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COMESA 2018 Special Report, By Christopher Knoetze*

COMESA 2018 Special Report

Some COMESA members have begun to recognise the importance ICT will play in the future – not only for their respective local economies but for regional economic development efforts as well.

With perhaps the exception of Mauritius, COMESA’s member states have (due to historical legacies) posed many bureaucratic and operational challenges to those wishing to conduct business across borders within the region. With the plan to implement a digital free trade area (DFTA) – Africa’s first – COMESA is hoping to partly address some of these obstacles. Taking cues from Malaysia’s own Digital Free Trade Zone, the DFTA will aim to connect sellers and buyers in real time via blockchain technology (through a series of decentralised virtual ledgers). In addition to increasing the security of e-commerce transactions, the DFTA will also generate certification of origin, creating an extra layer of security and assurance for e-vendors and buyers.

The planned implementation of the DFTA will, reportedly, free up an estimated $450mn, which otherwise would be lost in dealing with the administrative hurdles associated with cross-border trade (via applications, documentation and the processing thereof). Of course, as the barriers to cross-border e-commerce are lowered, more businesses will have reason to engage in online vending as a means to reach more potential customers. This bodes well for local economies and will provide further impetus to integration efforts throughout the region.

The DFTA, however, should be regarded primarily as a resource and an amplifier – and not as an end in and of itself. If the 15 COMESA states which have agreed to the DFTA have neither the will nor the capability to exploit this resource to its fullest, all of the grand aspirations of its creators will count for naught. If the region improves its ICT environment, however, the potential for growth will be enhanced by the DFTA. To this end, businesses and policies aimed at improving the ICT capabilities of the region are of critical importance and, as such, require significant investment.

The UN’s International Telecommunications Union publishes an annual index tracking ICT development in 176 nations. In its 2017 report, the Seychelles and Mauritius were the only COMESA members to be ranked in the top 100. This is in stark contrast to the fact that 14 of the 18 COMESA states are ranked in the bottom 30 percent. Although this appears, prima facie, as a significant drawback for COMESA, it also presents the region with a blessing: as ICT remains largely underdeveloped, the scope for growth and penetration for investors (in particular) will be substantial and unparalleled. With the added incentive of the regional DFTA, acquiring financing for the development of ICT will have an edge over other countries and regions.

In light of this reality, some COMESA members have begun to recognise the importance ICT will play in the future – not only for their respective local economies but for regional economic development efforts as well. Rwanda, dubbed the “Silicon Valley of Africa”, is one such country: various initiatives – such as KLAB (providing ICT facilities for engineers and entrepreneurs), a Wi-Fi rollout campaign in urban centres, improved 4G coverage, drone delivery services, VISA’s choice to launch its mobile payment system in the country, and many more – all serve to underpin and support Rwanda’s Vision 2020 program. The program is dedicated to transforming Rwanda into a knowledge-based economy by placing emphasis on the improvement and development of human capital, ICT, and physical and legal infrastructure.

In order to achieve this goal, however, Rwanda has to meet investors and corporate partners halfway. To its merit, the country’s government has exceeded expectations. By creating a ministerial department dedicated to the development and regulation of matters concerning ICT, national uptake and development have markedly improved. Foreign investors and collaborative partners have been granted an ever-increasing window to doing business in the country.

Other nations in the region have similar practices – ministries dedicated to ICT are not uncommon (such as in Uganda, Egypt, and Zimbabwe, among others); transnational adoption strategies are being spearheaded by the private and public sector alike; individual nations are partnering with corporate sponsors to develop ICT throughout schools; and even Ethiopia, a relatively isolated nation, has sought the introduction of e-commerce.

Of course, challenges do remain: cybersecurity incidents may temper enthusiasm for adoption; policy gridlock remains an ever-present risk (regardless of the polity), and the political will to carry out the needed programmes may wax and wane with the transition of governments. Regardless, COMESA has a long way yet to travel, but the expected momentum it will gain from ICT development will shine an optimistic light on the region. As ICT spills over into neighbouring states, and as governments witness the success stories unfolding around them, the digital divide will grow increasingly less obstructive to the economic and social development of the region.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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