana’s economy vulnerable to fluctuations in the international demand for diamonds.
The heavy blow on Botswana’s diamond exports following the 2008 global financial crisis has compelled the country to step up measures on economy diversification. The government has vowed to push forward economy diversification to promote growth of non- diamond sectors.
SADC’s economic integration is a welcome move which will benefit Botswana economically, Ernest Mpofu, International Relations Secretary from the opposition party Botswana Congress Party (BCP) told Xinhua.
“As Africans, we have always cooperated politically but little had been happening in terms of economic cooperation. As a political party, we laud our government for being part of such a historic era for Africa,” Mpofu said.
Mpofu said it was high time African economies heavily depended on each other. He urged national policy makers to shun increased western ties. “Our economies are more linked to the west than to each other within our continent,” Mpofu said. “Now we have taken a majority position as a continent that will see greater development coming to our people on the continent.”
While the TFTA pact is a noble idea, Jefferies pointed out there will remain some non-tariff barriers to free trade in Africa.
“What often happens is that while a free trade agreement reduces tariffs, there will often be an increase in non-tariff barriers,” Jefferies said.
“For example, if a pharmacist in Botswana wants to import medicines from South Africa, there has to be an approval first from local authorities, not to mention associated regulatory standards. So trade is still restricted by non-tariff barriers.”
Protectionism will continue to hamper trade, even when a free trade agreement exists, according to him. “Member countries of the TFTA will always seek special treatment and will not allow trade liberalism, so that is a problem,” he said.
He gave an example that the poultry and chicken industry is protected in Botswana, and it is not allowed to import chicken. It is still not likely the country can now import chicken.
The TFTA will be the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017.
