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Zambia 2014 | DIPLOMACY | FOCUS: REGIONAL INTEGRATION

More than just geographical centrality, Zambia is looking to its peripheral states to improve economic integration at the regional and continental level.

As a member of the Southern African Development Community (SADC) and the hosting nation for the headquarters of the Common Market for Eastern and Southern Africa (COMESA), Zambia has been at the forefront of larger regional integration ambitions.

To achieve its goals of poverty eradication and development, the SADC is currently in the midst of a long-term Regional Indicative Strategic Development Plan (RISDP), complete with a list of Integration Milestones that includes a free trade area, customs union, common market, monetary union, and eventually a single currency. The minimal conditions of the SADC Free Trade area were realized in August of 2008, with 85% of the region's total internal trade having zero duties. The complete liberalization of tariffs was achieved in 2012, after the gradual liberalization of more sensitive goods. The customs union had a target to be implemented by 2010, but due to capacity restraints and other complications regarding involvement in various other regional integration plans among the various member states, the SADC customs union has not yet been achieved.

Going along with the RISDP, a full common market involving the 15 SADC member states was originally planned to be implemented by 2015. However, the establishment of an SADC common market is dependent on the establishment of the already delayed customs union, thus making the common market unlikely to be achieved by next year.

The next integration milestone for SADC after the common market is a monetary union, which was originally planned for 2016 but delays in the previous integration milestones will again most likely translate to the delay of any SADC MU. However, the groundwork for a monetary union is already being worked on. In 2009, the Ministers of Finance in SADC developed the Model Central Bank Law, aimed at harmonizing the various central banks and their banking framework. Additionally, 14 of the 15 member states are working together to harmonize the banking sector's supervision process. The Real Time Gross Settlement System, used to modernize and harmonize intra-SADC payment settlements, is being used by 12 SADC member states.

The final culmination of the SADC's RISDP is the establishment of a single currency, effectively turning the SADC into an economic union. The target date of 2018 will surely be delayed, with the main challenges of achieving this milestone being related to the unresolved issues of SADC member countries who are also involved with other customs unions.

For Zambia, the other customs union is COMESA. Originally founded as a free trade area in 2000, COMESA established a customs union among member countries in 2009, with great effect. Intra-COMESA trade went from $734 million in 1985 to over $15 billion in 2010. For Zambia's part, the country was among the top three alongside Kenya and Egypt in terms of trade creation during this period.

Beyond SADC and COMESA, Zambia is also involved in a much larger continental integration plan called the Tripartite FTA, which is a proposed free trade area combining the COMESA, SADC, and East African Community (EAC) markets. Although negotiations are still under way, the FTA stretching from Cape Town to Cairo has a population of over 600 million and a combined GDP of over $1 trillion.

Located at the center of both major growing regional markets—SADC with 277 million people and a combined GDP of $575.5 billion and COMESA with a population of 459 million people and a GDP of $508 billion—Zambia is well positioned to benefit from its geographical advantages. Realizing this, the Zambian government is actively trying to leverage its central location and the region's growing integration into becoming a trade hub through various infrastructure projects. Bordering EIGHT SADC countries, Zambia's Link Zambia 8000 plan is an ambitious infrastructure project calling for 8,000 kilometers of roadway throughout the country.

In aviation, Zambia is spending $385 million to renovate Lusaka's main airport to double its annual capacity to 4 million passengers. A new $522 million airport is being built in Zambia's mineral rich Copperbelt region, in the city of Ndola.

Although there is still much uncertainty regarding the future of SADC, COMESA, and Tripartite integration, early returns have proven to be quite beneficial for landlocked Zambia. With much needed infrastructure investments over the short term, Zambia looks to further establish itself as a key player in driving development both for itself and for the region.