Slow pace of integration worries EAC business executives

Cargo trucks involved in cross-border trade. Experts say that delays in implementing regional protocols derail integration. Nadege Imbabazi.

Business executives and experts from the East African Community region want policymakers from member states to fast-track the implementation of protocols that have been agreed upon if full integration is to be attained.

The EAC region signed a raft of protocols, among them, the Customs Union, Common Market, Monetary Union as well as the Political Federation.

However, the delay to implement some protocols by some member states has become a source of concern for business executives and analysts in the region.

Experts say that the slow pace at which the protocols are being implemented could hurt business, free movement of goods and people as well as the entire integration process, and called on partner states to urgently undertake legal and regulatory reforms.

For instance, while the region should promote free movement of goods, Kenyan traders say they pay a 25 per cent levy on confectioneries exported to Tanzania.

This is because Tanzania says it is not satisfied that the industrial sugar used to manufacture sweets, biscuits and chocolates from Kenya is not zero-rated in terms of import duty, according to officials.

Lillian Awinja, the outgoing Chief Executive Officer of the East African Business Council (EABC), said that, despite the protocols in place and the progress registered so far, their implementation is moving at a slow pace, derailing the integration process.

“We need to consolidate and make sure that we have an operational customs union. The way we are operating, there is a lot that is not working, there are decisions we make and negate the fact that we are in a customs union,” she said.

She added that as EAC moves towards establishing a monetary union, member states should reflect on why the implementation of common market is not smooth.

“There are a lot of bottlenecks, there are still non-tariff barriers and they are growing without being resolved,” she added.

According to Adrian R. Njau, a trade and policy expert on EAC, from a political perspective, every country is working on its own, making it harder for full integration to be achieved.

“I don’t know how these good initiatives will survive the political environment that is within the region,” he said.

Integration not an easy process

Richard Othieno Owora, the Head of Communications at the EAC secretariat, said the ultimate agenda was having a political authority that is committed, which he said is there and the rest will be achieved. It is a matter of time, he says.

“We are aware of each issue in each partner state and we have a specific desk which handles political issues of integration agenda and it is also at the highest summit level, these individual happenings in the partner states will not override what integration agenda is about,” he said.

He added: “That is why we are pushing for this political consolidation which partner states have agreed to, beginning with political confederation towards political federation,” he added.

Trade decline

According to official figures from EAC Trade and Investment Report, regional trade dropped by 19.5 per cent to $44.6 billion in 2016 from $55.4 in the year before.

The region has also been registering very low inflows of Foreign Direct Investment (FDI). Regional FDIs amounted to $6.7 billion in 2016 while it averaged about $9 billion in the previous three years, according to officials.