FTA Series – Part 3: What you need to know about the COMESA Digital Free Trade Area

  • 2 Oct 2020
  • 2 Mins Read
  • 〜 by Abigael Ndanu

COMESA is the Common Market for Eastern and Southern Africa. In 2018, they agreed to establish a Digital Free Trade Area (DFTA). The initiative that upon inception was expected to create a $17.2 billion-worth market for member states is an online platform for trade facilitation comprising three segments namely electronic trade (e-trade,) e-logistics, and e-legislation. 

The e-trade aims at promoting electronic commerce by providing a platform for traders in the COMESA bloc to conduct business online.

The e-logistics segment uses ICT as a tool to improve transportation of goods to customers.

The e-legislation segment looks at the preparedness of countries to put in place laws that enable them to carry out e-transactions and e-payments.

As of June 2020, 15 COMESA Member States were ready to start piloting the COMESA Electronic Certificate of Origin (eCO) System. The countries are Burundi, DR Congo, Egypt, Eswatini, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Tunisia, Zambia and Zimbabwe.

The need to start implementing the eCo system has gained urgency amog countires due to the challenges that movement of goods across borders is facing as a result of restrictive measures put in place in response to the Coronavirus pandemic. The eCO will replace the manual certificates and help to circumvent the onerous manual process.

Certificates of Origin are issued to exporters within the COMESA Free Trade Area (FTA) to confer preferential treatment to goods originating from an FTA member State. The uptake of the electronic certificate has not gained traction among Member States in the past for lack of the necessary regulations under the COMESA Rules of Origin (RoO).[1]

The decision to adopt the eCO was made by the Council of Ministers in 2014 to replace the manual certificate. The objective was to facilitate intra-regional trade through reduction in the costs and time required in registration, application and submission of certificates and the post-verification of originating goods. In November 2019, the 40th Meeting of the Council of Ministers adopted the draft regulations to implement the COMESA eCO system.

A Technical Working Group (TWG) on Rules of Origin was later on tasked to review the Rules to facilitate implementation of the COMESA eCO and other trade facilitation instruments.

Despite these wonderful pans, COMESA faces two critical challenges: 

  1. The COVID-19 pandemic, which has tremendously affected how business is being conducted across the world is threatening to reverse the gains already made in fostering a liberalized trade regime. 
  2. The value of intra-COMESA trade has remained stagnant and does not mirror the instruments put in place, especially under the FTA trade regime adopted way back in 2000.

These two challenges will continue to affect how business is conducted by COMESA members and no technology can solve them. The solution lies in the Treaty reform and countries finding way to bounce back after COVID -19.

[1] https://www.comesa.int/over-10-member-states-ready-to-pilot-the-comesa-electronic-certificate-of-origin/