Regional Arrangements

SOUTHER AFRICAN DEVELOPMENT COMMUNITY (SADC)

The Southern African Development Community (SADC) was originally formed in 1980, as an alliance of nine majority-ruled States in Southern Africa known called the Southern African Development Coordination Conference (SADCC). The aim of its formation was that of coordinating development in order to ensure economic sustainable and equitable economic growth and diversification. Currently SADC has 16 member states; Angola, Botswana, Comoros, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia and Zimbabwe.

 SADC Free Trade Area (FTA)

The SADC Free Trade Area was launched on 17th August 2008, in Sandton, South Africa with a total membership of eleven (11) countries. Three member states, Seychelles, Angola and DR Congo are not currently implementing the SADC Trade Protocol. Member states have attained 85% liberalisation of tariff lines in 2008 whilst maximum tariff liberalisation was only attained by January 2012, when the tariff phase down process for sensitive products was completed.

SADC Rules of Origin

The SADC rules of origin state that a product can deemed to be of SADC origin if it meets the one of three criteria:  

• If it is wholly obtained/ produced in a SADC Member state; 
• If it has been produced in a Member State using non-originating materials, provided that such material have undergone sufficient working or process in one or more Member States; or  
• There has been a change in the tariff heading of a product arising from processing carried out on the non- origination materials.

 Annex I rule 2 of the SADC Protocol on Trade as regards to the Rules of Origin Regulations sets out the origin criteria on which goods are deemed to be of SADC origin. Goods which meet the criteria under Appendix I of Annex I of the SADC Protocol on Trade shall be accorded preferential SADC market access.

Such products shall be considered as originating in a member State if it has either been wholly produced or has been sufficiently worked or processed in that Member State. 

As such  the rules are used distinguish between goods that are produced within the SADC Member states and are entitled to preferential treatment and those that are considered to have been produced outside the SADC region that attract full import duties when traded.

COMMON MARKET FOR EAST AND SOUTHER AFRICA (COMESA)

 The Common Market for Eastern and Southern Africa (COMESA) is a regional     economic grouping made up of 19 Member States, with an estimated population of over 400 million and a combined GDP of over USD 345 billion. COMESA was established in 1994 to succeed the Preferential Trade Area (PTA) for Eastern and Southern Africa that had been in existence since 1981.

 COMESA Free Trade Area (FTA)

 In October 2000, COMESA member states launched the Free Trade Area (FTA) in   Lusaka, Zambia, making it the only FTA in Africa. COMESA has 21 member states, of which 13 are implementing the COMESA Free Trade Area (FTA). Countries in the COMESA FTA include Zambia, Mauritius, Egypt, Malawi, Zimbabwe, Djibouti, Sudan, Kenya, Libya, Madagascar, Rwanda, Seychelles, and Comoros. 

 COMESA Simplified Trade Regime

The COMESA Simplified Trade Regime (STR) has been put in place to ensure that small traders, particularly Cross Boarder Traders are able to take full advantage of the benefits of integration within the COMESA region. Its aim is to formalise informal cross –border trade by putting in place instruments and mechanisms tailored to the trading requirements of small-scale traders that are decentralised to border areas where informal trade is prominent with the view to facilitate ease of market access by small traders. Zambia is implementing the STR with both Zimbabwe and Malawi. Furthermore, the traders stand to claim back the import VAT from customs should they get registered. The STR Trade regime is applicable when:

• The consignment is US$500 or less in value. Then trader has to use the simplified customs document and does not need to employ an agent.

• These goods will be duty free if the goods appear on the common list of products agreed between the countries and displayed at the border post. The trader may obtain a simplified certificate of origin at the border or Cross Border Traders Association (CBTAs) office and get it signed by the customs officer at the border.

• If the goods do not appear on the common list then a normal certificate of origin must be obtained and certified (if they are locally produced) or if, the goods originate outside the FTA, they will be subject to the prevailing duty. 

COMESA Rules of Origin

COMESA rules of origin have five independent principles under which goods can be accepted in the importing country as having been produced /manufactured in another COMESA country. These principles are:

1. Those goods should be produced totally in the exporting member state such that there are no foreign materials added to the manufacturing process. Such goods are live animals, agricultural produce e.g. maize, cotton, etc, this is called, wholly produced rule.

2. Those goods when they are being made and there are some foreign materials added to the manufacturing process, those foreign materials should not be over 60% of the C.I.F (Cost Insurance and Freight) value; this is called Material content rule.

3. Those goods when they are being made and the raw materials are foreign, then, in the course of the manufacturing process, there should at least be 35% value addition; this is called Value addition rule.

4. Those goods when the companies make them and the raw material are foreign, during the manufacturing process, the Tariff heading of the final product should be different from the tariff heading of the foreign raw materials; this is called Change in Tariff Heading rule (CTH)

5. Those goods are in the list that was approved by the Ministers in charge of Trade in COMESA Member states (also called the Council of Ministers) and are regarded as very important in the economic development of either the exporting member or the region and that, in the process of manufacturing, there should be at least 25% value addition; goods such as mini buses that are assembled in some member states fall into this category. This rule is called ‘Goods of particular economic importance’ rule.