Uganda’s President Yoweri Museveni and Kenya’s President Mwai Kibaki last week appeared to differ over the path to regional integration.

Opening the Third Meeting of the Fifth Session of the East African Legislative Assembly in Kampala last week, Museveni also appeared to be easing up on his push for a political federation, when he said, “Political federation is more rational.

Where it is not possible, then compensatory mechanisms must be worked out [to avoid] a situation that will bring disequilibrium, resentment and break-up of the community.”

Kibaki, for his part, also addressing the EALA meeting, urged member states to fully open up and implement the already concluded stages of the integration process.

Museveni argued that if the political federation did not materialise, the option of compensating EAC countries that have incurred revenue and business losses from the economic integration should be prioritised.

Kibaki said EAC states must fully implement protocols that are already in force, but have been a bone of contention between the partner states, particularly Tanzania, over the application of the Customs Union Common External Tariff.

The Common Market protocol has also met with reluctance from Tanzania, which insists it will not comply on the rights of establishment, land and residency, an issue that Kibaki visited.

“The focus in this area should be on ensuring adherence to the agreed commitments in the Protocol… We should also fast-track the transposition of national laws that contradict the Common Market spirit,” he said.

Kibaki said deepening and widening the integration of the bloc was dependent on the development of modern infrastructure, which is critical for industrialisation and free movement of the people and goods. He said more emphasis needed to be placed on upgrading the current railway network and extending it to other parts of the Community, as well as on finding solutions to power shortfalls. 

Analysts of regional politics say that in proposing a mechanism for compensation, Museveni was sending a message to Kenya that its economic dominance does not sit well with poorer partners Uganda, Tanzania, Rwanda and Burundi, who have allowed free movement of goods and services at the expense of lost sources of revenue. This is a significant shift in position for Museveni. 

“He is beginning to think that a political federation is not within reach, given that the other heads of states seem not to be on the same page with him on the issue,” said Dr Abed Bwanika, president of the People’s Development Party. 

The Third Meeting of the Fifth Session of EALA opened on January 22 and will go until February 6; while Museveni officiated at the opening ceremony on day one, Kibaki made a State of the EAC address on day two.  

Museveni believes that implementing the Common Market protocol without accompanying political federation will turn some countries into captive markets for other partners’ goods, and will not open up opportunities to share resources.

The cure, he observes, is to offer compensation.

This is not a new tool in integration processes.

The Common Market for Eastern and Southern Africa (Comesa) uses compensation mechanisms to keep its membership intact.

In recent years, for example, Rwanda and Burundi have been recompensed by the Comesa compensation fund for tax revenue lost as a result of the two countries acceding to and implementing the Comesa free trade area. The European Union finances Comesa’s compensation fund.

Political federation is the fourth and last stage in the EAC integration processes. So far two stages — the Customs Union and the Common Market — have been concluded. The third stage is a monetary union, currently under negotiation, to be followed by political federation.

Sovereignty hurdle

However, member countries are reluctant to surrender their sovereignty, and the Common Market and Customs Union face numerous implementation hurdles. On top of that, the member states are still dragging their feet on the operation of the East African Court of Justice, which is expected to be the last appellate court in the region.

Importantly, analysts say the member states have not done enough to bring their citizens on board and to demonstrate the benefits of the community. For instance, free movement remains an issue, though it is a relatively easy way to let people realise the benefits of integration.
“Option B — compensation — will keep the integration process moving, but it appears member states’ priorities are not the same. I do not think we are going to go into a federation without a referendum,” said Prof Venansius Baryamureeba, Vice Chancellor of Makerere University.

Critics warn that if the leadership does not urgently address critical issues, the integration process will be derailed.

“We want the integration to move faster, but only after solving all the problems.

The presidents are the ones in power and should act to resolve these problems,” said Maj- Gen Mugisha Muntu, an EALA MP, referring to the failure to build regional consensus on the implementation of the Customs Union and Common Market and using the EACJ as the last court of appeal.