The majority of SADC economies have continued with their trend of positive economic growth albeit at levels that are insufficient to progressively reduce poverty.

Latest figures released by the SADC Trade, Industry, Finance and Investment Directorate show that the region’s average gross domestic product (GDP) grew by 3.2 percent in 2003, the same growth rate achieved in the previous year.

Angola, which has just come out of a devastating civil war, achieved a GDP growth rate of 17 percent in 2003. Botswana (6.7), Malawi (6.5), Mozambique (7) and United Republic of Tanzania (5.5) were among the top performers. The rest achieved growth rates below five percent with Zimbabwe, which appears set for an economic upturn this year, recording a negative growth rate.

At current growth rates, most SADC countries will not be able to achieve the Millennium Development Goal (MDG) of halving poverty by 2015. The internationally agreed minimum economic growth target necessary for developing countries to achieve the poverty MDG is for them to grow by at least seven percent per annum.

“The majority of our people in the region subsist on below internationally acceptable poverty lines,” says Jakaya Kikwete, Tanzanian Minister of Foreign Affairs and International Cooperation.

Poverty, which stands at 40 percent of SADC’s combined population, is fertile ground for the spread of major communicable diseases such as tuberculosis and malaria, and HIV and AIDS which have severely derailed development efforts in the region.

Fudzai Pamacheche, head of the SADC economic directorate says the other big challenge is for SADC member states to keep inflation within single digit levels. He says recent food shortages in some parts of the region had a knock on effect on the consumer price index in 2003, “particularly for Lesotho, Swaziland and Namibia, which had achieved single digit inflation rates in the last few years”. However, seven countries recorded single digit rates of inflation during the same year.

A significant increase in intraregional trade has been achieved since 2000 when the SADC Trade Protocol came into effect. Intra-regional trade is estimated at 25 percent of all international trade and is expected to rise to 35 percent by 2008, according to targets set out in SADC’s economic blueprint, the Regional Indicative Strategic Development Plan (RISDP).

“Major increases in trade have occurred in the textiles and clothing, and sugar sectors,” says Pamacheche, adding that special trade arrangements for these sectors have opened up opportunities for the region.

While the trade protocol is meant to facilitate the exchange of goods and services in the region by reducing and ultimately removing tariffs, a number of barriers still remain.

“There is outstanding work on the harmonisation of sanitary and phytosanitary measures, which are critical for trade in agricultural products,” says the SADC economist, explaining progress on the implementation of the SADC Trade Protocol.

He adds that: “while there has been significant progress on trade in goods, trade in services remains behind schedule mainly due to lack of capacity. In dealing with trade in services, we have to be mindful of the obligations that member states have undertaken at the World Trade Organisation (WTO) level as well as the current Doha Development Round negotiations.”

SADC countries, along with other developing nations, are facing stiff resistance from wealthy nations who are reluctant to reduce, let alone remove, subsidies on agricultural products, which render farmers in the south less competitive.

For SADC countries, two major avenues are available to pursue the trade talks: the WTO framework, and the African, Caribbean, Pacific (ACP) negotiations with the European Union (EU). Negotiations for a regional economic partnership agreement between SADC and the EU were launched in Namibia in July, this year.

The creation of a harmonised industrial and investment growth environment is yet another challenge for SADC. Most southern African countries are producers and exporters of primary products with a small industrial base that relies heavily on imported machinery and equipment. South Africa is the region’s most industrialised economy while Mauritius and Zimbabwe have a significant manufacturing base.

Pamacheche says SADC is carrying out a regional assessment of the extent of cross border trade, an informal sector that has steadily grown over the last few years, but remains largely ignored. It is now increasingly accepted that cross-border trade, in which women are the main players, has the potential to transform the lives of many social groups in the region.

Cognisant of the numerous economic challenges that the region faces, and the need to achieve acceptable macroeconomic convergence, SADC plans to establish a surveillance mechanism that will monitor the performance of member states and ensure that they stay within agreed targets as outlined by the 15-year RISDP.

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