Thickening boundaries choke East Africans’ integration bid

MONDAY August 1, 2022

By Patty Magubira

The Tranquility News Reporter, Tanzania

A decision made at Wilhelmstrasse in Berlin is apparently haunting the East African Community (EAC) following borders of each partner state negating a collective attempt to demolish them.

This was revealed recently during a High-Level Retreat aimed at taking stock of the Common Market and finding ways of fast-tracking implementation of the protocol which came into force over a decade ago.

The objective of establishing the protocol was to accelerate socio-economic growth by achieving free movement of goods, persons, labour, services and capital as well as rights of establishment and residence.

Persistent Non-Tariff Barriers (NTBs) have been frustrating free movement of EAC originated goods despite the Customs Union and the Common Market protocols coming into force 16 years and 11 years, respectively.

The retreat held at the EAC headquarters in Arusha, Tanzania, attracted members of the Council of Ministers, permanent or principal secretaries from the partner states, heads of diplomatic mission and industry, civil society, academia and media chiefs.

They enumerated some of the gains so far registered by the protocol as the use of an electronic EAC passport as a common travel document, removal of visa requirements for the EAC citizens from one partner state to another and issuance of free student passes.

The bloc has also witnessed increased regional trade and investment, as many companies from various sectors ranging from Finance, Manufacturing, Hospitality, Tourism to Education are expanding beyond their home countries.

They admitted, however, that the EAC partner states’ laws and regulations are a hard nut to crack, as they still inhibit growth of cross-border trade and investment in the region.

The partner states have been deviating from their commitments to apply equivalent tariff measures — resulting into an increase in NTBs, have not been conforming with their pledges and have been restricting the freedom of movement of capital.

Harmonisation of mutual recognition of academic and professional qualifications, annex on social security benefits in the community, additional commitments under the schedule on the progressive liberalisation of services and on the free movement of workers have been pending for 11 years now.

Way forward

The retreat resolved to increase intra-EAC Trade from the current 15 per cent to 40 per cent in the next five years, pleading with the EAC Heads of State Summit to direct partner states to, among other things, finalise the Regional Local Content Policy and to prioritise resources in agriculture and industrialisation in a bid to boost production.

The partner states should ratify Article 24(2) of the Customs Union Protocol to activate the trade remedies committee for it to handle disputes on trade-related matters.

Currently, resolving trade disputes is not only time-consuming, unpredictable and costly; but also hinders application of the EAC Non-Tariff Barriers (NTBs) Act, 2017, particularly section 12(2), (3) and (4), which allows the Council of Ministers to refer matters pertaining to elimination of NTBs to the committee on trade remedies.

The committee is supposed to handle matters on rule of origin, antidumping measures, subsidies and countervailing measures, safeguard measures and dispute settlement mechanism, among others.

The partner states should also harmonise domestic taxes by July, 2024, develop regional laws to enhance implementation of the Common Market Protocol, and apply the One Area Network on voice and data.

The EAC Heads of State Summit should also direct partner states to fast track establishment of a single EAC Air transport market and to harmonise fees, levies and taxes on aviation in a bid to support cargo services.

The Council of Ministers should, in turn, expedite establishment of the sectoral council on labour, employment and migration to oversee portability of social security benefits, among other commitments made under the sector.

The EAC Council of Ministers should also establish a regional mechanism for coordinating portability of public health insurance.

Rise and rise of borders

About 138 years ago, most of the leaders of Europe, the US and the Ottoman Empire — Turkish Empire then, met in Berlin for about three months and a half to set rules for helping Africans to rule themselves, if not colonising the continent.

Not a single African leader was part of the conference, including Menelik, an Ethiopian, who, aware of the meeting, told off the European, US and Ottoman Empire leaders for their ill-conceived plan of dividing the continent among themselves.

The conference ignored the future Emperor of Ethiopia, a powerful African state that continued building its empire in the surrounding territory, including River Nile which Italy, Britain and France were eying.

Save for Ethiopia, the rest of Africa was divided into colonies, killing cultural and tribal linkages as well as barter trade between clans, which forged a strong interaction of societies and free movement of people and goods before the boundaries came into existence.

Lost opportunity

Attempts to dissolve boundaries in East Africa date back to early 1960s when the late founding fathers of Kenya Jomo Kenyatta, Tanzania Julius Nyerere and Uganda Milton Obote agreed to form the defunct EAC.

Mwalimu Nyerere, as he was popularly known, went on suggesting that the independence of Tanganyika, now Tanzania Mainland, in 1961 could wait for that of Kenya in 1963 and of Uganda in 1962 for the trio to shake off the yoke of colonialism as one country.

The founding fathers, however, settled for the defunct EAC promulgated in 1967 only to collapse in 1977, owing to political differences among partner states.

IN BRIEF: EAC History

The first moves towards regional cooperation between states in East Africa were made in 1919. Kenya, Tanganyika and Uganda – all under British Administration – formed a customs union. In the first half of the 20^th century, the differing economic orientation of the three countries was apparent, paving the way for a wide range of later compatibility hiccups. Uganda and Tanzania were predominantly export-oriented. Kenya’s economy had a more domestic focus. The financial sector therefore developed much sooner in Kenya. In addition, more investment was channelled into Kenya as a colony, whereas Tanzania was merely under British mandate. Economic links were strengthened in 1948 by the founding of the East African High Commission, which established a united income tax in addition to a customs union. After the end of the colonial period, two organisations played a major part in the pursuit of regional integration. The East African Common Service Organisation (EACSO) succeeded the colonial-era East African High Commission. However, for the majority of decision-makers in the 1960s, EACSO was too closely associated with pre-independence structures. In addition, attempts to set up a central bank miscarried in 1965. Plans to introduce a common market proved difficult to be implemented. Yet there was still strong interest in regional cooperation, and so in 1967, the first EAC was founded. Kenya, Tanzania and Uganda agreed to cooperate on a wide range of economic and social issues. The first EAC, and the extensive integration which it achieved, was hailed a success, but the project, nevertheless, collapsed in 1977. The failure of the first EAC can be attributed to four main factors: its lack of steering functions, the unequal distribution of benefits, the purely intergovernmental structure, and the irreconcilable differences of opinion between leading players, especially between the Ugandan Dictator Idi Amin and the Tanzanian president Julius Nyerere. In the years that followed the collapse of the first EAC, the three former member states attempted to regulate economic affairs by means of individual multilateral agreements. Important steps towards establishing a community once again were taken in 1993 and 1997 at two summits of the heads of state. In 1993 the Permanent Tripartite Commission for Cooperation was set up: a coordinating institution that in 1998 produced a draft treaty for the later EAC. Cooperation on security matters was also initiated during this period. In November 1999, the Treaty for the Establishment of the East African Community was signed by the heads of state of Uganda, Kenya and Tanzania. It entered into force on July 7, 2000. Four new members, Burundi, Democratic Republic of the Congo, Rwanda and South Sudan have joined the community since. Source: KAS International Reports.