Why business, not politics is the way to go for EAC

In 1977, the East African Community, a promising regional body encompassing Kenya, Uganda and Tanzania and one which was clearly ahead of its time as a pioneer of regional integration was killed by politicians barely ten years after its birth. Turf wars between the presidents of Kenya, Uganda and Tanzania – who were then Mzee Jomo Kenyatta, Idi Amin Dada and Mwalimu Julius Kambarage Nyerere respectively – guaranteed that a regional body that was poised to push East Africa into the realm of developed countries in a few years was sacrificed at the altar of political expediency.
A Transit goods truck ready to cross the border at Gatuna. The New Times /File photo
A Transit goods truck ready to cross the border at Gatuna. The New Times /File photo

In 1977, the East African Community, a promising regional body encompassing Kenya, Uganda and Tanzania and one which was clearly ahead of its time as a pioneer of regional integration was killed by politicians barely ten years after its birth. Turf wars between the presidents of Kenya, Uganda and Tanzania – who were then Mzee Jomo Kenyatta, Idi Amin Dada and Mwalimu Julius Kambarage Nyerere respectively – guaranteed that a regional body that was poised to push East Africa into the realm of developed countries in a few years was sacrificed at the altar of political expediency.

At its height, the old East African Community (EAC) had given birth to an integrated approach to provision of critical goods and services for East Africans with viable and vibrant regional service providers such as the East African Railways & Harbours Corporation (EARH), East African Airlines (EAA) and the East African Post & Telecommunication Corporation (EAP&TC) which ensured smooth flow of goods, services and people across the region.

In those years, it was a great pride to be an employee of “the Community” as the EAC was simply and fondly known as. And for a moment, East Africans viewed themselves as regional brothers and sisters. With the collapse of EAC in 1977, negative ultra-nationalism set in among the former EAC members which, in turn, triggered a scramble for the remains of the regional corporations with little regard for economic viability. As such, each country was left with a little piece of the ‘carcase’.

Had it lived on, experts reckon that the original EAC would have pushed East Africa to become the Continental economic, diplomatic and political powerhouse; a position now occupied by South Africa. With so much water having passed under the bridge and many lessons learnt from the collapse of the old EAC, in November 1999, the new crop of East African leaders decided it was time to revive the Phoenix of East African Community. And a new body was born.

The new EAC today includes not just the original three members-Kenya, Uganda & Tanzania-but also Rwanda and Burundi. The focus of the new EAC has tried to move away from politics to business or what the Secretary General Dr. Richard Sezibera refers to as “a people centred and market driven regional cooperation”.

I have just come from attending an eye-opening meeting in Arusha where Trade Mark East Africa (TMEA), an initiative funded by development agencies to promote regional trade and economic integration signed a multi-million MoU with the East African Business Council (EABC), a regional lobby group for business community. This event is significant in several ways. First, it marks a clear departure from a situation where donors exclusively focused on government and government institutions as drivers of regional integration.

Indeed, it was clear from the experts who spoke at the ceremony that regional integration will be driven more effectively by active involvement and engagement of the private sector in policy formulation for EAC.

The partnership between TMEA and EABC, according to the Trade Mark East Africa CEO, Frank Matsaert, aspires to act as the catalyst that will enhance East Africa’s annual economic growth rate from the current 5% to an average of between 8% and 10% by enabling the business community to lobby EAC and government for improved infrastructure, removal of non-tariff barriers and a generally improved business environment.

Left to politicians alone, the new EAC would at some point, most likely go the way of its predecessor because, as someone once said, the only thing politicians learn from history is that they learn nothing from history. With a combined population of about 130 million people and a collective GDP of US$ 80 billion, East Africa is still a small market with an undersized economy in international terms. One thing that regional integration can do is to enhance cross-border sharing of human and non-human capital so as to spur greater economic growth for the region.

Presently the East African region still operates under archaic laws and systems that make unnecessarily complicated to for business community to engage in regional trade.

Trade experts estimate that were the port systems at Mombasa and Dar es Salaam to be improved so that the time it takes to import or export through the two East African ports was reduced by say 15%, the region would save about US$5.4 billion annually. This is the kind of money that goes down the drain every year as a result of unnecessary delays at the port of Mombasa and Dar es Salaam!

It is the kind of money that, if rescued from waste and utilised properly, can have a serious impact towards reducing the region’s high poverty levels.

What’s more, the business community in East Africa deposits an average of KShs 28 billion of its working capital daily as ‘bond payments’ for cross border trade. Again, this is capital that is unnecessarily tied up due to pointless regional bureaucracy.

Indeed, if the EAC and its partners live up to the ambition of making business the focal point of regional integration-and politicians continue keeping at bay- the East African region will resume its journey to becoming the economic, diplomatic and political powerhouse in the Continent.

This article was first published in Kenya’s Nairobi Star

Mwenda Njoka is the founder of Africa Centre for Investigative Journalism.

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