The private sector has urged East African Community (EAC) Heads of State to direct relevant government bodies to fast track the admission of the DR Congo into the regional bloc. This is one of the items on the wish list of the East African Business Council (EABC) — a grouping of regional private sector associations and corporates – ahead of the Head State Summit scheduled for Saturday, February 27. Congolese President Félix Tshisekedi on June 8, 2019, wrote to the EAC Chairman, President Paul Kagame of Rwanda, expressing his country’s wish to be a member of the regional bloc, which is currently made up of Rwanda, Burundi, Uganda, Kenya, South Sudan and Tanzania. Peter Mathuki, the Chief Executive of EABC says that DR Congo offers a large market for small and medium enterprises in the region. “It (DR Congo) will in turn benefit from the larger EAC Common Market and Common External Tariff Framework,” he said. According to a study conducted last year on the opportunities for trade in the DR Congo, the value of goods imported in the DR Congo in 2019, stood at $6.6 billion. However, EAC exports to the DR Congo in the year before, stood at $855.4 million. China remains the major exporter of goods and services to EAC with a market share of 31.2 per cent against DR Congo’s 11.5 per cent. The EABC has also urged regional political leaders to embrace a coordinated approach in responding to the Covid-19 pandemic, adopt the open sky policy and come up with solutions to persistent Non-Tariff Barriers (NTBs). This, the business executives argue, will improve the business environment and accelerate the recovery of the regional economy, which is currently battered by the Covid-19 pandemic. Finalisation of the comprehensive review of the EAC Common External Tariff (CET), harmonisation of EAC domestic taxes and tapping into the African Continental Free Trade Area (AfCFTA) are also some of the key issues the private sector is keen on. The private sector has tabled these matters to the Council of Ministers among the issues they wish to be considered in the Summit. The CET is a uniform tax adopted by a common market and is often assessed on imports from countries outside the market. Local manufacturers have in the past called for a review of the regional CET arrangement, arguing that it does not support production and is making them less competitive. According to the private sector body, the reviewed EAC CET is expected to encourage more value addition and protect priority value chain sectors in the region. Uncoordinated approach on Covid-19 According to the regional body, an uncoordinated approach on the Covid-19 pandemic has brought forth new trade barriers leading to congestion at EAC border points, increased cargo transit time and escalated the cost of doing business. For instance, it is noted, “cargo transit time more than doubled” in the Northern corridor between January and September 2020. Manasseh Nshuti, Minister of State in charge of EAC affairs, has told The New Times that the Covid-19 pandemic situation which has constrained regional countries in various ways “and created what I can call non-tariff barriers” will certainly be at the centre stage when the leaders meet on Saturday. It is also noted that intra-EAC trade contracted due to pandemic and is exacerbated further by the persistent NTBs related to Rules of Origin and import bans that continue to deny market access of products made in the region. “We urge the EAC Heads of State to direct relevant Government bodies to fast track bilateral and diplomatic engagements to solve these persistent trade disputes and NTBs and finalize the operationalization of the EAC Trade Remedies Committee. This will improve intra-EAC trade and economic resilience amid Covid-19,” said Mathuki. According to the EAC Trade and Investment Report of 2018, total EAC exports decreased by 4.7 per cent to $14 billion in 2018 from $ 14.7 billion in 2017 of which, intra-EAC exports accounted for 22.4 per cent. The trade deficit for the EAC region increased by 39.4 per cent to $24.3 billion in 2018 from $17.4 billion registered in 2017. Strengthening of regional value chains is paramount as Covid-19 disrupted the global supply chains hence necessitated manufacturers to rely more on the region to source raw materials and inputs, Mathuki said. Air transport Implementation of the open skies for cargo in the region, Mathuki said, will increase connectivity, improve consolidation and boost export of fresh products (horticulture and fish) to international markets amid the pandemic. Airspace liberalisation between five regional countries of Rwanda, Uganda, Kenya, Tanzania and Burundi could result in an additional 46,320 jobs and $202.1 million (Rwf164.5 billion) annually in GDP, according to a September 2016 policy briefing by the EABC and the East Africa Research Fund (EARF). The regional body is also calling for the implementation of the EAC regulations on liberalisation of air transport services to reduce air ticket and freight costs. With the AfCFTA now in force, the private sector is calling for the finalization of EAC remaining tariff offers and ratification by all partner states to take advantage of the 1.3 billion people market. One Network Area In addition, the private sector is also calling for the adoption of the One Network Area (ONA) model by all Partner States to reduce the high cost of telecommunications in the region. The ONA is an initiative that establishes borderless mobile network coverage across the region and treats subscribers moving between the partner states as local subscribers that can make and receive calls at standard local call rates. Initially, Burundi and Tanzania failed to embrace it, something that regional lawmakers tried to understand. Rwanda, Kenya, Uganda and South Sudan signed up. Lately, sources say, the two other countries could sign up soon.
