The Southern African Development Community

The South African Development Community (SADC) is often held as the most successful of Africa’s regional trade agreement. This chapter examines this assertion. The SADC is made up of 16 countries, which together account for 33% of the land area of Africa, an estimated 22.7% of Africa’s total population in 2019, and 28% of its total gross domestic product also in 2019. The formation of the SADC free trade area has increased intraregional trade. For example, in 1995 intraregional export trade was 13.7% of total trade. In 2019, it increased to about 21%. However, SADC export trade with the rest of Africa has remained very low over the same period—2.6% in 1995 and only 3.9% in 2019. The result is that more than 70% of SADC’s export trade goes outside of Africa. SADC’s import trade within Africa rose from 12.4% in 1995 to 23.7% in 2019, but it is still low compared to the trade it conducts externally to Africa, which is more than 75%. With composition of trade, SADC export trade in 1995 consisted of 63% primary goods and 35.5% of manufactured goods. In 2019, the percentage share of primary goods had increased to 72.7%, while that for manufactured goods had dropped to 26.9%. Looking at imports trade, the percentage share of primary goods rose from 24.9% to 33%, while the share of manufactured goods fell from 68.7% in 1995 to 62.3% in 2019. At the time of the formation of the SADC, there were high hopes for the group because of South Africa’s position. It was thought that South Africa was going to be hub that will propel the group from a free trade area through a customs union, a common market, and much more. The establishment of the free trade area did raise the level of intraregional trade, but it has not been enough to break the fact that SADC conducts most of its import and export trade with entities outside of Africa. The challenge for the African Continental Free Trade Area (AfCFTA) is that SADC has been selected by the African Union as one of founding blocks that will eventually coalesce to form the AfCFTA, yet its intraregional trade is less than its extraregional trade. South Africa has taken much of the blame for why the SADC has not worked out the way it was intended. However, every member state has a part to play by transforming their economies toward industrialization and weaning themselves from the dependence of external agents—Europe and the United States then, and China now. Without deliberate effort to industrialize their economies, it will be difficult to turn the extraregional trade that now exists in the SADC into intraregional trade.