Overview

The Common Market for Eastern and Southern Africa (COMESA) is Africa’s largest Regional Economic Community with 21 member states and a market of around 600 million people.

  • As of 2016, COMESA is a fully functioning free trade area.
  • the COMESA Common Investment Area (CCIA) launched in 2007 and the Customs Union in 2009, are both in process of becoming fully operational.
  • of which are yet to be operational. Moreover, COMESA is working towards becoming a Common Market and a full Economic Community.

COMESA Member States 

Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Eswatini, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia and Zimbabwe.  

COMESA Free Trade Area and other Integration Milestones 

The COMESA Free Trade Area (FTA) came into being in the year 2000 and by 2020, 16 Member States are participating in the FTA which has led to a significant reduction in average tariffs on intra-COMESA trade. According to COMESA statistics, intra-COMESA trade has grown at average of 7 percent every year since the establishment of the FTA.  

The COMESA Customs Union, which has yet to be made operational, is designed to take forward the programs for customs cooperation, which deal with reducing documentation and unnecessary customs procedures, as well as modernizing customs operations.  

Programs are already under way to facilitate the free movement of investment, persons, and services, and to promote macroeconomic and fiscal convergence through the bloc’s adherence to a set of internationally recognized criteria. Over the years, macroeconomic stability in the region has greatly improved. 

COMESA is paving the way working towards becoming a Common Market, Monetary Union, and a full Economic Community. 

COMESA Rules of Origin 

To be able to access the COMESA market duty-free, businesses must abide by the following rules of origin: 

  • Wholly Produced Rule: The goods should be produced totally in the exporting Member State without any foreign materials being added in the manufacturing process. Such goods include live animals and agricultural produce such as maize and cotton;
  • Material Content Rule: Goods that have some foreign materials added in the manufacturing process that do not constitute more than 60% of the C.I.F. (Cost Insurance and Freight) value;
  • Value Addition Rule: Goods manufactured with foreign raw materials, which should have at least 35% value addition;
  • Change in Tariff Heading Rule or CTH: When companies manufacture goods using foreign raw materials, the tariff heading of the final product should be different from the tariff heading of the foreign raw materials; 
  • Goods of Particular Economic Importance Rule: Goods that are on the list approved by the Ministers in Charge of Trade in COMESA Member States (also called the Council of Ministers), which are regarded as very important in the economic development of the exporting member or the region and that where, in the process of manufacturing, there is at least 25% value addition. Goods such as minibuses, which are assembled in some Member States, fall into this category. 

For more information, please visit: www.comesa.int  

 

Reasons to Invest in COMESA 

Africa´s ambitions for a prosperous future were ratified in April 2019 when the threshold conditions required to activate the Africa Continental Free Trade Agreement (AfCFTA) were met. July 2020 marked the beginning of trading under the agreement.  The AfCFTA aims to create a single continental market for goods and services in member nations of the African Union. The AfCFTA owes much to Africa´s existing and already operational regional economic and trade organizations, including COMESA. 

 Africa’s 54 countries vary widely in size, population, natural resources and business climates.  African states are growing at different speeds and, like the rest of the world, are subject to disruptions stemming from regional and global economic or sector downturns and trade wars, as well as political conflict and climate change.  Notwithstanding the existence of unpredictable global scenarios, it is important to highlight the positive contribution being made by Africa´s regional economic and trade blocs to strengthening the continent’s value proposition for existing and prospective investors.  

 The Bottom Line 

  • The COMESA Free Trade Area is composed of 16 of its 21 Member States, and offers a market of 457 million people. 
  • Africa is the second fastest growing region in the world after Asia and has been growing at a CAGR of 4.6 percent since 2000. 
  • COMESA’s growth has been higher than Africa’s since 2013 and it is forecast to have real GDP growth exceeding 6 percent per year in 2019 and 2020. (AfDB) 
  • Population and urbanization rates in Africa and COMESA are expected to grow faster than any other region worldwide, offering a rapidly growing consumer market. 

