2011/2012 Yearbook Foreign

Kenya and the EAC

It’s been 11 years since the East African Community (EAC) treaty came into force. Kenya is reaping the benefits of this regional integration and trading. Kenyan goods exported to the EAC and COMESA are by and large finished products or value added goods, unlike the exports to Europe, which are primary commodities. Cross-border investment has increased tremendously from Kenya to other countries. However, there is little cross-border investment into Kenya. This is because Kenyan industries had been thriving even before the EAC treaty came into effect in 2000. Although EAC has seen major advancements, there are still challenges. Perhaps the biggest is lack of awareness by citizens about the community, its objectives and benefits. Ignorance can sometimes lead to mistrust.

EAC is addressing the problem through public sensitisation programmes. The second is the slow pace of development towards achieving a single customs territory. When fully operational, it will mean once goods enter through one port in East Africa they will circulate without being subjected to any other conditions or to rules of origin requirements. But this will require EAC to come up with a mechanism for collection and sharing revenue. The third is non-tariff barriers. East Africans still think of themselves as nationals of their respective countries — as Kenyans, Ugandans, Tanzanians, Burundians and Rwandese — so there is still a tendency to use extra tariffs to enforce nationalism. Another challenge that needs improvement is the failure to adhere to the common external tariff. The EAC states still apply many exceptions to the agreed common external tariffs.

When the EAC common market protocol was signed, there was an agreement to implement certain key elements by August, 2010. Each member country is supposed to have reviewed its national laws to identify and repeal those not in tandem with the common market protocol. But member states have dragged their feet, partly due to pressing national priorities such as general elections in Uganda, Tanzania and Rwanda. Kenya started but was slowed down by the implementing of the new constitution. However, Kenya has ratified the EAC treaty and because of that, it is now part of Kenyan law. Despite these challenges, more people are moving around in East Africa and trade has grown. Certificates of origin issued by the Kenya Revenue Authority over the past one year have increased, compared to the year preceding the launch of the common market, meaning that there were many people moving goods across the borders.

There have also been mutual recognition agreements signed by the peoples of East Africa, especially the professional bodies, such as the Architectural Association of Kenya, while other organisations are in discussion. Progress has also been made in education with agreement reached on mutual recognition of certificates and years of schooling. Another area of success relates to the movement of people in the Community. As long as one is an East African citizen and is in possession of valid travel documents, it is now possible to move freely to another mem ber state and live there for six months without restrictions, except taking up employment which is still subject to some restrictions.

The implementation of regional integration is being conducted in line with Vision 2030. The smooth drive on the Thika super highway is evidence that the region’s roads will  enhance transport for both goods and people. The Nairobi-Namanga road linking Kenya to Tanzania has been improved. Tanzania is working on the Namanga-Arusha stretch. The improvement of the port of Mombasa and the railway link will be addressed, not just as a national project, but in a regional context. Mombasa serves Uganda, Rwanda, Burundi and a part of Tanzania.

In tourism, there is desire to take a common approach and market the region as one destination. So in implementing its integration strategy, EAC is taking into account the visions of long- and medium-term strategies of the five member states and trying to harmonise them into one big plan. After creating the EAC Customs Union and the Common Market, the remaining goals are more ambitious and far reaching: the establishment of a monetary union and ultimately a political federation. Under the terms of reference and road map, a monetary union protocol was to have been negotiated by 2012. However, there is a big debate in the region, especially in Kenya, whether or not the time frame to 2012 is sufficient. Some are asking whether it is really necessary to have a mon- etary union at this time while others argue for a monetary union but not a common currency. If EAC had a common currency and a financial crisis broke out as happened in Europe which country would bail out the others?

If EAC succeeds in establishing a monetary union by 2013, the next goal will be the biggest and the trickiest — a political federation— meant to be in place by 2015. There are those in the region who think EAC does not need a political federation. Others argue that if EAC sufficiently implements the customs union protocol, the common market protocol and improves on its monetary union, that should be sufficient.

Before the federation comes into being, the issue of multiple memberships in regional groupings in East Africa will have to be addressed. For instance, Tanzania is a member of the Southern Africa Development Community (SADC) as well as East African Community. Kenya is a member of COMESA, EAC as well as IGAD. Uganda, Rwanda and Burundi are members of COMESA and EAC. This erodes any confidence the public might have that the governments are serious about regional integration.

The EAC has come up with an EAC, SADC, COMESA tripartite strategy to try and address the proposed regional integration, especially the customs union