EDITORIAL: Trade disputes hit East Africa harmony
Saturday August 11 2018
The resolve by the East African Community member states to market the region as a single investment destination was laudable, as it was widely expected that the gains of regional integration would thus trickle down to all citizens.
Still, while regional integration has been the mantra of the EAC heads of state and regional policy makers, the key question is whether this dream will ever be realised, going by the persisting trade wars between the member states.
Although significant milestones have been achieved with the signing and ratification of key protocols, the region still has a long way to go to attain its goal of unity.
The trade wars and the seemingly lack of commitment by some partner states on the implementation of joint regional projects such as the pipeline and the crude oil refinery have sent mixed signals about the commitment to regional integration.
The trade disputes are eroding the gains of the Common Market Protocol, which provides for free movement of goods, services, labour and capital within the regional bloc.
The success of the Common Market is critical to the ongoing regional integration process because it will pave the way for the achievement of the monetary union and the EAC political federation.
Last week, Tanzania cracked down on sugar imports from Uganda, claiming the commodity had been sneaked into Uganda from Kenya, which is entangled in a domestic sugar crisis caused by importation of large amounts of contaminated duty-free sugar.
Dar imposed a 25 per cent import duty on sugar from Uganda, which Kampala said was a violation of the Common Market Protocol and the EAC rules of origin.
Earlier this year, Tanzania and Uganda imposed a 25 per cent import duty on Kenyan confectionery such as juices, ice cream, chocolate, sweets and chewing gums, claiming Kenya had used zero-rated industrial sugar imports to produce them.
Unfortunately, these disagreements have now trickled down to EAC citizens, who no longer see each other as brothers and sisters.
Last week Kenyans protested at the Namanga border after milk traders were arrested and placed in custody by Tanzanian officials.
Kenyan tour guides and drivers for their part blocked their Tanzanian counterparts from entering the Maasai Mara Game Reserve, arguing that the Tanzanians had also stopped them from gaining access to the Serengeti National Park.
These disputes have translated into a drop in the intra-EAC trade. For instance, in 2016, intra-regional trade dropped for the second year running, by 14.6 per cent to $4.4 billion in 2016, from $5.1 billion in 2015.
Indeed, intra-regional trade still constitutes just 9.4 per cent of the total trade of the EAC bloc despite the implementation of the Single Customs Territory, which provides for removal of tariffs and other barriers to trade among the partner states.
The EAC Secretariat has blamed the low volume of intra-regional trade on an unfavourable trading regime that hinders the export of certain commodities to partner states and non-tariff barriers.
It is clear that integration will only work when EAC member states begin to act in good faith.