IGAD - Trade and Market Integration

Trade and market integration in IGAD has lagged behind, in comparison to other regional economic communities’ implementation of trade agreements. In January 2012, the Heads of State and Government endorsed a Minimum Integration Plan where economic cooperation and integration was one of the priority areas of cooperation. In this context, the IGAD Secretariat works with member States towards harmonizing trade policies, procedures and standards to boost trade in the IGAD region.

IGAD is committed to facilitate and coordinate the removal of physical and non-physical barriers as well as the development of interstate transport and communications to foster market integration in the region. The Horn of Africa Initiative is, for instance, a European Union-African strategic plan to expand physical infrastructure such as road, rail, port, and air transportation to achieve better interconnectivity among member States. The Initiative also enhances production integration in energy, such as projects in oil, gas, hydropower, wind and geothermal energy.[1]

In May 2010, IGAD revived its Business Forum to promote private sector-led integration through increased trade and cross-border investments. The Business Forum aims to facilitate an environment where the Chambers of Commerce and Industry of member States cooperate and harmonize to fulfil their roles in promoting trade and investment throughout the region. The Business Forum also aims to advance trade facilitation by supporting access to inputs and trade finance; encouraging more public-private partnerships to create an enabling environment for domestic and cross-border investments as well as to advance the harmonization of policies with regard to trade, customs, and transport facilitation, through infrastructure development and free movement of goods in the region.[2]

Market integration, is in the pre-free trade area (FTA) phase in IGAD. The slow process is primarily caused by poor incentives for member States with overlapping memberships to other regional economic communities that are further along on their market integration course.[3] In effect, all IGAD member States, apart from Somalia and South Sudan, are likewise members of the Common Market for Eastern and Southern Africa (COMESA), which recently launched a Tripartite Free Trade Area Agreement (TFTA) together with the East African Community (EAC) and the Southern African Development Community (SADC). Additionally, one of the overarching objectives of IGAD is to realize the objectives of COMESA, which makes the institutional structure for the pursuit of a FTA ambiguous as well. Moreover, Kenya, South Sudan and Uganda are members of EAC that is implementing its Common Market along with TFTA. As COMESA and EAC are progressing in this regard, dual or multiple regional economic community memberships will result in weak incentives to pursue further macroeconomic policy convergence schemes under the IGAD configuration.[4] [5]

IGAD is among the few regional economic communities in Africa to have an elaborate framework for tourism development. The IGAD Sustainable Tourism Master Plan was developed through a consultative process involving key tourism stakeholders drawn from the member States, and through the support of UNECA. The master plan was officially launched during the IGAD tourism inter-ministerial forum held in Kenya in 2013. The aim of the master plan, which is currently being implemented, is to provide IGAD member states with a regional framework for sustainable tourism development that contributes to socio-economic development, poverty alleviation and promotion of regional integration.[6]