Why Tanzania Withdrawn Its Membership from the Common Market for Eastern and Southern Africa Comesa?

Abstract

The study has focused on analyzing the major factors influencing Tanzania to withdraw its membership form the Common Market for Eastern and Southern Africa (COMESA) in 2000. COMESA is the region economic integration where Tanzania joined in 1994 with the expectation of gaining more benefits through trade relations that existed between the member states. The article explains how the Common Market for Eastern and Southern Africa failed to meet the required targets to some of its member states particularly Tanzania and leading to withdraw its membership. The expectations of Tanzania to promote trade relations and improving exportations alongside with developing domestic industries and small and medium enterprises seemed to fail. The economic gap between Tanzania and other member states was increasing day to day to the extent in 1990’s Tanzania was among of the poorest countries in the world. The efforts were taken to revive the economy, and one of the approaches taken was to withdraw from one of the regional economic integration that was COMESA. The findings show that zero tariff reduction agreement was the major influence of Tanzania to withdraw its membership from COMESA. Reducing tariffs to 100% was a threat for Tanzania because according to trade policy review of 2000 shows that Tanzania was heavily relying on revenues from trade tariffs and VAT. Therefore, if Tanzania would remain in COMESA and implementing zero tariff reduction could more affect its revenue collection. According to East African trade review, implementation of the new tariff regime would cost the government a total of US$80 million annually and also would affect the domestic industries due to unable to sustain the competitiveness of the market for imported goods from other member countries.According to Hon. Benjamin Mkapa (1999), the former President of the United Republic of Tanzanian President, the large part of Tanzania revenue was depending on tariffs charges from foreign goods particularly from neighboring land locked countries such as DRC, Zambia, Malawi, Burundi and Rwanda that have been using Tanzania as transit to import and export their goods through Dar es Salaam, Mtwara and Tanga ports and transporting to their countries. The products were usually imposed trade tariffs through customs border agents and forming necessary source of revenue to Tanzania. According to him, if Tanzania would agree to remove all trade barriers to zero tariffs would harm its revenue collection and leading economic instability. Keywords: COMESA; Tanzania; regional integration; tariffs; DOI : 10.7176/IAGS/69-03