Economy & Politics

EAC locks out South Sudan and Somalia

South Sudan and Somalia have been locked out of the East African Community (EAC) after the economic bloc’s officials advised against admission.

The decision comes as a blow to local businesspeople who will continue to face restrictions in moving goods and investment capital especially into Juba which had made an application for admission.

A team of technical experts appointed by the bloc early this year to review its economic and political pillars has advised the Council of Ministers to withhold South Sudan’s admission, pending key institutional reforms.

Musa Sirma, the outgoing chairman of EAC Council of Ministers, said the technical team based its decision on the country’s slow progress in setting up proper market and governance institutions after two decades of war.

“The technical team reviewed institutions and interviewed their officials to form the opinion that it (South Sudan) needed more time,” Mr Sirma told journalists in Nairobi yesterday.
“This remains the prerogative of heads of state but it is most unlikely a decision would be made to admit South Sudan this year.”

The council of ministers began its one-week meeting yesterday to prepare for the heads of state summit which will take place in Nairobi on Friday.

The membership applications by South Sudan and Somalia are among the items that await the summit meeting where President Mwai Kibaki will also pass on the leadership mantle to Uganda’s President Yoweri Museveni.

The reason cited by the technical team to lock out South Sudan means Somalia also has a long way to go before its bid to join the regional bloc is approved. The presidents had referred South Sudan’s membership request to the council last year after failing to reach a uniform decision.

On the other hand, the presidents are expected to either reject Somalia’s application outright or refer it to the Council of Ministers for similar evaluation.

Aside from governance issues, both countries enjoy cordial relations with EAC members after the region invested a lot of resources to pull them out of more than two decades of lawlessness.

The dilemma faced by the region was captured in part by a statement released by Kenya’s EAC ministry on Monday.

“Whereas some countries support joining EAC immediately, others feel that South Sudan should be granted an observer status while other officials prefer bilateral arrangements.”

Article three of EAC Treaty pegs approval of membership on applicant’s adherence to “universally acceptable principles of good governance, democracy, rule of law, respect for human rights and social justice.”

The applicant’s progress in building a market-driven economy, its ability to strengthen region’s economy and its geographical proximity and interdependence on the region also feature as top criteria.

To be allowed to join the bloc, the treaty adds that the applicant must have social and economic policies which are compatible with those pursued by EAC.
The heads of state may however admit the two countries as observers or associate members, allowing them to participate in the EAC affairs without authority to influence decision or enjoy benefits such as tariff removal.

When it received the report of technical experts, the EAC Council of Ministers recommended wider consultation with the United Nations and the African Union before taking any decision on Somalia’s application, citing transitional nature of the governance structures and ongoing pacification.

Yesterday, Mr Sirma said the signing of the region’s monetary union protocol was likely to be extended to April, next year.

The protocol which was initially scheduled for launch this week outlines the rules and calendar for merging the region’s macroeconomic policies, fixing a uniform exchange policy and introducing a regional currency. Membership approval

Taxes

Other items awaiting the presidents include the proposal to extend jurisdiction of the East African Court of Justice to handle criminal and human rights cases.

The presidents are also expected to approve a proposed model for a single customs territory where all customs taxes will be levied at the first port of entry.

This means landlocked countries of Uganda, Rwanda and Burundi will rely on the Port of Mombasa and Dar to collect their custom taxes instead of levying them at border crossings.

omondi@ke.nationmedia.com