Namibia: Stockfeed Producers to Benefit From FTA
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New Era (Windhoek)
22 August 2008
Posted to the web 22 August 2008
Desie Heita
Windhoek
Namibian millers and producers of cattle feed stand at the fore of benefiting from the freshly signed Southern African Development Community Free Trade Area (SADC FTA) agreement.
The FTA would open up new suppliers of crops such as maize and beans from other African countries other than sourcing these in South Africa at higher prices, as is the current practice, say international trade experts.
SADC heads of state signed into effect the FTA pact last weekend, with the exclusion of Angola, the Democratic Republic of Congo (DRC) and Malawi, who will sign at a later stage. The trio are still addressing challenges of implementing the SADC Protocol on Trade.
The signing of the FTA agreement means that producers and consumers no longer pay import tariffs on about 85 percent of all trade in community goods within the initial 12 countries.
The FTA was launched under the theme 'Free Trade Area for Growth, Development and Wealth Creation,' at the SADC summit in Johannesburg, lurching forward SADC's ambitious plan of regional integration.
SADC wants to have a single customs union by 2010, a common market in 2015 and a single monetary union by 2018.
FTA allows goods originating from SADC members to enter neighbouring countries duty free. Nevertheless, the goods must still meet certain criteria as spelt out in the agreed rules of origin, says Wallie Roux, Namibia's independent trade analyst. Maize entering the Namibian market, says Roux, must meet the sanitary and phytosanitary measures.
Other than cheaper import market, the FTA would not give much export benefit to Namibia. Roux says this is because of lack of infrastructure and weaker economies.
"Most of these countries, with the exemption of South Africa, cannot afford to pay [for Namibia's export products]," said Roux.
There is also a complication of low volumes of trade between the SADC countries compared to the trade volumes with Europe. Intra-SADC trade volumes are low, despite the estimated growth of 25 percent in recent years, with the Southern African Custom Union (SACU) comprising much of the trade volumes within SADC.
The FTA opens up a market worth US$360 billion to 170 million citizens.
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When they finally join the FTA, Angola and the DRC would add a market worth about US$71 billion to the pot.
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