When the Treaty for the establishment of the East African Community was signed in November 1999 and thereafter enforced in July 2000, it heralded a new dawn for the people of this region after efforts to form a political federation collapsed in 1977.

Since then, the presidents of the five member states — Kenya, Uganda, Tanzania, Rwanda and Burundi — have gone into overdrive to ensure that the objectives of this union become a reality.

Such conviction was clear when Kenya’s President Uhuru Kenyatta and his Rwandan counterpart Paul Kagame took stock of the state of the EAC and expounded on their vision of the integration agenda during the just concluded 2014 East African Business Summit in Kigali, Rwanda.

As I moderated the panel session where the two presidents tackled the various issues, opportunities and challenges facing the region, the thirst for a seamless bloc was visible, coming from the political leaders as well as the hundreds of EAC captains of industry present.

One unique aspect that the EAC has expressly confirmed is the crucial role of the private sector and civil society. Article 7 of the EAC Treaty states that the principles that govern the objectives of the community shall be “people-centred and market-driven.”

By 2020, measured by the size of population, the East Africa region will be equivalent to the seventh largest country in the world. As such, the region must prepare its business and political environment for the coming challenges and ooportunities.

According to the World Bank’s latest Doing Business Report (2014), the EAC economies have an average ranking on the ease of doing business of 117 (among 185 economies globally). But there is great variation among them — from Rwanda at 52 in the global ranking to Burundi at 159.

This wide variation in business regulations is among the issues that the EAC needs to tackle to achieve the desired level of integration. The growth of the EAC economies is hinged on the removal of critical obstacles to entrepreneurial activity by all stakeholders in the region.

Apart from the need by the EAC economies to create an enabling environment for doing business, some other key elements need to be harmonised to ensure uniform multisectoral development:

The EAC member states have continued to lag behind in terms of human resource development and mobilisation. The absence of uniform labour laws has seen the region lose great minds as a result of brain drain to its competitors; restricting work permits to highly skilled workers, exorbitant permit fees and tedious documentation processes are among the factors stifling free movement of labour within the East African bloc.

Presidents Kagame and Kenyatta were categorical on the bitter pill citizens and governments in the region must swallow to achieve full integration. They termed as “primitive and unfounded” fears that opening up domestic job markets to regional job seekers would erode opportunities for nationals.

To quote President Kagame, “We do have unwarranted worries. We have experimented with this in Rwanda. When we opened our borders, removed restrictions on work permits and visas, everyone benefited… It is about leaders making decisions and involving the people.”

So a lot of work still needs to be done to make free movement of goods, capital and labour across all partner states a reality.
KCB, as a regional business with footprints in all the EAC countries and South Sudan, believes that the removal of trade barriers across all EAC countries will go a long way towards facilitating regional commerce and driving economic growth.

Labour market demands have changed over time; to facilitate free movement of human resources, harmonisation of education curricula, standards and assessment needs to be made a priority issue.

With agriculture being one of the region’s most important sectors, accounting for about 44 per cent of GDP in Burundi and Tanzania, 30 per cent in Uganda, 24 per cent in Kenya and 38 per cent in Rwanda, the EAC economies still face serious supply constraints on competitive agricultural production, ranging from poor road infrastructure to high energy costs.

Investment in value-addition for agricultural products as well as increasing labour productivity are thus another priority issue.

The extractive and manufacturing industries remain the economic bedrock for many developing countries, generating revenues, foreign-exchange earnings and surpluses to finance development. Most industrialised nations have witnessed exponential economic growth as a result of prudent use of minerals resources.

Flagship projects like Base Titanium’s Kwale Mineral Sands project, and the discovery of oil reserves by Tullow Oil and Africa Oil in Uganda and northern Kenya, signal the strong potential for growth in the sector with the possibility of creating thousands of jobs for local people and generating revenue.

It goes without saying that the ICT sector plays a significant role in the development agenda of most sectors. The sector will definitely be a key growth driver in coming years. According to McKinsey & Company estimates, the overall telecommunications sector in EAC has experienced explosive growth since 2003 with the telecommunications market in the region witnessing tremendous growth in the past decade, thanks to the expansion of the mobile telephony sub-sector.

Even though EAC member countries have committed to investing in ICT as an important part of their national growth plans, there are variations in government involvement within each country, hence the need for an integrated policy framework by the East African Community Secretariat. 

Investment in innovation has changed the way East Africans do business and operate. With mobile money, Internet banking, agency banking and lifestyle products such as Biashar@Smart, which KCB has created in partnership with Safaricom, more people in East Africa now have access to financial and advisory services. 

At KCB Group, we have contributed immensely to the development of the EAC given that we have a presence in all the EAC members states, employing more than 5,300 employees and extending loans worth over $2.5 billion in the past one year.

Joshua Oigara is the chief executive of KCB Bank Group.