Economic integration

Southern African leaders discuss regional economic integration

Regional integration, security, macroeconomic stability and others were the main issues discussed when southern African leaders met in late June in Maputo, Mozambique.

They were in the country for the extraordinary summit of heads of state and government organized by the Southern African Development Community (SADC).

The main purpose of the event was to review the progress made in the implementation of the theme of the 40th SADC Summit; SADC: 40 years of building peace and security, and promoting development and resilience in the face of global challenges, which had already been approved by the SADC Summit in August 2020.

The first SADC Business Forum featured prominently on the overall agenda, and other important issues discussed included regional integration, cooperation and development.

The topic that received particular attention was regional security and its possible impact on the business and investment climate, with particular emphasis on Mozambique and in a broader perspective, as a whole in southern Africa.

Under the chairmanship of SADC and the Extraordinary Summit, the President of the Republic of Mozambique, Filipe Jacinto Nyusi, along with 15 leaders from southern Africa, finally agreed, after several months of round-trip negotiations, to form a military force. regional pending.

The sources of funding for the force are made up of a contingency fund and contributions from member states participating in the force, which should contribute between them to the tune of $ 7 million (5.8 million euros).

While multiple barriers, including high tariffs, customs rules and traps at border crossing with stocks remain and hamper regional economic integration, Mozambican President Filipe Nyusi, in a speech, reaffirmed his commitment to make of SADC an example of regional integration, taking into account its geostrategic position and the existing energy potential.

The Mozambican leader, during the public-private dialogue and the Business Forum, called for accelerating the ratification of protocols essential to economic integration.

The establishment of a customs union evolving towards a single market and a monetary union remains a huge challenge. It delays the process of ratifying regional trade protocols. The imbalances that characterize each of the states, such as large differences in macroeconomic stability, unequal levels of industrialization, lack of complementarity in the structure and base of production and inefficiencies in the value chain.

Comparing all the regional economic blocs in Africa, SADC seems unique, but it is essential to accelerate reforms for a better business environment and macroeconomic stability, which are essential to attract foreign investment into the regional bloc. Thus, the SADC Business Forum was purposely organized to bring together initiatives and projects, and match synergies to create opportunities.

Agostinho Vuma, the president of the Confederation of Economic Associations of Mozambique (CTA), has recognized over the years that tariff and non-tariff barriers are an obstacle to economic integration in southern Africa. There are so many challenges, such as the prevalence of tariff and non-tariff barriers, which are obstacles to regional integration, according to Agostinho Vuma.

On the other hand, low production capacity and prohibitive interest rates imposed by banks weaken economic development and regional integration.

Some reforms are almost necessary which are conducive to strengthening private sector enterprises in southern Africa and which could facilitate the rapid integration of the region’s economies into a future free trade area, and which could attract foreign investors to foreign markets. strategic sectors of the region, he explained, climbing in turn on the podium.

The SADC Business Forum also discussed the socio-economic impact of COVID-19 and post-pandemic recovery strategies, infrastructure and regional corridor development. Industrialization focused on improving the trade balance within the countries of the region, the role of the energy and mineral resources sectors and the participation of national companies in megaprojects were discussed.

Domestication of the SADC industrialization strategy with emphasis on improving the trade balance. The session, moderated by Ciyong Zou, UNIDO Program Director, attracted many participants who reviewed the process of mainstreaming and popularizing the strategy by the private sector.

Infrastructure: Development of SADC regional corridors. Participants reviewed the regional transport corridors that support the trade and regional integration agenda and focused more on the interventions needed to form structures and attract investment. The establishment of the SADC Regional Development Fund in 2015 aims to mobilize funds for key infrastructure and industrialization projects.

Industrialization has remained SADC’s main economic integration agenda since April 2015, when the SADC Industrialization Strategy and Roadmap 2015-2063 was approved. Vision 2050 is also based on three interdependent pillars, namely industrial development and market integration; infrastructure development in support of regional integration; and the development of social and human capital.

In order to make entrepreneurship an asset in the collective structure of the region, the discussion panels share, reflect and enhance existing regional dynamics and good practices, with a global impact on the ecosystem and initiatives for the development of entrepreneurship.

Energy, mineral resources and the local content value chain; Agribusiness: promote and articulate regional reference sectors; Entrepreneurship in SADC: Ecosystem and Development; Socio-economic impact of COVID-19 in the region and recovery strategies. Participants looked at the challenges imposed by the Covid-19 pandemic, and what needs to be done as avenues for recovery in the regional strategic sector.

Zimbabwe, through ZimTrade, presented its trade and investment opportunities. It was about achieving its foreign policy goals, especially the development and integration agenda, according to Zimbabwe Chronicle.

The SADC region, with a market of 350 million consumers, seeks to take advantage of existing potential, to increase trade and investment in the region, Africa and the outside world.

It is difficult to obtain statistics on various economic fields. Nonetheless, the SADC Secretariat, in an email, told this researcher that in 2018 total SACD exports were $ 154 billion and total imports were $ 149 billion.

SADC comprises 16 states: Mozambique, Angola, South Africa, Botswana, Zimbabwe, Eswatini, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Namibia, Seychelles, Tanzania, Zambia and Comoros.

Within its framework, the bloc collectively seeks to promote sustainable and equitable economic growth and socio-economic development, to forge deeper cooperation and integration, to ensure good governance and lasting peace and security, so that the region become a competitive and efficient player in the southern region, in Africa and in the world.

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