The East African Community Secretariat has sent a team to Rwanda and Uganda to find out the cause of the current hostility between the neighbours.
EAC Secretary-General Liberat Mfumukeko said the bloc will “soon” engage the two countries in an effort to seek a solution to the diplomatic and trade dispute that threatens to paralyse cross-border business.
“Our experts are in Rwanda and Uganda on a fact-finding mission, and we will have a report soon. From that report, the EAC will engage the partner states. I cannot give a timeframe, but it will be within the next few days,” he told The EastAfrican in Nairobi this past week.
Mr Mfumukeko blamed the decline in intra-regional trade on political disputes, tariffs and non-tariff barriers to trade, non-conformity to certain measures and the slow pace of the review of the common external tariff.
He called on partner states to find solutions to their disputes, saying that whenever goods cannot move, businesses suffer.
“Our role is to make sure the countries abide by their commitments, and all partner states have signed the Common Market and Customs Union Protocols. We are reminding them that when goods are stuck they are breaching these protocols,” he said.
Businesses in the region have incurred huge losses in the past three weeks following the partial closure of the border crossing between Uganda and Rwanda at Gatuna, as relations between the two countries soured.
The escalating tensions prompted Kenya’s President Uhuru Kenyatta to engage in shuttle diplomacy, On Monday, he travelled to Kigali and held talks with Rwandan president Paul Kagame.
He then stopped over in Kampala on his way back to Nairobi, where he held discussions President Yoweri Museveni.
"We are faced with some challenges as neighbours and as a region. Through goodwill and good intentions, we will resolve these challenges," President Kenyatta said in Kigali.
The region’s business community is concerned that differences between partner states are increasingly threatening integration at a time when member countries are operating at cross-purposes on trade, amid rising protectionism.
Nick Nesbitt, East Africa Business Council chairman, said that any time there is a problem with one border, it affects the others.
“We need to understand what is happening and the political issues involved,” he said “The EABC wants the issue resolved in the spirit of protecting the EAC Treaty and in line with the Common Market Protocol, which guarantees free movement of goods, persons and services.”
Resolving disputes and fostering trade and business-friendly policies are key to increasing trade in the region.
NTBs have been a major impediment to intra-regional trade, which accounted for just 7.7 per cent of imports and 18.7 per cent of exports in the region, amounting to $47 billion in 2017.
Tanzania has been accused of using NTBs as protectionist measures either through denial of Community tariff treatment, discrimination against other countries’ products, charges of equivalent effect and bans of transfer or import of EAC products.
Kenyan manufacturers say that Tanzania has introduced NTBs on motor vehicles, lubricants, tobacco products, confectionery, edible oils and printed labels.
Kenya’s exports to the region continue to decline year on year, falling from about $1.3 billion in 2011 to $1.1 billion in 2017.
“The EAC is perhaps the only economic bloc in the world that has been successful in trading globally without learning first to trade with itself. It defies all the promises supposedly offered through regional integration efforts,” said Victor Ogola, EABC head of policy.
He added that in spite of the growth in trade and investment across the region, trade among the EAC partner states has fallen by 13 per cent in the past three years.
Intra-regional trade in the EAC stands at about 26 per cent, a level that is low compared with other blocs across the world.
Apart from NTBs, companies are also concerned about the high number of NCMs, currently at 57 and cutting across various services sectors.
NCM is any law, regulation, procedure, requirement or practice that violates certain articles of the investment agreement.
Tanzania, Kenya, Rwanda and Uganda have maintained the highest number of NCMs at 27 per cent, 24 per cent and 17 per cent of the total number of restrictions respectively.
Of these, about two thirds of the restrictions are in professional services, followed by road transport at 25 per cent, and telecommunications and the distribution sector, both at two per cent.
Mr Mfumukeko said that he hopes that consensus in the review of the bloc’s CET will be achieved.
“Technical experts are discussing the different national positions with the aim of combining ideas on how the CET should be reviewed. The proposals will be taken to the Council of Ministers, and eventually there will be consensus,” he said.
“At the Secretariat, we are supporting the private sector and we are engaging more. This is because the EAC Treaty establishes that the Community should be market-driven, but the reality on the ground is that many young people are unemployed.
“We want to ensure there is job creation. This can only happen if companies hire people and if we get new firms coming into the region, whether by local or foreign investors.”