Integration: Business and people are ready, but not our leaders...
Sunday April 19 2009
Are East Africa’s nations ready for full integration?
Tanzania’s recent objections on the issues of land rights, use of ID cards and rights to residency — raised during the final round of negotiations on the Common Market Protocol in Kampala early this month — brought to the fore this critical question that the headlong drive towards integration seems to have overlooked.
If Tanzania’s objections are anything to go by, the answer is at best, “Not yet”, and at worst, ‘No!’
But it is not just Tanzanian concerns that are providing food for thought on East Africa’s readiness for a Common Market, let alone the end objective of political federation.
The Migingo island problem that has dominated media headlines and public attention in Uganda and Kenya, points to underlying friction that is rather more significant than the island’s 4,000 square metre area suggests.
The establishment of a Common Market is of course only the second stage of a four-stage process that began in 1999 aimed eventually at the establishment of a Political Federation of the East African states (initially planned for 2010).
The first stage, the establishment of a Customs Union, has been in place since its ratification in 2004 — albeit with lingering disputes over non-tariff barriers, immigration and other administrative processes; as well as other anti-trade practices that still dog trade talks between Uganda, Kenya and Tanzania.
The second stage, the establishment of a Common Market, was initially set for 2007 and is the subject of the current impasse.
The third stage is the Monetary Union (initially set for 2009), a process that is expected to include the launch of a single East African currency.
These three stages are at the heart of the process of economic integration and are arguably the foundation of any serious effort towards the political federation.
With hindsight, the initial timelines were ambitious.
The process has had to overcome numerous unforeseen structural and administrative obstacles, including lack of clarity on the roles of the EA Legislative Assembly and the EA Court of Justice, poor budgeting, late remittances by member states, bureaucracy and dependency on donor funding.
But the implementation of the Customs Union has also unearthed other deep-seated issues.
The disparities in the inherent economic structures of the three larger partners have focused debate on the issue of gains and losses from trade liberalisation.
Equally prominent issues of debate have been the Common External Tariffs used by each country — most notably for essential food crops such as grains, but also for imports from the preferred trading partners of each of the member states.
Apart from contributing to the delays, these issues have invited closer scrutiny by analysts, businessmen and politicians.
While this has allowed better understanding of the differences in economic policies of each of the member countries, it may also have fuelled pockets of mistrust between stakeholders.
It is this mistrust that has weighed down discussions on the equally fundamental issues relating to the Common Market.
Key hallmarks of a Common Market include a synchronised macroeconomic policy environment, easing of border controls for member nations as well as harmonised employment and labour legislation.
The mistrust has hampered the development of frameworks for managing movements of people as well as the legal and administrative structures needed to facilitate such movements.
The same concerns have affected discussions on cross-border land ownership and the universality of national ID cards within the community.
But beyond these factors, the political climate has in all likelihood been particularly unsuitable for this stage of the process.
Kenya’s neighbours are probably not yet over the shock of the post-election violence the country suffered early last year.
The recent exchanges between ODM and PNU leaders have only served to confirm how fragile Kenya’s coalition is, while pointing to a government whose dysfunctionality frightens all but the most aggressive.
But it is not just Kenya’s moribund political dispensation that is attracting adverse attention.
Rampant corruption in Tanzania’s public administration disillusions regional and international investors in equal measure.
Rwanda’s strict Kagame-centric government may inspire accolades in its dispensation of government services and facilitation to inward investors, but it continues to raise questions about what a post-Kagame Rwanda would be like, and indeed what if any succession arrangements the incumbent has made.
Uganda’s growing intolerance for civil liberties and President Museveni’s increasingly autocratic (and nepotistic) style of governing raise fears about next year’s general election in that country.
These factors are also borne out in other ways.
According to Transparency International, Tanzania, Uganda and Kenya respectively ranked 108, 133 and 148 out of 180 countries in its 2008 Global Corruption Perception Index.
In 2007 according to the World Bank, Kenya, Uganda, Tanzania and Rwanda had national income per capita values of $680, $340, $400 and $320 respectively compared with the sub-Saharan average of $952.
According to the Society for International Development, by early this decade, Kenya, Uganda and Rwanda had an income inequality index of 57 per cent, 43 per cent and 46 per cent, with all states (including Tanzania) showing an increase in this inequality index over the decade to 2000.
These factors appear to suggest that the advocates of regional integration may have overestimated the benefits that could accrue from the joining together of these underperforming countries.
But in reality they may instead confirm the suspicion that it is East Africa’s leaders who are the stumbling block.
The region’s businessmen may quibble over the details and other aspects of the processes, but they remain clear about the direction they wish for East Africa. So too the rest of the region’s citizens.
According to the Afrobarometer research project, in a December 2008 survey carried out in Tanzania, more than 67 per cent of Tanzanians stated their support for the free movement of people, goods and services, 60 per cent supported the Customs Union while 54 per cent supported the Monetary Union.
Tellingly, more than 50 per cent do not support full political federation, although the survey researchers argue that the biggest challenge the proposed federation faces is lack of awareness of its proposed benefits.