Associated Press
NAIROBI: Africa s largest trade bloc endorsed a tax plan Tuesday designed to make it cheaper and easier to do business on an impoverished continent struggling to lure foreign investors.
The tax union endorsed at a summit of the Common Market for Eastern and Southern Africa, known as Comesa, was set to take effect in 2008. Under the agreement, a set amount would be charged for importing goods into member countries, perhaps 10 percent on semi-processed products and 25 percent on finished goods.
Not all Comesa s 20 members were prepared to join quickly, and some may never take part.
Comesa s chairman, President Ismael Omar Guelleh of Djibouti, said the union would lead to more foreign investment and deeper integration into the world economy. Comesa has been negotiating a unified tax scheme for its 20 member nations since 2005.
Not every member country will join the union immediately, as some countries have expressed fear their economies could be hurt if they implement what would be much lower tariffs.
Zimbabwe, where the inflation rate is in the thousands, charges 80 percent tax on finished goods and cannot be expected to lower tariffs right away, said Kenyan Trade Minister Mukhisa Kituyi.
Egypt and Libya opted out of the union because they have their own trade arrangements, he said.
Established 12 years ago, Comesa represents about 390 million people and has an estimated gross domestic product of $200 billion. The value of trade within Comesa countries rose to $6.3 billion in 2005, from $4.5 billion in 2004, according to the Kenyan Trade and Industry Ministry.
Comesa has been a free trade area since 2000 but only 13 of its 20 members have signed on to the free trade area agreement. Other trade blocs, such as the five-nation East African Community, have had to negotiate exemptions to their customs unions to avoid hurting individual nations.
Comesa s member countries are Angola, Burundi, Comoros, Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
Kenyan President Mwai Kibaki takes over as chairman from Guelleh on Tuesday.
