The next 12 months are set to be a watershed period for southern Africa as it marks the dawn of a potential energy crisis as well as the official start of the home-stretch towards a unified regional economic bloc.

With some of Africa’s fastest expanding economies, the Southern African Development Community (SADC) region is expected to run out of surplus generation capacity in 2007.

The SADC economy was projected to expand by about six percent in 2006 on the back of strong performances by countries such as Angola.

The strong growth has not been matched by corresponding investment in power generation capacity to support new industries and other users being added to the regional grid.

Figures released by the Southern African Power Pool (SAPP) – a body that coordinates the planning and operation of electricity power systems among SADC member states – show that total annual demand will clock 44,689 megawatts (MW) by the end of 2007 against combined net generation capacity of 45,000MW.

At current growth rate, total regional demand for electricity is projected to hit 45,827MW by the end of 2008; 47,920MW in 2009; 48,795MW in 2010; and 50,291MW in 2011.

The initial effects of the energy shortfall were felt in 2006 when several countries in the region experienced power cuts.

The SADC region requires at least US$5.2 billion between now and 2011 to rehabilitate existing power stations and invest in short-term electricity generation projects, according to SAPP.

Rehabilitation and associated infrastructure projects, most of which are under construction and scheduled for completion before the end of 2007, will add 3,200MW of power to the SADC grid at an estimated cost estimated of US$1.4 billion.

Short-term generation projects, for which feasibility studies and environmental-impact assessments have been completed, will cost the region an estimated US$3.8 billion while adding about 4,200 MW to the regional grid on completion in 2010/11.

The next 12 months will also be a crucial for a region aiming to create a Free Trade Area (FTA) by 2008.

This will be a period when SADC member states are due to finalise a programme to establish a common tariff structure; create a dispute settlement mechanism; conclude special product agreements; eliminate non-tariff barriers; and harmonise customs, trade documentation and clearance procedures.

The target is to ensure that 85 percent of all intra-regional trade is at zero tariffs by 2008.

A major challenge will be how to ensure that the tariff phase down does not weaken regional economies. The phase down is based on a variable geometry model, taking into account the asymmetrical level of development in member states.

SADC member states are at different levels of development, with South Africa far much more developed than the rest in terms of industrial base.

Countries within the Southern African Customs Union – Botswana, Lesotho, Namibia, South Africa and Swaziland – are liberalising faster, followed by Mauritius and Zimbabwe, while the rest follow.

How fast and effective the region manages the process towards the creation of the FTA will be an important barometer to gauge future progress towards a SADC Customs Union scheduled for 2010 as well as a regional common market and common currency by 2015 and 2018, respectively.

This will also be a year during which a lot of progress is expected with regards to the relaxation of visa requirements among member states.

The August 2006 Summit of SADC Heads of State and Government agreed to speed up the relaxation of visa requirements while member states upgrade their operational systems in line with a regional plan to facilitate the movement of people across borders.

Some SADC countries have already scrapped visa requirements for citizens from another member state. These include Mozambique, South Africa and Swaziland, whose citizens no longer require visas to cross borders between the three countries.

Others such as Angola require visas for visitors from all the other SADC countries, except for Namibians with whom it has a reciprocal visa exemption arrangement.

A regional electoral advisory body and human rights commission are also on the cards in 2007 as southern Africa moves to strengthen its democratisation process.

SADC announced in November 2006 plans to further develop and entrench good governance and democratic practices through the creation of supportive institutions such as the Human Rights Commission and the SADC Electoral Advisory Council (SEAC).

Both bodies are scheduled for launch in 2007.

The main role of the SEAC will be that of advisor to SADC structures and to electoral commissions of member states on observation of elections.

It will complement the work of SADC Election Observer Missions, which are ad hoc teams of observers from member states who are assigned to observe the conduct of polls in countries in the region.

These teams are disbanded after every poll and new ones appointed when other elections take place.

The SADC Human Rights Commission will be a regional institution whose main objective is to entrench constitutional democracy in southern Africa through the promotion and protection of human rights.

It will, among other things, be responsible for addressing human rights violations and seeking effective redress for such violations; monitoring and assessing the observance of human rights by member states; raising awareness of human rights issues within the region; and educating and training stakeholders on human rights issues.

At least three elections are expected in the region during the course of the year.

Lesotho will hold elections to choose new members of parliament, a prime minister and councillors in February.

Also this year, Mauritius will conduct its presidential poll and Madagascar will elect parliamentary deputies.

There is also a possibility that Angola could hold presidential and legislative polls this year. Registration of voters for Angola’s first polls in 14 years started on 15 November 2006 and is expected to end in June.

There are also the lingering challenges in 2007 for an end to the impasse on an acceptable international trade deal at the World Trade Organisation (WTO) as well as the conclusion of Economic Partnership Agreement (EPA) negotiations with the European Union (EU).

Southern Africa would be hoping for the finalisation of stalled WTO trade talks, which will further open up markets of developed countries to products from the region.

Conclusion of WTO talks will include substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support for producers from Western countries.

The challenges of overlapping memberships of regional groupings have so far impeded progress in concluding EPA negotiations with the EU.

The 14-member SADC finds itself having to go into the negotiations as a depleted grouping.

About six countries – who are members of both SADC and the Common Market for Eastern and Southern Africa – have broken ranks with SADC for purposes of the negotiations and are discussing with the EU under the Eastern and Southern Africa (ESA) banner.

These are the Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe.

Only Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland and the United Republic of Tanzania are negotiating as SADC.

South Africa participates only as an observer after having concluded its own trade agreement with the EU in the late 1990s.

EPAs are trade and development agreements that the EU is presently negotiating with the six African, Caribbean and Pacific (ACP) regions – the Caribbean; Central Africa; Eastern and Southern Africa; Pacific, Southern Africa (the SADC group) and West Africa.

The EPAs will replace the trade chapters of the Cotonou Agreement reached in 2000 between the EU and the ACP countries.

They will replace the one-way trade preferences under the Cotonou Agreement with reciprocal trade arrangements between the ACP states and the EU. Substantive negotiations have been running since January 2005 and will end in June 2007.

The negotiations are on market access for agriculture and non-agriculture products and fisheries, trade in services, development cooperation, other trade related issues and legal provisions

(sardc.net)

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