Somalia entry to EAC is good for business

The East African Community (EAC) is lining up a group of experts to be dispatched to Somalia in December on a mission to assess the country’s eligibility to join the regional economic bloc.
Edward Ojulu
Edward Ojulu

The East African Community (EAC) is lining up a group of experts to be dispatched to Somalia in December on a mission to assess the country’s eligibility to join the regional economic bloc.

War-ravaged Somalia, located on the Horn of Africa, applied to join the EAC last year after Sudan and South Sudan. While Sudan’s application was flatly rejected on account of not sharing a common border with any member-country of the community and questionable democratic and human rights credentials, South Sudan’s bid was deferred to a later date.

Lately, South Sudan has participated in high-level meetings of the EAC as an “observer,” a clear indication that Africa’s youngest nation is on its way to becoming the sixth member of the EAC.

Oil-rich South Sudan’s admission into the EAC is of great value, but the most exciting of all will be Somalia.

Some commentators, including the national coordinator of the East African Civil Society Organisations Forum, Prudence Sebahizi, say that apart from boosting regional unity, Somalia has very little to offer economically at the moment. That is not entirely correct.

With a population of just about 10 million people who have lived under conflict for about two decades, it is very easy to discount Somalia as being of little economic value.

The EAC should however look at Somalia beyond its turbulent past and current conflict.

In fact, lawlessness that continues to dog the country should be reason for its faster admission into the EAC family.

East Africans strategic and business interest in ensuring that law and order returns to Somalia and the best and faster way to achieve this is through integration.

First, Somalia has a rich coastline that should provide great trade and tourism opportunities for the region. However, because of a breakdown in law and order, the Somali coast has turned into a den for pirates who continue to disrupt trade.

Three out of the five EAC member-countries are landlocked – not to mention South Sudan and large  parts of the Democratic Republic of Congo. These need safe access to international markets through the high seas, but insecurity on the coast simply makes the business of importing and exporting very costly for these countries.

Secondly, importers have in the past said that part of the reason prices of imports such as fuel sometimes increase in the region is because of insecurity caused by pirates from Somalia who have forced shippers to increase charges for delivering goods to Mombasa or Dar es Salaam ports. It is reported that shipping lines have had to invest in expensive security measures or to take longer routes off the coast of the Indian Ocean just to be out of reach by Somali pirates.

For example, a ship from Dubia that ordinarily takes six days to dock at the Port of Mombasa now spends over 12 days. This means more costs on fuel and crew. Yet it is the final consumer in Burundi, Rwanda, Uganda or DR Congo to shoul­der these extra costs.

As the risk of transporting goods increases because of insecurity on the high seas, insurance companies have also hiked premiums. Last year, importers reported that insurance cover had gone up by about $200 per container.

Pirates also cause delays in arrival of food relief for famine victims in the region; and disrupted distribution of food to millions of starving children and women in Somalia itself.

It will be easy to consolidate the relative peace in Somalia today through diplomatic and military means if the country became a member of the EAC. With a peaceful Somalia, hopefully pirates will have no place to base their banditry; trade will flow uninterrupted and all east Africans will be happy.

 

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