EAC Integration:10 years later, Rwanda working with Partner States towards a Sustainable Community

Hon. François Kanimba, The Minister of Trade, Industry and East African Community

By: SALAFINA Flavia,
Acting. Director General, Coordination of EAC Affairs

Ten years ago, in 2007, Rwanda joined the EAC bloc, a six-state regional bloc made up of Rwanda, Kenya, Uganda, Tanzania, Burundi, and later the Republic of South Sudan joined, in line with the 6th pillar of Rwanda’s Vision 2020, which focuses on regional and economic integration to promote an open and liberal trade regime, as well as promoting foreign direct investments and competitive enterprises.

Available statistics indicate that the total EAC population stands at 162 million and boasts of a combined gross domestic product of $169.5 billion which presents a huge and economically viable market to promote investment and trade in the region and beyond.

As President Paul Kagame noted recently when he appeared on RBA television; “Every country is better off being a member of the East African Community than on its own. There are many achievements we have realised by working together as a Community.”

Since joining the EAC, the Government of Rwanda, through the Ministry of Trade, Industry and East African Affairs (MINEACOM) has been mobilising the population into clear appreciation and participation in the integration process so as to reap from the many opportunities it presents.  In the last ten years, a number of milestones have been registered in different areas of cooperation.

Rwanda’s Trade with EAC

Trade between Rwanda and the EAC has grown from US$ 340 million in 2008 to US$544 million in 2016, representing a growth of 6% per annum. Exports growth averaged 17% over the past nine years with total exports amounting to US$ 148 million in 2016 from US$ 42 million in 2008.

Operationalisation of the Single Customs Territory

Operationalisation of the Single Customs Territory (SCT) along Northern and Central Corridors was introduced to address inefficiencies on the land route between ports and Kigali and bring down the cost of and time to trade.  In 2013, when the SCT was launched, it took a container 22 days to reach Kigali from Mombasa costing $ 4, 650.

The achievement to date has been reduction in the cost and time to move to a container between Mombasa to Kigali to $3,655 and 6.3 days. This was as a result of reforms implemented such as Introduction of single customs declaration; Regional Customs Transit Guarantee; Deployment of Rwandans Customs officials in Mombasa, and Dar es Salaam; Reduction in number and time at weigh bridges; Upgrading and interfacing of customs IT system; Introduction of Electronic cargo Tracking System and VAT exemptions on transit services.

One Network Area

Scrapping off of Roaming Charges under the Northern Corridor led to increased volume of calls by 312% between November 2014 and November 2015. Telecom operators also benefited with revenue for the Rwanda’s operators on roaming calls with Kenya and Uganda increasing by 111% and 58% respectively and profit margins increased by 181% and 218% on One Network Area (ONA) call routes since its introduction in 2014.

This was implemented to bring down the cost of regional telecommunication services mostly calls that were in early 2014 averaged as much as $2.19 per minute for roaming in East African Community. Negotiations are ongoing also under the central corridor to benefit from a single market, enhance communication, travel and cross border trade.

One Stop Border Post, Use of Identity Cards ease Cross-border trade

As small scale and informal cross-border traders have gained much from the use of national identity cards for crossing borders to access markets, big importers and exporters, on the other hand, have greatly reaped from the establishment of One Stop Border Posts (OSBPs).

Under the OSBP arrangement, a border facility combines two stops for national border control processing into one, and consolidates border control functions in a shared space for exiting one country and entering another. 

Ndamage Damascene, who this writer finds at Gatuna Border Post attests to how the OSBP initiative has simplified business flow in the region. 

“On reaching Gatuna, I use about two hours to process the paperwork after which I proceed with my journey. This is a relatively shorter time.  Under the previous conditions, I would have to spend two days sorting out all the documents,” Damascene explains.

The OSBP practices have been extended to several border posts. Operational hours have been extended from 12 working hours to 24/7 at Gatuna Border Post between Rwanda and Uganda, 16/7 hours at Cyanika Border Post between Rwanda and Uganda, 16/7 hours at Rusumo Border Post between Rwanda and Tanzania and 18/7 at Nemba OSBP between Rwanda and Burundi. There is a plan to extend working hours to 24/7 for all the above borders.