Foreign investors view COMESA as an attractive destination for their growth plans as demonstrated by the steady increase of the bloc’s inward FDI stock over the past nine years; CAGR 7.73% growth year on year during the period 2010 – 2018. In addition to that, COMESA reports stability of FDI inflows despite the unpredictable global FDI environment. According to UNCTAD´s World Investment Report, FDI into COMESA has remained stable over the four years from 2015 to 2018, with inflows ranging from US$19.3 billion to US$20.6 billion.

Global Access to a Large, Diversified, Integrating and Resilient Market 

  • COMESA offers a fully operational and functional free trade area with duty free access to 16 of its 21 Member States.  Members of the COMESA FTA apply zero percent import duty on goods originating from the Member States in accordance with the COMESA Rules of Origin. 
  • COMESA Member States are located on strategic world trade routes such as the Suez Canal, the Red Sea, the Mediterranean Sea, and the Indian Ocean, and are in close proximity to global markets including Europe, the Gulf, Asia and the rest of Africa.

Real and Sustainable Growth 

  • With a total GDP of USD 754 billion in 2018, the COMESA economy is about the same size as Turkey and larger than that of Switzerland, Sweden, Austria, Thailand, Norway or Hong Kong.  
  • According to the African Development Bank, Africa’s GDP growth, estimated at 3.4 percent for 2019, is projected to increase to 3.9 percent in 2020 and to 4.1 percent in 2021. 
  • According to COMSTAT, COMESA GDP growth for 2019 is estimated at 5.3 percent and latest IMF estimates for 2020 are just over 8 percent, doubling current estimates for the continent’s estimated GDP growth rate. 
  • Nine COMESA Member States grew above 5 percent in 2019, and they are expected to maintain this growth in 2020, with four of them predicted to grow by more than 6 percent. 

Perception vs. Reality 

  • According to Mckinsey, the top companies in Africa “are, on average, both faster growing and more profitable than their global peers”. 
  • The opportunity that Africa represents is highlighted by the numbers.  According to UNCTAD´s World Investment Report (WIR), FDI into Africa in 2018 increased by 10.9 percent to US$47 billion while the world experienced a downfall of 13 percent. This trend seems to continue in 2019. Early estimates predict a modest FDI inflow increase of 3 percent in Africa while the world looks set to decline by 1.3 percent.  
  • African investors are an important source of FDI into Africa.  Average planned greenfield FDI into Africa by African investors in manufacturing alone was nearly 20 percent of total FDI over the 2015 -2018 period, peaking in 2016 at 31 percent of total manufacturing investment into the continent. 

Business Friendly Reforms 

  • In the World Bank´s Doing Business (DB) Report 2018, Sub-Saharan Africa, was the region with highest total number of reforms (83) across all indicators.  
  • Two years later, in the Doing Business Report 2020, nearly half of the 21 COMESA member states have improved their scores, and over two-thirds have either improved the score or they have remained unchanged. Furthermore, COMESA Member State Mauritius has made it into the Top 20 best Doing Business locations, ranked at number 13.  
  • More than half of COMESA Member States scored above the Sub-Saharan Africa average.  

Overview 

  COMESA  % Africa
Population (2019, millions)¹  586  44.8% 
Population Projections (2030, millions)¹  752  44.5% 
Surface Area (2019, km²)²  11,778,529  36.5% 
Languages³  English, French and Arabic 
GDP at Market Prices (2020, current, billions of USD)12  926  35.6% 
Real GDP Growth (2020, annual %)12  4.89  3.93 
Inflation, Consumer Prices (2020, annual %)12  10.69  7.85 
FDI (2019, million)¹³  20,485  45.15% 

Sources: 
1.United Nations Population Division, Department of Economic and Social Affairs, and COMESA Statistics COMESTAT.
2.COMESA Statistics COMSTAT.
3.CIA World Factbook.
4.AFDB Socio Economic Database
5.United Nations Conference on Trade and Development, World Investment Report 2015. 

