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Tuesday, 31 October, 2000, 11:58 GMT
United States of Southern Africa?
By BBC News Online's Justin Pearce

The Southern African free trade zone has been hailed as one of the most significant steps taken by the Southern African Development Community (SADC) in its 20-year history.

The scheme came into effect on 1 September, and aims eventually to create a single market involving 200 million people living in 14 countries.

Initial participants will be South Africa, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania and Zimbabwe.

Zambia is expected to confirm its membership soon.

War-torn Angola and the Democratic Republic of Congo, and the geographically remote Seychelles, will not be joining yet.

The zone is designed to

  • lower tariffs on internal trade to under 18% from September 2000
  • complete elimination of tariffs to follow
  • increase trade among members to 35% of all trade by 2004 (currently 25%)
  • build on the region's current internal trade worth about $7.2bn
  • facilitate foreign trade with the region as a whole
  • liberalise 85% of trade within the zone by 2008
  • liberalise the remaining 15% - "sensitive products" such as arms and ammunition and automotive products - by 2012
But the breadth and diversity of the proposed economic zone also put obstacles in the way of a market that functions to the benefit of all its member countries.

South African giant

South Africa's gross domestic product of nearly $150bn is three times that of the other 13 SADC members put together.

Johannesburg street
South Africa produces far more wealth than its neighbours
Recent plans to revive the East African Community - involving Kenya, Tanzania, and Uganda - were watered down at the request of Tanzania and Uganda.

These two countries feared a flood of imports from their more industrialised neighbour, which would have undermined their own attempts to develop manufacturing.

Since the end of apartheid, South Africa has already benefited from new-found export markets north of the Limpopo - witness the cans of Castle lager that appeared in bars as far away as Zanzibar during the 1990s.

A free trade agreement is bound to hasten this process.

Exemptions

Only one concession has been made to tame South Africa's economic might: SADC's four poorest countries - Mozambique, Tanzania, Malawi and Zambia - are to be partially exempted for the first five years on tariffs covering clothing and textiles.

Nkosazana Zuma
Zuma: Single currency unlikely at the moment
But SADC officials are confident implementation of the trade protocol will encourage the development of manufacturing in all the SADC countries.

Regional integration schemes have been welcomed as a more practical alternative to the pan-African unity scheme put forward by Libya's Muammar Gaddafi at the recent OAU summit in Lome.

In addition to the Southern and East African initiatives, a number of English-speaking countries in West Africa recently announced plans to move towards monetary union.

The Francophone countries of West Africa have shared a currency ever since independence.

Single currency?

The Southern African union will build on the exisiting South African Customs Union, which links South Africa, Botswana, Lesotho, Namibia and Swaziland in a tariff-free trade zone.

All these countries - except Botswana - have currencies at parity with the South African rand.

A single currency for the entire zone remains a longer-term possibility.

South African Foreign Minister Nkosazana Dlamini-Zuma said monetary union would "depend on the level of integration."

She remarked that the European Union had taken more than 40 years from its foundation to the formation of the euro.

See also:

11 Jul 00 | Africa
United States of Africa?
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