Travelling in EA? ID card is all you’ll need

Sunday October 11 2009
news sub 2 pix

Travellers at a check-point. The Kampala meeting endorsed the draft Common Market protocol. Photo/ANTHONY KAMAU

East African Community member-states that are ready to use national identification cards as travel documents in the region can go ahead and do so.

This was one of the resolutions of a meeting to thrash out controversial annexes to the establishment of the Common Market, after 17 months of negotiations.

In the meantime, member states have endorsed the draft on the Common Market protocol, which has 52 articles.

Member states reached an unanimous agreement in Kampala on three long-standing annexes on access and ownership of land, use of national identification cards as travel documents, and permanent residence.

But some issues have not been resolved on the use of identification cards as legal travel documents in the region.

While many praise the move for easing movement in East Africa, consensus is yet to be reached on identification documents.


In Kenya, for example, the main document used for identification is the identity card.

In Uganda, however, there are no official identity cards.

Plans to introduce national identity cards have been debated in parliament, but the project was dropped in 2003 since the procurement process was allegedly tainted with malpractice, bribery and corruption.

In the absence of official identity cards, documents issued by different governmental authorities serve as proof of identity.

They include voter cards, issued by the Electoral Commission, birth certificates issued by the Uganda Registration Services Bureau, driving permits administered by the Uganda Police Force, and resident permits issued by local councils.

Since there is no requirement to obtain any of these documents, unless they are needed for a specific purpose, and the procedures for obtaining them are lengthy, expensive and difficult, many Ugandans do not obtain them.

Kenya’s East African Community Permanent Secretary David Nalo says the four partner states — excluding Tanzania — agreed on the use of identity cards as travel documents.

Tanzania shot down this requirement as it does not have identity cards.

“In the Kampala meeting, it was agreed that all partner states invest in new generation identity cards that will be accepted across the region,” he said.

On access and ownership of land, it was agreed that member states’ national investment laws be adhered to.

The same goes for permanent residence, where eligibility and approval will depend on national legislations.

“The Council of Ministers agreed that the three issues should not override the Community’s quest for a harmonised market. It was, therefore, decided that we exempt them from our negotiations,” Mr Nalo said.

Conspicuous in the Kampala discussions was the removal of restrictions on capital markets.

According to Mr Nalo, member states agreed to eliminate restrictions on free movement of capital.

Issues contained in this annex deal with direct investments in other countries, securities on capital markets, collective investment schemes and money market instruments.

Others are credit operations, personal capital transactions and portfolio investments.

The move by the Community to iron out cross-border listing restrictions is likely to lower the cost of equity capital of cross-listed companies due to a decline in transaction costs. It will also enhance the quality of information available to investors.

The challenges that currently face cross-listed firms, such as compliance with multiple regulators in the five countries and lack of harmonised laws, will be overcome.

The move to ease cross-border listings in the region comes just a few weeks after Tanzania assured Kenyan investors that they will soon be able to participate in its stock market without any restriction.

“We will reach a stage where we will say a Kenyan is not a foreigner to Tanzania, neither is a Tanzanian to Uganda, Rwanda and Burundi,” said Tanzania Prime Minister Mizengo Peter Pinda during a visit to the Nairobi Stock Exchange.

Tanzania has on several occasions locked Kenyans out of participating in its equity and bond issues.

Kenyans and Ugandans, for instance, were not allowed to take part in the National Microfinance Bank initial public offering in August last year for fear they would destabilise the country’s foreign exchange position.

But all is not lost as currently the East Africa Securities Regulatory Authorities is spearheading a number of initiatives to harmonise the operations of capital markets in the region.

Various proposals, such as the reservation of 40 per cent of shares during IPOs to East African investors and the adoption of common standards for market regulation and information sharing, have been approved.

To ensure that it realises a common market before the end of the year, the EAC has formed a team of lawyers to study the protocol.

Starting this week, the legal experts will have sessions in Mwanza, Tanzania. Mr Nalo says this will ensure no gaps remain.

“We also want it to be consistent with national laws,” he told The EastAfrican.

After the Mwanza meeting, it is expected that a Council of Ministers forum will be held to consider the final input in the market protocol before it is forwarded to the Summit for signing in November.

“You thought this was just lip service when we said the region will have a Common Market before the end of the year. It is now a reality.

“The public should whet its appetite for investment because this market has huge potential,” said Juma Mwapachu, the EAC Secretary-General, in Nairobi last week.

As soon as the region converges its markets, it is expected to deliberate on the establishment of a monetary union — which has been projected to come into force before 2012.

Currently, a joint study on the proposed Union, led by a team of experts from the European Union Central Bank, is going on.

Targeted in the study are the central banks of the EAC partner states and their ministries of finance, planning, EAC affairs and trade.

Others are capital markets, bureaus of statistics and the banking fraternity.

“The purpose of these visits is to meet various stakeholders on the formation of a Monetary Union and to acquaint them with matters which are likely to arise in this process,” said Kenya’s EAC Minister Amason Kingi.