COMESA’s Trade with the World (USD ‘000) 

  2016  2017  2018
Total Exports                    87,151,564  107,254,678  113,458,960 
Imports  186,840,594  181,525,075  196,145,264 
Total   273,992,158  288,779,754  309,604,225 

Source: COMESA Statistics; comstat.comesa.int 

COMESA Trade with Africa (USD ‘000)

  2016  2017  2018 
Total Exports                        22,171,296  24,905,857  30,836,175 
Imports  20,444,074  21,764,395  24,501,558 
Total  42,615,370  46,670,252  55,337,732 

Source: COMESA Statistics; comstat.comesa.int 

COMESA Trade with COMESA (2018, USD thousands) 

  2016  2017  2018 
Total Imports from Africa   8,235,470  8,688,593  10,207,692 
Total Exports to Africa   8,832,088  9,299,248  10,285,342 
Total   17,067,558  17,987,841  20,493,034 

Source: COMESA Statistics; comstat.comesa.int 

Main Products Traded and Partners (2018) 

Main COMESA Products traded within COMESA:   Copper ores and concentrates; Cane or beet sugar and chemically pure sucrose, in solid form; Petroleum oils, not crude; Tea, whether or not flavoured; Cement including cement clinkers, whether or not coloured; Cobalt ores and concentrates, sulphuric acid; etc.  
Main COMESA Imports from the World:  Petroleum oils, not crude; Motor cars and other motor vehicles principally designed for the transport of persons; Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses; Telephone sets, including telephones for cellular networks or for other wireless networks; Wheat and meslin, etc. 
Main COMESA Exports to the World:  Crude Petroleum oils and oils obtained from bituminous minerals; Petroleum oils and oils obtained from bituminous minerals (excluding crude); Refined copper and copper alloys, unwrought; Unrefined copper and copper anodes for electrolytic refining; Gold; Cobalt mattes and other intermediate products for metallurgy, etc.  
Main Import Partners:  China, South Africa, India, United Arab Emirates and Saudi Arabia 
Main Export Partners:  China, Italy, United Arab Emirates, Spain, Germany and United States of America 

Source: International Trade Centre COMTRADE Statistics. 

FDI Inflows (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Inflows   19,306  19,752  20,252  21,085  20,485 

Source: United Nations Conference on Trade and Development, World Investment Report 2020. 

 FDI Outflows (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Outflows   1,703  1,697  1,173  1,285  1,760 

Source: United Nations Conference on Trade and Development, World Investment Report 2020 

 FDI Inward Stock (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Inward Stock   261,384  279,205  299,184  316,454  336,545 

Source: United Nations Conference on Trade and Development, World Investment Report 2020 

 FDI Outward Stock (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Outward Stock  33,932  35,670  36,827  38,115  40,111 

Source: United Nations Conference on Trade and Development, World Investment Report 2020 

 FDI Inflows: Main Source Countries (number of projects) 

United Kingdom, UAE, United States, France, China, Germany, South Africa, Switzerland, Japan, and Netherlands.  

Source: Financial Times, fDi Markets, 2019. 

 FDI Inflows: Main Sectors (number of projects) 

Financial Services, Food and Tobacco, Business Services, Renewable Energy, Hotels and Tourism, Software and IT Services, Communications, Textiles, Metals, and Pharmaceuticals 

Source: Financial Times, fDi Markets, 2019. 

 FDI Inflows: Main Companies (number of projects) 

Emirates NBD Egypt, Attijariwafa Bank Egypt, Faulu Microfinance Bank, Credit Agricole Egypt, Scatec Solar, Bank Audi Egypt, Sabayik Company, Hainan Qinfu Foods, Allianz Egypt, and SBM Bank Kenya. 

Source: Financial Times, fDi Markets, 2019.  

Overview

The Common Market for Eastern and Southern Africa (COMESA) is Africa’s largest Regional Economic Community with 21 member states and a market of around 600 million people.

As of 2016, COMESA is a fully functioning free trade area.

the COMESA Common Investment Area (CCIA) launched in 2007 and the Customs Union in 2009, are both in process of becoming fully operational.

of which are yet to be operational. Moreover, COMESA is working towards becoming a Common Market and a full Economic Community.