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Caption:Hurdles towards cross-border trade have been addressed

Elimination of Non-Tariff Barriers

On the whole, there has been a good progress in the elimination of Non-Tariff Barriers (NTBs). An EAC Time Bond programme was established and since 2009 to date, a total of 116 NTBs were reported and resolved, this facilitated trade among EAC Partner States. Among which were reduction of weigh bridges, police check points, removal of national parking fees equivalent to US$ 300 per trunk; entry fees to Partners States etc.

Use of National Identity Cards to Travel

The use of National ID for regional mobility is also impacting businesses in more ways than one. In fact, from January 2014, a total of 1.4 million national IDs were shown at the border to enter or exit Rwanda 1 year after the launch. The use of IDs increased free movement of persons, which is an opportunity for Rwandans to learn from best practices in the region that will improve their competitiveness with the expanded market and vice versa.

Besides, the use of ID cards as travel documents, removal of visa and work permit fees for East Africans facilitated enterprises to source competent professionals from the EAC Partner States to fill the shortage of skilled technicians.

East African Single Tourist Visa

The East African Tourist Visa (EATV) was introduced in 2014 and is issued at the point of entry. In the first 18 months after the launch, 8,409 EATV were issued. The visa costs US$100 for a 90 days and a tourist is able to use the visa across Kenya, Rwanda and Uganda. This increased tourists and shared revenues, each member state receives US$30 for every EATV issued and the country issuing the visa receives an additional US$10 to cover administrative costs. The Visa is available online, Embassies and consulates and is highly promoted Member States.

Air Space Management:

Bilateral agreements on air space liberalisation under the Northern Corridor have yielded. Airlines are allowed to pick up passengers in Uganda, Kenya, Rwanda and South Soudan than where it domiciled and transport them to a third party without stopping in its domiciled country on routes. The direct economic impacts are estimated to amount to $49.43 million including additional growth revenue for Rwandair; reduction in airfare for scheduled services; increased utilisation of Rwandairs’s aircraft fleet; improved connectivity and time savings for Rwandans and regional travellers with additional service availability and government revenues from taxes and fees on air services, landing and air space management.

Application of Common External Tariff (CET)

EAC Integration has facilitated regional trade through elimination of internal tariffs and Application of the Rules of Origin. Products produced in the East African Community Partner States are free of customs duties. Traders have been issued the Certificate of Origin (Simplified & Normal certificate of Origin) at borders and commodities whose value is less than $2000 are given Certificate of Origin free of charge.

Standardization

MINEACOM, through Rwanda Standards Board (RSB), has worked with partner states towards harmonization in standardization, quality assurance, metrology and testing. RSB harmonized 286 regional (EAC) standards equivalent to 70% of EAC standards to facilitate regional trade while 19 Standards were approved by the Sectoral Council on Trade, Industry Finance and Investment in May, 2016 as East African Standards.

Signed EAC Mutual Recognition Agreements

A total of four Mutual Recognition Agreements (MRAs) under Trade in Services have been concluded. These include; (1) Architectural services, 2) Accounting, Auditing & Book Keeping 3) Veterinary Services and 4) Engineering services. Professionals whose MRAs are under negotiation include Pharmacists, Lawyers, Land Surveyors and ICT Professionals under the Northern Corridor Framework. The Ministry embarks on the journey towards the conclusion of more MRAs. The MRAs represent major milestones in regional recognition of accreditation decisions. The motivation behind these agreements is the growing need to ascertain that degrees of graduates from programs in one country or region be recognized in another.

Harmonization and Approximation of laws within EAC context

In line with the implementation of EDPRS II framework, one of the targets in the legal sector is to reform Rwandan laws to ensure business competitiveness. Considering that Rwanda is a Member of the East African Community (EAC), it is obvious that there are many commitments across all EAC Instruments which the country needs to comply with. Under the Harmonization and Approximation of national laws, the Republic of Rwanda has made significant step by harmonizing various laws for smooth implementation of the Common Market Protocol: Immigration, Labour, Contract, Competition, Intellectual Property, Investment, Company and Insolvency Laws.

