COMESA Transport Services Experience: Policy and Strategy

1. COMESA Transport Services Experience: Policy and Strategy Presentation by Emily Mburu Trade in Services and Trade Facilitation Coordinator COMESA Secretariat

2. Context • Introduction • COMESA Trade in Services (TIS) Programme • COMESA Negotiations on Trade in Services • COMESA work on Transport Services • Trade and Transit Facilitation • Transport sub-sectors • Air Transport • Road Transport • Rail Transport • Maritime • Inland Water Transport • Conclusion

3. Introduction • At the initial stages the COMESA liberalization process concentrated on goods; • Transport and financial services were the early sectors for regional cooperation to facilitate the movement of goods • In the late 1990s COMESA included Trade in services as part of the integration programme and formed a working group on Trade in services

4. Trade in Services in COMESA • Trade in services in COMESA rose from $24.2 billion in 1997 to US$51.4 billion in 2007 • Services contribute at least 40% of GDP in most COMESA Member States • The objectives of the trade in services programme are: • Eliminating barriers to trade in services to promote growth and development • Enhance cooperation among Member States to improve the efficiency and competitiveness of the markets • To increase, improve and develop the exports of services • Liberalize trade in services

5. Forum for negotiating trade in services • The Framework for liberalizing trade in services in COMESA was developed and adopted by Council in June 2009 • The Regulations on Trade in services • Annex on the temporary movement of persons • The Regulations on Trade in Services provided for the formation of the Committee on Trade in Services

6. Committee on Trade in Services • The first meeting of the Committee was held in September 2009 • Services negotiating guidelines developed • They provide for seven (7) priority sectors, namely business, communication, construction, energy, financial, tourism and tourism • At the second meeting in May 2010 • Member States agreed to commence negotiations in four priority sectors, namely communication, financial, tourism and transport • The other three sectors are to be included once schedules of commitments are done in the four priority sectors

7. Committee on Trade in Services First Meeting Second Meeting • Held in September 2009 • Services negotiating guidelines developed • Provides for seven (7) priority sectors, namely business, communication, construction, energy, financial, tourism and tourism • Held in May 2010 • MS agreed to commence negotiations in four priority sectors, namely communication, financial, tourism and transport • The other three sectors are to be included at a later stage

8. Committee on Trade in Services (cont) Third Meeting Fourth Meeting • Held in May 2011 • Member States initiated the process of exchange of information based on their draft schedules of commitments • Member States agreed to finalize their schedules of commitments • Held in July 2012 • 10 Member States have submitted their schedules of specific commitments in the four priority sectors • MS with submissions discussed the schedules and made requests to each other

9. Work under the TIS Programme • To deal with specificities of each sector/sub-sector, the TIS programme works in collaboration with other COMESA programmes that deal with specific services’ sectors, such as • Insurance (Yellow card) • ICT • Transport etc • The objectives are to: • Bring together relevant stakeholders in a specific sector to identify the issues of interest to them in the sector • Enhance cross border trade and investment by eliminating barriers to trade in the specific sector • Work on harmonization of laws and regulations in the specific sector

10. COMESA work programme on Transport • An efficient transport sector is an integral element for development and facilitation of trade • COMESA has developed two documents • A Regional Transport Policy • A Regional Transport Strategy • The documents were adopted by Ministers of Infrastructure in July 2011 • These are to be used by MS in formulating national policies and strategies from a regional trade development and integration perspective • The strategy mentions the need for regional transport operators forming alliances to obtain economies of scale

11. Trade and Transit Transport Facilitation • COMESA has developed a number of instruments to facilitate trade and transport and reduce the cost of doing business • Among the issues addressed are lack of harmonization in policy, regulations, administrative and procedural regimes • The sub-sectors taken into consideration are: • Air transport • Road transport • Rail transport • Maritime transport • Inland water transport

12. Air Transport • The liberalization program is based on the Yamoussoukro Decision (YD) adopted by the AU in 1999 and ratified in 2000 • Implementation is through Legal Notice No. 2 which are the Regulations for the Liberalization of Air Transport in the COMESA region • 16 MS are implementing Phase 1 of Legal Notice No.2, the exceptions are: Libya, Madagascar and Swaziland • 11 MS are granting the fifth freedom rights to COMESA air carriers, namely Burundi, Djibouti, Egypt, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia and Zimbabwe.

13. Air Transport (cont)

14. COMESA-EAC-SADC Joint Competition Authority (JCA) Mandate Membership • Joint Competition Regulations and the Guidelines, Rules and Procedure for implementation of competition in air transport adopted by the 3 RECs • Established to supervise the activities of the airlines and operators in a liberalized market • The JCA comprises of seven members two from each REC and a rotating Chairperson for the RECs • Presently the members are: Burundi and Uganda (EAC), South Africa and Zimbabwe (SADC), and Malawi and Sudan (COMESA). Kenya is Chairing on behalf of COMESA • SADC Secretariat is providing secretariat services

15. Road Transport • Road transport is the primary mode of transport for goods and passengers in the COMESA region • Road Sector Management and Funding Reforms have been undertaken by MS to manage and maintain the road infrastructure assets • Most MS have set up road funds and development agencies • These agencies are responsible for construction and maintenance of road infrastructure nationally • The main source of funds are fuel levy for maintenance • Construction and rehabilitation is through government budget allocations, borrowing from development banks and cooperating partners

16. Rail Transport • The share of cargo by rail has declined drastically in the COMESA region in the past three decades • Options adopted to improve performance of the sector include: • concessions of railways • restructuring of management • closure of branch lines in some countries • Concessions have been done in 4 countries namely, Ethiopia, Kenya, Malawi and Uganda • Though no significant improvements in overall efficiency of the sub-sector • New railway development projects are underway in the region

17. Maritime Transport • Main challenge in the region is port congestion • Measures adopted to reduce congestion in the port of Mombasa include • Kenya Ports Authority and the Kenya Revenue Authority designated private local container terminals to accept cargo discharged directly from ships prior to payments of charges and customs dues • Regulatory checks and payments are now done at the private container terminals • Privatization of some services at the port is creating room for private sector participation and increasing investments at the ports

18. Inland Water Transport • Not much so far has been done in this subsector in the COMESA region • MS have agreed to prioritize the preparation of standards and regulations to enhance safety of navigation • MS sharing common water bodies are to enter into multilateral agreements to develop harmonized management of the resources

19. Conclusion • Develop national and regional strategies for dealing effectively with transport services as they are vital for economic development • Expand trade and investment opportunities and cooperative arrangements, especially under the Tripartite for economies of scale as well as to diversify markets and take advantage of trading opportunities • For COMESA, most work now under the infrastructural development is being undertaken at the Tripartite level

20. Thank you for your attention