COMESA Member States 

Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Eswatini, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia,
Uganda, Zambia and Zimbabwe. 
 

COMESA Free Trade Area and other Integration Milestones 

The COMESA Free Trade Area (FTA) came into being in the year 2000 and by 2020, 16 Member States are participating in the FTA which has led to a significant reduction in average tariffs on intra-COMESA trade. According to COMESA statistics, intra-COMESA trade has grown at average of 7 percent every year since the establishment of the FTA.  

The COMESA Customs Union, which has yet to be made operational, is designed to take forward the programs for customs cooperation, which deal with reducing documentation and unnecessary customs procedures, as well as modernizing customs operations.  

Programs are already under way to facilitate the free movement of investment, persons, and services, and to promote macroeconomic and fiscal convergence through the bloc’s adherence to a set of internationally recognized criteria. Over the years, macroeconomic stability in the region has greatly improved. 

COMESA is paving the way working towards becoming a Common Market, Monetary Union, and a full Economic Community. 

COMESA Rules of Origin 

To be able to access the COMESA market duty-free, businesses must abide by the following rules of origin: 

  • Wholly Produced Rule: The goods should be produced totally in the exporting Member State without any foreign materials being added in the manufacturing process. Such goods include live animals and agricultural produce such as maize and cotton;
  • Material Content Rule: Goods that have some foreign materials added in the manufacturing process that do not constitute more than 60% of the C.I.F. (Cost Insurance and Freight) value;
  • Value Addition Rule: Goods manufactured with foreign raw materials, which should have at least 35% value addition;
  • Change in Tariff Heading Rule or CTH: When companies manufacture goods using foreign raw materials, the tariff heading of the final product should be different from the tariff heading of the foreign raw materials; 
  • Goods of Particular Economic Importance Rule: Goods that are on the list approved by the Ministers in Charge of Trade in COMESA Member States (also called the Council of Ministers), which are regarded as very important in the economic development of the exporting member or the region and that where, in the process of manufacturing, there is at least 25% value addition. Goods such as minibuses, which are assembled in some Member States, fall into this category. 

For more information, please visit: www.comesa.int  

 

Reasons to Invest in COMESA 

Africa´s ambitions for a prosperous future were ratified in April 2019 when the threshold conditions required to activate the Africa Continental Free Trade Agreement (AfCFTA) were met. July 2020 marked the beginning of trading under the agreement.  The AfCFTA aims to create a single continental market for goods and services in member nations of the African Union. The AfCFTA owes much to Africa´s existing and already operational regional economic and trade organizations, including COMESA. 

 Africa’s 54 countries vary widely in size, population, natural resources and business climates.  African states are growing at different speeds and, like the rest of the world, are subject to disruptions stemming from regional and global economic or sector downturns and trade wars, as well as political conflict and climate change.  Notwithstanding the existence of unpredictable global scenarios, it is important to highlight the positive contribution being made by Africa´s regional economic and trade blocs to strengthening the continent’s value proposition for existing and prospective investors.  

 The Bottom Line 

  • The COMESA Free Trade Area is composed of 16 of its 21 Member States1, and offers a market of 457 million people. 
  • Africa is the second fastest growing region in the world after Asia and has been growing at a CAGR of 4.6 percent since 2000. 
  • COMESA’s growth has been higher than Africa’s since 2013 and it is forecast to have real GDP growth exceeding 6 percent per year in 2019 and 2020. (AfDB) 
  • Population and urbanization rates in Africa and COMESA are expected to grow faster than any other region worldwide, offering a rapidly growing consumer market. 

Foreign investors view COMESA as an attractive destination for their growth plans as demonstrated by the steady increase of the bloc’s inward FDI stock over the past nine years; CAGR 7.73% growth year on year during the period 2010 – 2018. In addition to that, COMESA reports stability of FDI inflows despite the unpredictable global FDI environment. According to UNCTAD´s World Investment Report, FDI into COMESA has remained stable over the four years from 2015 to 2018, with inflows ranging from US$19.3 billion to US$20.6 billion.