The harmonization of the above laws has made considerable impact not only in relation to Rwanda compliance with her EAC Treaty obligations but also in creating a stable, predictable environment for doing business and attracts both national and foreign investment.

In addition, through its coordination role, MINEACOM has also facilitated the participation of Rwanda in the development of EAC Protocols and Acts of the Community which are critical to the attainment of the EAC integration objectives for Rwanda.

Financial mobile services and inter-operability

There has been successful integration of mobile money platforms among the telecommunication companies in Rwanda, Uganda, Kenya and Tanzania. There is a good flow of transactions between MTN Rwanda-MTN Uganda-SAFARICOM Kenya; TIGO-TIGO Tanzania and Airtel Rwanda -Airtel Tanzania. This facilitates cross-border business opportunities, exports and closer ties between friends and family.

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East African Payment System

The East African Partner States Central Banks launched the East African Payment System (EAPS) on 16th May 2014. EAPS is a secure, effective and efficient funds transfer system that enhances efficiency and safety of payments and settlement within the EAC region. The systems operates on a real time gross settlement basis by utilizing the linkage between the various Partner States’ Real Time Gross Settlement systems using SWIFT (Society for Worldwide Interbank Financial Telecommunication) messaging network for safe and secure delivery of payment and settlement messages to each other.

EAPS has therefore increased efficiency and facilitates cross border transactions that is essential for boosting intra-regional trade among the East African Community

EAPS like any other real time gross settlement system has many benefited users. For example,  real time funds transfers, safe and efficient transfer of large value payments, enhanced safety of funds transferred through the utilization of SWIFT infrastructure, finality and irrevocability of payments, increased accessibility as EAPS is available in all the commercial banks’ branch networks, and same day settlement.

EAPS uses local currencies of the East African countries including the Kenya Shilling, Tanzania Shilling, Uganda Shilling, Rwanda Franc and Burundi Franc. In addition, it reduces the cost of transactions as well as the cost of doing business in the region.

Environment and Natural resource Management:

Considerable achievements from projects negotiated under EAC arrangements have positively impacted Rwandans’ lives. Among them is the implementation of Lake Victoria Water Supply and Sanitation Programme - Phase II (LVWATSAN II) since 2012 in Nyagatare, Kayonza and Nyanza Districts. This programme helped Rwanda citizen in the municipalities of Nyagatare, Kayonza and Nyanza to be supplied with water through the construction of Water Treatment Plants in Nyagatare (Umuvumba River); Kayonza (Lake Muhazi on Rwamagana side); and Nyanza (Bishya Dam). These new Water Treatment Plants have the capacity to supply water to more than 150,000 people. Apart from that; the Feacal Sludge Treatment Plants and Landfills have been built in all these three municipalities with aims of enhancing sanitation service.

Further, is the implementation of Lake Victoria Environment Management Project - Phase II (LVEMP II) since 2011. This project is being implemented in 15 Districts of Rwanda and the project’s main components are (i) Strengthening Environment Sustainability through Capacity Building; (ii) Pollution Control; and (iii) Watershed Management. Direct Beneficiaries are people who being employed through Co-management Interventions and Community Driven Development sub-projects where more than 10,000 people are benefiting through the cooperatives established.

Agriculture and food security

With the vision of a competitive and prosperous agriculture sector in East African Community, an EAC Comprehensive Africa Agriculture Development Programme (CAADP) Compact was signed in June 2017. The priorities of the programme focus on considerations for accelerating agricultural growth and transformation, that targets:- increased agriculture production and productivity; increased intra -regional trade and better functioning of national and regional markets; expanded local agro-industry and value chain development inclusive of women and youth; increased resilience of livelihoods and improved management of risks in agricultural sector; and improved management of natural resources for sustainable agriculture.

