East African single visa in limbo as Kenya holds Uganda, Rwanda cash

Officials in Kenya remain tight-lipped over the fate of millions of shillings collected from sale of the region’s single visa even as the second year of trial comes to a close.

The National Treasury, citing stringent fiscal rules, has been holding the cash collected on behalf of Uganda and Rwanda since the three states started piloting a common tourist visa in February 2014.

Both Treasury secretary Henry Rotich and PS Kamau Thugge declined to respond to our queries even as official statistics show shift to national border passes as the standoff persists. The regional visa has netted only Sh40 million in two years.

Kenya is a gateway to the region. It receives hundreds of region-bound tourists by cruise ships and chartered planes is a top collection point.

Under the Kenya’s Constitution, however, tourist visa collection is regarded as any other public revenue which has to be surrendered to the Consolidated Fund.

The money in the Consolidated Fund can only be spent or shared out according to an appropriation Bill approved by Parliament.

“Kenya has not been able to remit any of the money collected in the last two years from issuance of the regional visa because we don’t have a legal framework to do so,” said Mr Alfred Kitolo, director of productive services at Kenya’s East African Community (EAC) ministry.

“We are not suggesting that any money collected on behalf of Rwanda and Uganda has been lost. Kenya will release all the cash once it gets around the legal hurdle.”

According to Mr Kitolo, Kenya is already mulling an option of classifying single visa proceeds as fees. He told the journalists during a media training organised in Nairobi last week by EAC Secretariat and German’s agency GIZ: “Once classified as fees, a special fund account can be opened for the money which will then be distributed according to the agreed formula.”

A common visa is regarded as the first step towards integrating the region’s tourist market. It allows a visitor to travel to all the signatory countries without paying additional entry fees at border points.

Its rollout was meant to pave the way for a harmonised classification of accommodation facilities across the region followed by joint marketing of EAC’s attractions.

In a move widely seen as an attempt to goad a cautious Tanzania and a slow-pacing Burundi into a common market, Kenya teamed up with its two landlocked neighbours to pilot the single visa.

Along with regional crude pipeline, cross-border highways and a regional petroleum refinery, the common tourist pass featured prominently among the key planks of the so called “coalition of the willing” which sought to speed up regional integration.

The common document is issued at a cost of $100 (Sh10,000) each. Under the pilot scheme, a country which collects the visa is allowed to deduct 10 per cent up front as administrative cost. The rest of the money is to be shared equally among all the states covered in the tourist’s itinerary.

For instance, a tourist who arrives in Kenya by plane is supposed to pick the EAC Visa at the Jomo Kenyatta International Airport in Nairobi for use to visit both Kampala and Kigali.

In that case, Kenya keeps Sh4,000 ($40 ) or 40 per cent of what each tourist pays before submitting Sh3,000 each to Rwanda and Uganda revenue bodies.

Failure by Kenya to honour its part of the bargain is set to embolden countries such as Tanzania which refused to participate in the single visa initiative over revenue loss fears.

The stalemate may also send a negative signal to South Sudan, the bloc’s newcomer which has since indicated willingness to integrate its tourist market with neighbours.

Kenya is East Africa’s largest economy with an economy of slightly over Sh6 trillion — almost eight times larger than Rwanda’s Sh789 billion and almost thrice Uganda’s Sh2.63 trillion. Kenya also larger than Tanzania’s Sh4.92 trillion economy.

Due to its size, Nairobi is always under pressure to assure cautious neighbours that none of the joint initiatives is designed to benefit Kenya at the expense of other integration partners.

As for efforts to integrate tourist resources, officials reckon that Kenya’s tight fiscal (revenue expenditure) policy has caused considerable disquiet among integration partners.

It is such conflicting policies that may deepen an entrenched perception that economic integration favours Kenya at the expense of other partners, experts acknowledge.

“Generally, the question of revenue sharing should be handled with great care because it is a very sensitive issue in the history of integration,” said Peter Njoroge, director of economics at Kenya’s EAC Affairs ministry.

“The friction that led to the collapse of the first integration attempt (1977) originated from bodies that collected shared revenues like railways, ports and airways”.

The joint classification of hotels has been going on in the last two years. The East African Legislative Assembly which concluded its Nairobi session Tuesday has, however, been piling pressure on the region’s ministers to speed up ratification of the Protocol on Tourism and Wildlife Management.

The legislators want the EAC Secretariat to allocate more resources to the region’s Tourism and Wildlife Management Unit to boost joint tourism marketing.