Regional trade hits $2.7m, just 5 years into Customs Union

Last year, they recorded a 26.6 per cent growth, compared with 2007.

But the tide is set to change next year as the Customs Union ends years of transition and transforms into a fully fledged Customs Union.

The main feature will be that goods imported from Kenya will immediately attract zero Customs duty across the entire region, including in Rwanda and Burundi, which acceded to the EAC Customs Union on July 1 this year, says the EAC Council of Ministers chairperson Monique Mukaluriza.

Kenyan goods have continued to attract various taxes during the five-year transitional period as the country’s economy is far stronger than all the others.

It is expected that over the past five years, the private sector in other partner states has made full use of this grace period.

Uganda Investment Authority Board chairman Patrick Bitature says it is not wise for the business community to moan about integration challenges, with tariffs falling to zero and the Common Market Protocol taking shape.

Instead, business people should have done their homework during the transition.

The scenario of shoe company Bata is a good example of repositioning oneself for the Customs Union.

The shoemaker closed its plant in Uganda in 2005 to concentrate on merchandising — with lines of shoes imported from Kenya, Pakistan and India.

Bata was selling a million pairs of shoes in 2005, and is now selling nearly three million pairs across 30 stores countrywide, says Nelson Mbwala, the company’s merchandising manager in Kampala.

Clearly, Bata saw the Customs Union as an opportunity and changed its business strategy.

While partner states also feared loss of revenue on acceding to the Customs Union, the audit shows otherwise.

On average, Kenya, Uganda and Tanzania have registered an average revenue increase of 30 per cent per annum due to higher trade volumes, production and investment flows.