Free Trade Area Pegged on Digitalization

Nairobi: Successful implementation of the Tripartite Free Trade Area (TFTA) will be underpinned by the adoption and use of digital technologies among countries in the COMESA, EAC and SADC regional economic communities.

An assessment conducted by Malawian researchers on the readiness of the TFTA in adopting a Digital Free Trade Area (DFTA) found that the use of digital instruments provides the best opportunity to deepen integration by significantly reducing trade barriers and thereby enhancing intra-regional trade in TFTA.

In the research paper presented at the 5th COMESA Annual Research Forum underway in Nairobi, researchers Frank Kalizinje and Michael Masiya of the Malawi Revenue Authority observed that the usage of digital instruments in the TFTA was an indispensable prerequisite into the eventual formulation of the Digital Free Trade Area (DFTA).

In their research paper titled: Digital Free Trade Area: Challenges and Prospects for Africa’s Tripartite Free Trade Agreement, the two acknowledged COMESA for setting the pace by rolling out of the first ever DFTA in Africa in 2018.

Since COMESA is already on a path to a DTFA, this should be supported by other regional blocs and they should also draw strategies to follow suit, they said. This is because the overlapping membership of members of the three RECs means that over 75% of the member states will have adopted COMESA digital instruments.

The researchers recommended to the other RECs (EAC and SADC) to come up with strategies and systems that are interoperable with that of COMESA.

As RECs prepare to join the Digital TFTA, they should work at boosting the Gross Domestic Product through industry and increasing Agriculture value addition. These will be key in boosting ICT uptake in the medium to long term, they said.

According to the researchers, Africa’s large pool of a youthful population, much of which has a high appetite for internet usage, provides the best opportunity to nurture innovation.

It is therefore imperative that national and regional policies aimed at formulating the DTFTA should capitalize on the demographic dividend by instituting deliberate policies to nurture innovation championed by the youths, they said.

The researchers further recommended the development of an operational framework to govern competition and enhance innovation so that industrial development is sustained.

They noted: This will not only ensure that the digital divide is minimized and that the DTFTA is inclusive but will most importantly enhance ICT uptake by the populations in the three RECs.

The TFTA brings together a total 29 countries with a combined GDP of over US$1.4 trillion and a combined population of about 700 million people. Since its launching in June 2015, a total of 23 countries have signed it but only three have ratified against a minimum threshold of 14 to enable it to come into force.

The COMESA Annual Research Forum provides a platform to directly support regional integration by addressing practical challenges.

The theme of the current Forum is: ‘Harnessing the Demographic Dividend for Social Economic Transformation and Deep Regional Integration in COMESA through Academia-Industry Linkages’.

The theme focuses on the Digital Economy in the context of the Tripartite and African Continental Free Trade Areas.

Source: Malawi News Agency MANA