TUESDAY September 15, 2020
By Joe Lihundi
Tranquility News Reporter, Arusha, Tanzania
The East African Legislative Assembly Speaker, Mr Martin Ngoga, has challenged members of the business community in the region to voice challenges they face in cross-border trade.
Mr Ngoga said the East African Community (EAC) abounds with restrictions compounded by nationalistic interests notwithstanding the Common Market Protocol in place allowing free movement of goods and services across the bloc.
“How many times have you gone to the East African Court of Justice (EACJ) to challenge the restrictions,” queried Mr Ngoga when addressing leaders of the business community in Arusha recently.
The East African Business Council (EABC) had in collaboration with the GIZ Creating Perspectives Project convened a consultative CEOs Roundtable Meeting to explore approaches for revamping their businesses amid the global Coronavirus (Covid-19) pandemic.
Mr Ngoga said the EAC integration agenda was a collective responsibility that called for the business community to provide leadership to challenge politicians.
He said leaders, who drafted the EAC Treaty, believed the community would be secure if it was driven by the private sector. Article 7 of the Treaty establishing the EAC says operational principles of the community shall include a people-centre and a market-driven cooperation.
Mr Ngoga said security of the community should not be entrusted to the goodwill of politicians alone, but rather on laws and structures of the bloc.
“It’s time the business community challenged policies in place and even petitioned the assembly to promptly resolve some of the bottlenecks you face,” said Mr Ngoga, adding:
“Organise yourselves and defend your interests, not as nationals but as citizens of the region.” He admitted that geopolitical thinking was the major challenge in the integration process at the moment.
The EABC Chief Executive Officer, Mr Peter Mathuki, showered Tanzania with praises for keeping its borders open in the wake of the pandemic, saying the move sustained the intra-EAC trade and refilled the region’s food basket.
Mr Mathuki called on the CEOs to reform their business models in the advent of the Covid-19 in a bid to tap into the regional supply chains and drive economic growth.
Mr Walter Maeda, the Chairman of the Tanzania Chamber of Commerce, Industry and Agriculture for Arusha Region, urged the Tanzania government to consider relieving its business community of heavy taxation and banks to resolve challenges arising from the pandemic.
The CEO of the Tanzania Association of Tour Operators, Mr Sirili Akko, said one of the lessons learnt from the Covid-19 was the need for the region to promote local tourism for the industry hard-hit by the pandemic to rebound.
Tourism industry is a foreign exchange earner in the region attracting about six million visitors and accounting for $5.4 billion a year.
The industry contributes an average of 18.8 per cent to the EAC total exports. Its input is even higher in Rwanda (30 per cent) and Tanzania (26 per cent).
Going by the East African Development Bank report, only Rwanda and Tanzania will record above 4 per cent growth rate this year with the former projected to register the highest rate of 5.5 per cent.
The World Bank projections indicate the EAC average economic growth rate would decline from 2.4 per cent in 2019 to between -2.1 per cent and -5-1 per cent this year.
The bloc boasted having gross domestic product of 8.8 per cent in 2017 with Kenya, Rwanda and Tanzania registering 9.7 per cent, 12.7 per cent and 9 per cent, respectively.
Ms Miriam Mondosha, the EABC Policy, SMEs, Market Access and Gender Manager, attributed the economic slump to reduced commodity prices and trade, FDIs, tourism and travel, volatility in financial markets and disruptions in the education and health sectors.
Fresh horticultural produce from the region such as flowers, vegetables and fruits as well as fish had limited access to the global market.
Ms Mondosha said disruptions caused by the supply shocks had resulted into shortages of raw materials, capital goods, intermediate goods and final products which were critical for domestic production.
“The trucking industry bearing the brunt due to reduction in cargo movement compounded by lockdowns and curfews imposed by EAC partner states has reduced distribution of inputs such as fertilizers, pesticides and labour,” she said.
Air transport services came to a halt globally with many airlines having laid off workers while continuing to meet the costs of debt servicing for the grounded planes.
Associated industries like spare part manufacturers, ground handling, security and passenger transfers have also been impacted negatively, Ms Mondosha said.