LUSAKA, Dec 8 (AFP) - Zambian President Levy Mwanawasa said Wednesday that AIDS was hampering free trade in Africa, the world's poorest continent.

Mwanawasa said the pandemic had badly affected most African countries because people who normally move goods in the free trade zones "cannot participate in trade when they are sick."

Africa is home to nearly two-thirds of all those living with HIV or AIDS in the world, and three-quarters of women AIDS patients, according to the United Nations.

In 2004, some 3.1 million Africans contracted the virus that destroys the immune system, and 2.3 million died of it, while the pandemic has driven down life-expectancy below 40 years in nine African countries.

Mwanawasa, addressing several African ministers attending an event marking the 10th anniversary of the Common Market for Eastern and Southern Africa (COMESA), urged their nations to start producing cheap AIDS drugs.

"AIDS is a major threat to economic growth in the region," he said.

Ugandan President Yoweri Museveni told the same meeting that African countries should move away from being dependent on agriculture to other sectors.

"Agriculture cannot create jobs. We need to start investing in service industries such as banks in order for us a create more jobs for our people," Museveni said.

"I have begun a war now. I want to fight against the export of unprocessed materials from Africa," Museveni added.

The Ugandan leader also announced that east African countries had decided to form a political federation by 2010 because they realised that free trade cannot work without political integration.

COMESA is a regional bloc made up of several African countries which set up a free trade area among member states including Angola, Burundi, Egypt, Malawi, Kenya, Rwanda, Uganda, Zambia and Zimbabwe.

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