Working Paper 109 - The First Africa Region Review for EAC/COMESA

The main objective of this paper is to present a mapping of trade-relatedbottlenecks in the EAC/COMESA region to eligible aid-for-trade (AFT)categories, and to articulate a strategy for mobilising significant amounts of aidfor trade. To do so, the paper reviews the constraints to trade in EAC/COMESA.It identifies existing AFT-related programmes and activities, and documents thestatus of their implementation, pointing out any gaps and the causes thereof.The paper is based on the premise that the EAC/COMESA region faces uniqueand severe constraints to trade related to the fact that many of the memberstates are land-locked. This, combined with poor infrastructure and services,cumbersome border procedures, inadequate mainstreaming of trade in nationaldevelopment strategies, and lack of progress in deepening economic integration,explains the region’s dismal trade performance, both intra-regionally andexternally. AEC/COMESA is aware of these constraints. The region haslaunched various initiatives to tackle them. The majority of these initiatives relateto trade facilitation measures.The North-South Corridor is one trade-related infrastructure project that hasattracted attention in the region, both by virtue of its scale and purported benefits.Even though the implementation of the project was slow initially, the politicalimpetus during the North-South Corridor High Level meeting in Lusaka, Zambiain April 2009 attracted financing in the region of US$1.2 billion. As the first pilot inEast Africa, the North-South Corridor clearly shows that Aid for trade can play akey role in sustaining ongoing efforts to overcome bottlenecks to trade.The key message is that an effective AFT strategy should focus primarily ontrade facilitation, with some emphasis on trade-related infrastructure. Sincesubstantial aid has traditionally been directed to technical assistance andcapacity building, and the trend is likely to continue, there is no need to build thiselement into the strategy per se. Such a strategy must: (a) Emphasise thecontribution of trade facilitation measures in reducing trade costs and enhancingexport competitiveness; (b) demonstrate the added benefits of modern traderelatedinfrastructure; (c) demonstrate the political will by the EAC/COMESAmember states to address the region’s constraints in the spirit of cooperation andsolidarity to landlocked neighbours; and (d) impress on the donor community theneed for greater AFT resources to help the region participate fully in global tradeand attain the MDGs.The Aid for Trade agenda should also highlight the importance of monitoring toshow its impact on trade and development. In this case, the EAC/COMESAregion should maintain a database of Aid for Trade for monitoring and evaluationpurposes.