A proposed free trade agreement involving the Southern African Development Community (SADC), the East African Community (EAC), and the Common Market for Eastern and Southern Africa (COMESA) is called the Tripartite Free Trade Area (TFTA). The agreement was finalized on June 10, 2015, in Egypt.
Background
In 2005, the agreement was founded. Since 2006, the Tripartite Task Force has met at least twice annually. It is presided over by the secretary general of COMESA, the EAC, and SADC. Harmonizing REC programs in the areas of commerce and infrastructure development has been the focus of discussions. A Tripartite Summit of Heads of State and the Governments of COMESA, EAC, and SADC was suggested by the Tripartite Task Force in 2007. The anticipated Summit would strengthen member state buy-in and provide the Tripartite’s attempts to synchronize their diverse programs with crucial political direction. The suggestion was accepted, and on October 22, 2008, the Tripartite Summit took place in Kampala, Uganda.
Objective
The main goal of the agreement is to support the larger goals of the African Union (AU), which include accelerating the continent’s economic integration and achieving sustainable economic development to reduce poverty and improve the quality of life for those who live in Eastern and Southern Africa. To improve the coordination and harmonization of the numerous regional integration programs of its member RECs, Tripartite was established. These regional integration programs include the creation of Free Trade Areas (FTAs), Custom Unions, Monetary Unions, and Common Markets, as well as infrastructure development initiatives in the fields of transportation, information, communications technology, and energy, with a focus on enhancing and integrating trade.
Mobilization of resources
To solve the infrastructural gap that continues to impede regional economic growth, resources must be mobilized. The individual Member States do not have the financial wherewithal to remedy this gap. Due to the size of the infrastructure requirements and the subpar credit ratings of many of the concerned countries, commercial finance does not, by itself, offer a workable option. The agreement discussions, the execution of trade facilitation programs, and the provision of institutional and technical support for the implementation of trade-related measures all require the mobilization of resources. The Secretariats of COMESA, SADC, and EAC will work with the Member States to establish the legal frameworks required for the operation of public-private partnerships as part of the Tripartite Resource Mobilization Strategy.
Instruments for mobilizing resources
In addition, the following tools will be used to mobilize resources in favor of public-private partnerships (PPPs) whenever possible:
Account of Tripartite Trust
On behalf of Tripartite, the Development Bank of Southern Africa (DBSA) established and oversees the Tripartite Trust Account (TTA). The TTA is a grant fund that acts as a catalyst to help raise money from commercial and non-commercial sources. To all donors, the TTA is open. An Investment Committee advises the DBSA in selecting investments from the Tripartite Trust Fund following a predetermined list of project eligibility requirements.
Funds for infrastructure
Infrastructure funds have already been formed by COMESA, EAC, and SADC, or are in the process of doing so. National infrastructure funds have also been established by the various Member States. The goal is to get regional projects ready that can be presented to these infrastructure funds as bankable.
Partnerships with International Financial Partners and Donors
The World Bank, the African Development Bank, the European Commission, and numerous bilateral donors from Europe and Asia will be the key conventional donors and International Finance Institutions (IFIs) that will continue to assist in the development and restoration of the region’s infrastructure. Additionally, donor nations that are new or emerging will be contacted.
Project Preparation and Implementation Units (PPIU)
Through the PPIU, Tripartite will make major efforts in project identification and preparation. To prepare infrastructure projects and leverage money, the PPIU will collaborate with the right donors, IFIs, and project preparation facilities. The PPIU will collaborate closely with development banks (particularly the African Development Bank and the Development Bank of Southern Africa), the major international financial institutions, as well as bilateral and multilateral donors, and ask for further technical and financial help.