Global Access to a Large, Diversified, Integrating and Resilient Market 

  • COMESA offers a fully operational and functional free trade area with duty free access to 16 of its 21 Member States.  Members of the COMESA FTA apply zero percent import duty on goods originating from the Member States in accordance with the COMESA Rules of Origin. 
  • COMESA Member States are located on strategic world trade routes such as the Suez Canal, the Red Sea, the Mediterranean Sea, and the Indian Ocean, and are in close proximity to global markets including Europe, the Gulf, Asia and the rest of Africa.

Real and Sustainable Growth 

  • With a total GDP of USD 754 billion in 2018, the COMESA economy is about the same size as Turkey and larger than that of Switzerland, Sweden, Austria, Thailand, Norway or Hong Kong.  
  • According to the African Development Bank, Africa’s GDP growth, estimated at 3.4 percent for 2019, is projected to increase to 3.9 percent in 2020 and to 4.1 percent in 2021. 
  • According to COMSTAT, COMESA GDP growth for 2019 is estimated at 5.3 percent and latest IMF estimates for 2020 are just over 8 percent, doubling current estimates for the continent’s estimated GDP growth rate. 
  • Nine COMESA Member States grew above 5 percent in 2019, and they are expected to maintain this growth in 2020, with four of them predicted to grow by more than 6 percent. 

Perception vs. Reality 

  • According to Mckinsey, the top companies in Africa “are, on average, both faster growing and more profitable than their global peers”. 
  • The opportunity that Africa represents is highlighted by the numbers.  According to UNCTAD´s World Investment Report (WIR), FDI into Africa in 2018 increased by 10.9 percent to US$47 billion while the world experienced a downfall of 13 percent. This trend seems to continue in 2019. Early estimates predict a modest FDI inflow increase of 3 percent in Africa while the world looks set to decline by 1.3 percent.  
  • African investors are an important source of FDI into Africa.  Average planned greenfield FDI into Africa by African investors in manufacturing alone was nearly 20 percent of total FDI over the 2015 -2018 period, peaking in 2016 at 31 percent of total manufacturing investment into the continent. 

Business Friendly Reforms 

  • In the World Bank´s Doing Business (DB) Report 2018, Sub-Saharan Africa, was the region with highest total number of reforms (83) across all indicators.  
  • Two years later, in the Doing Business Report 2020, nearly half of the 21 COMESA member states have improved their scores, and over two-thirds have either improved the score or they have remained unchanged. Furthermore, COMESA Member State Mauritius has made it into the Top 20 best Doing Business locations, ranked at number 13.  
  • More than half of COMESA Member States scored above the Sub-Saharan Africa average.  

Overview 

  COMESA  % Africa
Population (2019, millions)¹  586  44.8% 
Population Projections (2030, millions)¹  752  44.5% 
Surface Area (2019, km²)²  11,778,529  36.5% 
Languages³  English, French and Arabic 
GDP at Market Prices (2020, current, billions of USD)12  926  35.6% 
Real GDP Growth (2020, annual %)12  4.89  3.93 
Inflation, Consumer Prices (2020, annual %)12  10.69  7.85 
FDI (2019, million)¹³  20,485  45.15% 

Sources: 
1.United Nations Population Division, Department of Economic and Social Affairs, and COMESA Statistics COMESTAT.
2.COMESA Statistics COMSTAT.
3.CIA World Factbook.
4.AFDB Socio Economic Database
5.United Nations Conference on Trade and Development, World Investment Report 2015. 