EAC Regional centers of Excellence

Under the EAC Health Research, Policy and Health Systems Development, five health center of excellence have been established and hosted by Partner States, the University of Rwanda, School of Public Health, is the host of the   Regional Center of excellence on Immunization, Vaccines and Supply Chain Management. The Center serves the whole region specifically in the area of Immunization, Vaccines and Health Supply Chain Management training.

The center of Excellence has called for applications from relevant Public Sector Partners involved in Health Care Policy, Financing, Provision, and Research for a two year Master’s Program in Health Supply Chain Management that will commence in October 2017.  

More Opportunities

Both Rwandan traders and consumers attest to the importance of open borders in ensuring constant flow of supplies and mobility of labour. Agnes Muteteri, a resident of Ryabega sector of Nyagatare district, a retail shop keeper, says that although she cannot quantify the benefits she has acquired in the East African Community and the free movement of goods, she observes that different varieties of goods are flowing to the Rwandan market and those that export to Uganda do so without hurdles.

Nteziryayo Emmanuel, a resident of Ryabega, says that free movement of goods and labour must be having a bearing on the stability of commodity prices. “Here, much of the cooking oil and soap we use is imported from Uganda. These are very essential commodities whose prices have been stable for a long time,” he says.

Nteziryayo, however, says there’s a need to link ordinary residents from the member states of EAC through cooperatives so that they can trade in bigger volumes to reap bigger advantages.

“If we have a cooperative here in Nyagatare dealing in bee keeping, honey harvesting, processing, packaging and exporting, why can’t the governments link us to a cooperative doing the same activities in Kenya or Burundi so that we produce in big quantities and get big markets from the Western world. We should even have more study tours so that we learn from and share experiences with other people in the region; whether farmers, traders or cattle keepers. It will even create and strengthen our brotherhood,” notes Nteziryayo.

Embracing integration

Some citizens talked to, however, pointed out the issue of awareness about the opportunities presented by the East African Community to be ambiguous and not fully elaborated and embraced.

“Ordinary Rwandans, the farmers, are mainly concerned with what they do in their vicinities, their gardens and incomes, with little attention given to what the East African Community integration brings to them. Yet some of these farmers produce more than what they consume and if they were to form cooperatives and export the excess to, say, Southern Sudan, it would make a whole world of difference in their household incomes,” considers Joseph Gashugi, a teacher, resident in Nyamata, Bugesera district. There is therefore a need for further awareness and sensitization of ordinary Rwandans.”

Outreach programmes

As part of the Ministry’s strategic objective of strengthening and deepening the understanding of, and commitment to EAC integration in Government, private sector, civil society and public, the ministry has been carrying out sensitization activities based on the Ministry’s communication strategy that was developed and approved in 2011 to strengthen and deepen the understanding of EAC integration.

Thus since 2010, in November ever the years, the Ministry organizes an annual EAC Week to conduct intensive sensitisation and outreach activities such that Rwandans can fully exploit the EAC regional integration benefits and opportunities available.

The Ministry also organised sensitisation sessions for women leaders from public, private and civil society organs and institutions on EAC gains. In September 2016, more than 1,000 women leaders from different sectors were convened in their respective districts and provinces do discuss on how Rwandans can tap in EAC integration gains and opportunities.

The Ministry also over the years conducted targeted sensitization sessions with secondary schools; Universities and higher learning intuitions. Inter-University debates were held to educate youth in schools and universities at an early age.

In a bid to honour commitments made by Rwanda under the EAC, Legal Advisors from public institutions were enlightened on key principles within EAC legal instruments to enhance law reform. Through its coordination of EAC activities mandate, the Ministry organized several sessions to empower Legal Advisors from Public Institutions with skills to identify Non-Conforming Measures in existing laws and skills to draft laws without further Non Confirming Measures that may impede the implementation of the EAC Common Market Protocol.

With the right legal instruments in place, agreement on priority projects, with a highly attractive region to domestic and foreign investment, a dynamic and very young population, a shared goal of prosperity and security for all EAC citizens, we now need to focus on accelerating implementation of agreed decisions/projects and reap even higher benefits than in past 10 years!