Advertisement

Slow execution of protocol hampering EAC growth - report

Saturday April 27 2013

Delays in eliminating trade barriers and a growing lack of understanding of integration among its citizens are testing the East Africa Community’s standing as the most progressive bloc in Africa, new evidence shows.

As such, the EAC — seen as a model for Africa — is experiencing fewer benefits than should arise from increased intra-regional trade, the African Union said in its latest assessment on the continent’s key trade blocs.

The report commissioned by the African Union Commission indicates that EAC is the most advanced bloc through the launch of its Common Market Protocol in 2010, but is facing enormous challenges in implementing it.

The success of the Common Market is also being held back by fear of losing tax revenue, continued existence of different rates of domestic taxes and multiple memberships to other regional economic communities.

The second most integrated trading bloc is Comesa, having achieved status of a Customs Union, while the remaining six blocs are either free trade areas or pre-free trade areas.

EAC’s experience in integration and institutions created is expected to provide reference to the other blocs’ efforts to enhance integration.  

Advertisement

The African Union is pushing other blocs to hasten integration towards building an interlinked strong African demand driven market and increasing intra-Africa trade.

Trade across the continent is dismal despite the potential to stimulate enterprise growth and employment creation and shield Africa from external economic shocks.

The report shows that from 2000 to 2010, intra-African imports were $29 billion with an annual growth of 14.4 per cent. Intra-African exports were $30 billion on average with an annual growth rate of 14.6 per cent. The intra-African imports represent an average of 14.2 per  cent of African imports; the intra-African exports represent 10.4 per cent of African exports.

The report has come out in time for the EAC Heads of State meeting set for April 28 in Arusha. The meeting will assess the progress of the pending protocols with a view to beating the 2015 deadline of implementing the Common Market Protocol.

The protocol, which calls for the free movement of goods, labour, capital and services in the region, came into effect on July 1, 2010, and was to be implemented over a five-year period.

During their 14th Ordinary Summit held in Nairobi last year, the Heads of State approved three protocols: the EAC Protocol on Peace and Security (dealing with cross-border crimes); the Protocol on Information and Communication Technology; and the Protocol on Sanitary and Phytosanitary Measures.

Last year’s summit also approved the implementation of a health initiative to improve reproductive, maternal, infant, and child health in the EAC partners states, in line with the goals of the global strategy for women’s and children’s health.

According to EAC experts, the Heads of State need to realise that many of the targets of the Common Market Protocol have missed their deadlines.

Richard Sindiga, Kenya’s EAC Director for Economic Affairs, said that although the region has recorded a large number of achievements in the protocol, more still needs to be done.

“Non-tariff barriers (NTBs) to trade, inadequate infrastructure, particularly roads, railways and energy have caused the high cost of doing business within the region, making it hard for partner states to implement the Protocol. The member states need to channel more resources and more investments towards infrastructural development in order to ensure all countries are at par,” said Mr Sindiga.

Last year 35 NTBs were unresolved, and 10 new NTBs had been reported; only 36 NTBs were resolved.  The main NTBs include lack of a single tourist visa and common passport in the region, the different rates of work permit fees, weighbridges, roadblocks, poor infrastructure, unnecessary delays at border posts, a lack of harmonised import and export standards, procedures and documentation.

By Christabel Ligami and Steve Mbogo

 

Advertisement