The East African Community (EAC) has registered tremendous progress in the recent past including adding new members, trying to eliminate the barriers that divide its people and aiming at delivering greater prosperity for its entire people. However, it is increasingly becoming evident that the ongoing global financial crisis is posing great challenges for EAC economies. More importantly, it is threatening regional economic integration – the first step towards the ultimate goal of the Community, the East African political federation. As highlighted by all the Finance Ministers of EAC during the reading of their respective national budgets for the financial year 2009/2010, the impact of the global financial and economic crisis is already being felt with significant revenue losses among all the five partner states.
The East African Community (EAC) has registered tremendous progress in the recent past including adding new members, trying to eliminate the barriers that divide its people and aiming at delivering greater prosperity for its entire people.
However, it is increasingly becoming evident that the ongoing global financial crisis is posing great challenges for EAC economies. More importantly, it is threatening regional economic integration – the first step towards the ultimate goal of the Community, the East African political federation.
As highlighted by all the Finance Ministers of EAC during the reading of their respective national budgets for the financial year 2009/2010, the impact of the global financial and economic crisis is already being felt with significant revenue losses among all the five partner states.
This is largely due to the fact that the crisis is affecting demand for exports, remittances, reducing household income and revenue from tourism, which are major sources of government revenues. There is also a possibility of reduced aid flows.
Conversely, the crisis presents the first major test for regional integration almost ten years of existence of the Community. The choices made during this crisis will largely shape EAC’s destiny for the foreseeable future.
While the impact of the crisis may vary in the different countries, challenges must be tackled jointly. It must be noted that continued fast tracking and deepening EAC integration is the only way forward for the EAC partner states not only to mitigate impact of the crisis but also avoid their further marginalisation in the globalised economy.
Through regional integration EAC partner states will reap the benefits of the removal of barriers of trade and increased movement of investment. In spite of the crisis, efforts geared towards regional integration must continue.
This calls for continued and consolidated political support for the EAC integration process, including availability of adequate financial resources and timely remittances of Partner States’ contributions.
Most importantly, it is necessary for EAC member states to conclude the Common Market Protocol as way forward for further regional and continental integration.
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