Despite political and economic obstacles, South Africa’s Trade Minister Alec Erwin said on Tuesday he was confident the 14-nation Southern African Development Community (SADC) would be able to establish the framework for a free trade zone next year.
In remarks to an international trade conference in Cape Town, Erwin also said Southern Africa would also have to consider the creation of a currency union if the SADC region truly wanted to develop its full economic potential.
SADC members are South Africa, Namibia, Botswana, Lesotho, Swaziland, Democratic Republic of the Congo, Angola, Malawi, Mauritius,Mozambique, Tanzania, Zambia, Zimbabwe and Seychelles.
He said the free trade agreement, which envisages an eight-year tariff reduction scheme, had been approved in principle, but that the terms of phasing down tariffs were still being negotiated. Erwin described the current SADC inter-country payment system as ineffective and expensive, and said it was an obstacle to regional development.
“If we are serious about economic integration some form of currency and payments system unification is going to have to come,” he said. The new free trade zone, he added, would create a market of more than 140 million people.
“This region has basic potential that is almost unsurpassed. We are probably the most concentrated area of natural resources in the world. There is virtually no mineral of any importance that is not mined in the region,” he said.
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