COMESA was formed in 1994 to replace the former Preferential Trade Area (PTA) arrangement which had existed earlier. COMESA was established “as an organization of free independent sovereign states which have agreed to co-operate in developing their natural and human resources for the good of all their people.” With its 19 member states, population of over 389 million and annual import bill of around US$32 billion, and with an export bill of US$82 billion, COMESA forms a major market place for both internal and external trading.
By signing up to COMESA, countries agreed on the need to create and maintain:
- A full free trade area guaranteeing the free movement of goods and services produced within COMESA and the removal of all tariffs and non-tariff barriers;
- A customs union under which goods and services imported from non-COMESA countries will attract an agreed single tariff all COMESA States;
- free movement of capital and investment supported by the adoption of common investment practices 50 as to create a more favourable investment climate for the entire COMESA region:
- A gradual establishment of a payments union based on the COMESA Cleaning House and the eventual establishment of a common monetary union with a common currency;
- The adoption of a common visa arrangement, including the right of establishment leading eventually to free movement of bona fide persons.
The bloc is now Uganda’s leading export market, accounting for 52 percent of all export earnings. It is further anticipated that with the recent membership to the COMESA Free Trade Area, there are better opportunities for Uganda’s exports to the bloc.
In 2015, Uganda and other COMESA member states started the process of ratifying the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) to enable all economies gain better market access in Africa. In April 2019, the Africa Continental Free Trade Area (AfCFTA) agreement secured the minimum threshold of 22 ratifications required for it to become effective. The agreement went into force on May 30th 2019. The objectives of the CFTA are to:
- Create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Continental Customs Union and the African Customs Union;
- Expand intra African trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across RECs and across Africa in general;
- c) Resolve the challenges of multiple and overlapping memberships in RECs and expedite the regional and continental integration processes; and
- Enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources.