Britain’s Thursday referendum vote to leave the European Union is a wake-up call to the East African Community (EAC) to make its integration agenda more people- centered. This is a general view shared by, among others, MP Dr James Ndahiro, an economist who is one of Rwanda’s nine members in the East African Legislative Assembly (EALA). David Cameron announced he was stepping down as British Prime Minister after Britain voted to leave the EU. Cameron said “there can be no doubt about the result. The will of the British people is an instruction that must be delivered.” He said it would be for the new Prime Minister to begin a negotiation with the European Union, and to start the formal and legal process of leaving the EU. In a statement yesterday, William Gelling, the British high commissioner to Rwanda, said: “We will not speculate on potential political developments in the UK at this stage. We are however certain that the UK-Rwanda relationship remains strong, and we will continue to work together closely.” Dr Ndahiro told Saturday Times that what happened in the UK is “a blow to the integration language.” “It means we should have a clear conversation between politicians and the people on what exactly we want from integration. It shows disconnect between government agendas and people’s aspirations,” Ndahiro said. “It’s a wake-up call to make EAC integration agenda fully people-centred if we want to avoid being hit by what has happened in the EU.” He said results of the UK referendum are a “clear demonstration” that people have always to be taken on board in the integration process. The referendum was not timely as UK and EU politicians should have first negotiated their differences, he added. Results from the referendum showed an outcome that sets the UK on an uncertain path as 51.9 per cent (17,410,742 votes) voters opted to exit and 48.1 per cent (16,141,241 votes) sought to remain. East Africans also took to Twitter to express their views; noting that the Brexit is a lesson for the EAC. Under the Political Federation, the fourth pillar and ultimate goal of EAC integration, EAC partner states envisage coming together to form a super-state under a single political authority or government. EAC Secretary General Libérat Mfumukeko tweeted that, “Brexit affirms the need for deeper integration.” Eugene Ngumi, a Kenyan who is an associate consultant at Africapractice, a leading pan-African advisory firm, said the “EAC needs to learn from Brexit.” Asked what he thinks the Brexit means for the region, Ngumi told Saturday Times that, politically, there are two key implications. First, he said, the Brexit “calls in to question the efficacy of regional unions which the EAC must address.” And, most importantly, he said, it is a warning sign to the EAC. “The fundamental problem of the EU is it’s too disconnected from the common man. When it was just an economic and trade union, that was fine, but as it becomes more political it is not sustainable. Common complaints of Brits included faceless EU bureaucrats, opaque rules and process, among others, Ngumi said. “Same goes for the EAC. If they stick to trade and customs, they are fine, if they start getting political power the structures and accountability will have to change. If the EAC wants to become a fully-fledged economic and political union it needs grassroots buy in.” John Hilary, executive director of UK Charity, War on Want, and author of The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next, seems to agree that the political elite in Europe got things wrong. “The vote in favour of Brexit has been a rejection of the EU’s vision of a world run by and for big businesses. It is also a rejection of the European political elite and their contempt for ordinary people, clearly seen in the promotion of the EU-US trade deal, TTIP, in the face of massive public opposition,” he is quoted saying. The Transatlantic Trade and Investment Partnership (TTIP) is a comprehensive free trade and investment treaty currently being negotiated – in secret – between the EU and the US. “The EU must now take a long, hard look at itself and consider a fundamental change of its policies in favour of social justice. If it seeks to continue as if nothing has happened, it will disintegrate.” Economic implications Asked about the possible consequences of the Brexit on the Community, Ndahiro explained that there will “not be much.” He thinks there will be no direct financial impact on the EAC because donor support to the bloc had already started going down before the referendum. “And again, the way in which donor support was given was based on bilateral relationship with EAC,” he said. In October 2014, the EAC finalised negotiations for a region-to-region comprehensive Economic Partnership Agreement (EPA), covering trade in goods and development cooperation, with the EU. The deal, which is in line with the EAC Common External Tariff, supports the EAC’s ambitious regional integration project and is expected to be signed and ratified by October 2016. Ndahiro thinks this agreement will have to be renegotiated with the UK if the latter is interested. Ndahiro is one of those who oppose the EPAs on grounds that “it is one sided” and countries in the region do not have a competitive edge given their small industrial base, among others. He has often emphasised that, for example, EU countries spend more than Euros 90 billion on agricultural subsidies and, as such, EAC agricultural products that are not equally heavily subsidised cannot compete fairly. On the other hand, Ngumi says, the signing of the EPAs is “not technically affected,” as the EU Commission “who we negotiate and sign deals with” is still the same. “So, the EAC can and should sign the EPAs in October as that would ensure access to the common market, albeit without Britain in two years.” “What we will have to do over time is negotiate a new deal with the UK.” There is a transition period of two years, he explained, so there should be time to, at the very least, get a framework in place. “In this instance I would urge the EAC to negotiate as a bloc, the UK will be somewhat desperate to ink trade deals and prove that Brexit can work and if we negotiate as the EAC, we should be able to get a much better deal,” he said. The other risk is the long-tail risk, Ngumi added, noting that the Brexit could trigger a UK recession and a wider EU recession. “The EU and UK are two of the EAC’s biggest export markets. For instance, Kenya exports flowers, coffee, tea and others. A recession in either or both may trigger an economic slowdown in east Africa.” Kenya’s Treasury Secretary, Henry Rotich, yesterday said that while officials there are keenly monitoring events in Britain, the country is adequately buffered against any possible immediate external shocks arising from the vote. Meanwhile, a petition calling for a second EU referendum has been launched as some in the ‘Remain’ campaign call upon the Government to implement a rule that, if the Remain or Leave vote is less than 60 per cent based on a turnout less than 75 per cent, there should be another referendum. The petition had by press time reached than 77,000 signatures. ***** UNWISE MOVE A section of EAC public think that the UK vote was ill advised. Josephat Bosire Kerosi (PhD), a senior lecturer of Finance and Management at the University of Kigali’s School of Graduate Studies, said it is a “very unwise move to a large extent.” “Politically, Scotland should be given its independence before the Brits start demanding for the same. That vote will make Britain’s position as a peace broker around the world diminished,” Bosire told Saturday Times. “Britain is a big market for food from Spain and France and cars from Germany. These countries will still need Britain. However, human resource from these countries wont have it easy travelling and working in Britain as before, thus a human capital flow strain in Britain will be felt.” editorial@newtimes.co.rw
