UN urges EAC to liberalise trade services to spur manufacturing sector

Part of the Special Economic Zone in Kigali. File photo.

The United Nations Economic Commission for Africa (UNECA) on Monday urged the East African Community (EAC) to liberalise trade in professional services in order to spur growth of the manufacturing sector.

Stephen Karingi, the Director of Capacity Development Division at UNECA, told Xinhua in Nairobi that the region’s manufacturing sector is not as competitive as it should be due to relatively high cost of services including in the insurance, legal, logistic and finance sectors.

“There is empirical evidence that efficiency gains occurs when markets are opened up. The EAC will further its industrialisation agenda if it can access cheaper services from a liberalised market,” Karingi said on the sidelines of the Fifth Common Market for Eastern and Southern Africa (COMESA) Annual Research Forum.

EAC member states include Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan.

Karingi called for the partners of the trading bloc to amend their national laws so that they permit free movement of professionals across the region.

He said that the region has already signed the EAC Common Market Protocol which calls for free movement of capital and labor but implementation has not been completed.

Karingi said that for every manufactured good, there is an element of services input which must be procured at a competitive cost in order for merchandise to compete regionally and globally.

He noted that the EAC is one of the most integrated regions in the continent.

He observed that intra-EAC trade has been increasing primarily because Uganda and Tanzania have been increasing their exports to the rest of the region.

This comes at a time when its emerging that Common Market for Eastern and Southern Africa (COMESA) is losing at least millions of dollars annually in trade due to trade barriers arising from protectionism policy.

Road blocks, lengthy customs procedures and administrative requirements are some of barriers hindering free flow of trade in the region that has the potential to make at millions of dollars annually. .

Last year, intra- Comesa trade dropped by 1.76 per cent to Sh2.1 trillion compared to the previous year. 

Xinhua

 

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