COMESA’s Trade with the World (USD ‘000) 

  2016  2017  2018
Total Exports  87,151,564  107,254,678  113,458,960 
Imports  186,840,594  181,525,075  196,145,264 
Total   273,992,158  288,779,754  309,604,225 

Source: COMESA Statistics; comstat.comesa.int 

COMESA Trade with Africa (USD ‘000)

  2016  2017  2018 
Total Exports  22,171,296  24,905,857  30,836,175 
Imports  20,444,074  21,764,395  24,501,558 
Total  42,615,370  46,670,252  55,337,732 

Source: COMESA Statistics; comstat.comesa.int 

COMESA Trade with COMESA (2018, USD thousands) 

  2016  2017  2018 
Total Imports from Africa   8,235,470  8,688,593  10,207,692 
Total Exports to Africa   8,832,088  9,299,248  10,285,342 
Total   17,067,558  17,987,841  20,493,034 

Source: COMESA Statistics; comstat.comesa.int 

Main Products Traded and Partners (2018) 

Main COMESA Products traded within COMESA:   Copper ores and concentrates; Cane or beet sugar and chemically pure sucrose, in solid form; Petroleum oils, not crude; Tea, whether or not flavoured; Cement including cement clinkers, whether or not coloured; Cobalt ores and concentrates, sulphuric acid; etc.  
Main COMESA Imports from the World:  Petroleum oils, not crude; Motor cars and other motor vehicles principally designed for the transport of persons; Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses; Telephone sets, including telephones for cellular networks or for other wireless networks; Wheat and meslin, etc. 
Main COMESA Exports to the World:  Crude Petroleum oils and oils obtained from bituminous minerals; Petroleum oils and oils obtained from bituminous minerals (excluding crude); Refined copper and copper alloys, unwrought; Unrefined copper and copper anodes for electrolytic refining; Gold; Cobalt mattes and other intermediate products for metallurgy, etc.  
Main Import Partners:  China, South Africa, India, United Arab Emirates and Saudi Arabia 
Main Export Partners:  China, Italy, United Arab Emirates, Spain, Germany and United States of America 

Source: International Trade Centre COMTRADE Statistics. 

FDI Inflows (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Inflows   19,306  19,752  20,252  21,085  20,485 

Source: United Nations Conference on Trade and Development, World Investment Report 2020. 

FDI Outflows (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Outflows   1,703  1,697  1,173  1,285  1,760 

Source: United Nations Conference on Trade and Development, World Investment Report 2020 

FDI Inward Stock (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Inward Stock   261,384  279,205  299,184  316,454  336,545 

Source: United Nations Conference on Trade and Development, World Investment Report 2020 

FDI Outward Stock (millions of USD) 

Year  2015  2016  2017  2018  2019 
FDI Outward Stock  33,932  35,670  36,827  38,115  40,111 

Source: United Nations Conference on Trade and Development, World Investment Report 2020 

FDI Inflows: Main Source Countries (number of projects) 

United Kingdom, UAE, United States, France, China, Germany, South Africa, Switzerland, Japan, and Netherlands.  

Source: Financial Times, fDi Markets, 2019. 

FDI Inflows: Main Sectors (number of projects) 

Financial Services, Food and Tobacco, Business Services, Renewable Energy, Hotels and Tourism, Software and IT Services, Communications, Textiles, Metals, and Pharmaceuticals 

Source: Financial Times, fDi Markets, 2019. 

FDI Inflows: Main Companies (number of projects) 

Emirates NBD Egypt, Attijariwafa Bank Egypt, Faulu Microfinance Bank, Credit Agricole Egypt, Scatec Solar, Bank Audi Egypt, Sabayik Company,
Hainan Qinfu Foods, Allianz Egypt, and SBM Bank Kenya.
 

Source: Financial Times, fDi Markets, 2019.  

fdi

Economic growth of the region has exhibited resilience in the face of the global economic downturn, despite the many pertinent challenges facing Africa. Notable progress within the COMESA region has been achieved through improved macroeconomic management, market-based reforms and continued structural progress in many countries.

In 2013, the combined gross domestic product (GDP) for COMESA stood at USD 638.6 billion from USD 553.9 billion in 2012 an impressive rate of 15% growth rate.

The average annual inflation rates in COMESA countries too were at varying levels. During 2013, countries such as Comoros, DR Congo, Djibouti, Mauritius, Rwanda and Seychelles, had average inflation rates of less than 5% , 8 other COMESA Member States have one digit inflation rate.