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Ideas & Debate

Speed up EAC economic integration

Cargo trucks in Malaba town. As EAC continues to work on customs union harmonisation, it has to pay attention to all non-tariff barriers  to facilitate free flow of goods and people across the region. File
Cargo trucks in Malaba town. As EAC continues to work on customs union harmonisation, it has to pay attention to all non-tariff barriers to facilitate free flow of goods and people across the region. File 

We need to fast-track full economic integration of East African Community (EAC) to multiply regional trade. It is when success in regional economic and trade harmonisation and growth is achieved that we can turn our attention to political unification, which currently may be premature.

Too early attention to political union will mostly create room for differences that may derail speed of regional economic development. It is the quality of economic and trade co-operation that should concern us most, for when this is achieved, political union will have been made much easier to achieve.

For some of us who witnessed true economic benefits of the former EAC, we are quite keen to witness creation of a strong trade bloc that enhances GDP of each member country.

We also did witness in the 1970s the negative and disruptive impacts of divergent regional political systems that eventually led to collapse of EAC.

The political systems of the five EAC countries as they are today are neither homogenous enough nor ready for political unification, as they are all at varying stages of political evolution.

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Each of the five EAC states has national priorities, but one cross-cutting feature among them is the desire to add value to their individual economies through regional trade.

Kenyans, for the next few years will be pre-occupied with the constitutional transformation including devolution as they strive to fortify national cohesion.

At the same time, Kenya will be prioritising development of key infrastructural features which include energy, irrigation, transportation etc.

Tanzania, Uganda and Burundi will sooner or later need to push constitutional reforms to levels being achieved by Kenya and Rwanda. Uganda specifically will for the next few years be pre-occupied with the management and development of their newly found oil resources among other things.

As each EAC country strives to enhance governance standards, and to maximise on its local opportunities and priorities, it should target economic value addition through regional trade, and I am convinced this is already happening albeit at a very slow pace.

I believe Kenya’s chairmanship of the EAC in 2012 should focus on ensuring that full regional trade facilitation is achieved through efficient and effective regional economic, monetary, and infrastructural systems.

As we continue work on Customs harmonisation, we have to pay attention to all non-tariff barriers in the region so as to facilitate free flow of goods (and persons).

Enactment of regional and national laws and regulations that focus on easing customs procedures and tariffs; weighbridge systems; transportation safety and security; immigration; harmonisation of standards for goods etc. is what should be prioritised by each EAC member state.

We should also develop a habit of joint regional master planning for transit infrastructure (ports, roads, rail, lake services etc) so that communication efficiency and cost-effectiveness are uniform across the borders.

Regional master planning on infrastructure ensures that least cost transit solutions are found for the economic benefit of all regional partners.

Inter-state investment joint venturing on cross-border infrastructure projects can also help nations to start getting used to working together ahead of any political federation.

It is when we are working on joint projects that we learn the art of accommodation that is essential for any future political union.

Such inter-governmental efforts will also help to start dismantling the myths of “national sovereignty” which mostly interfere with regional harmonisation.

As we work on regional trade harmonisation, each member state needs to develop policies, legislation and regulations that permit free flow of capital and investments across the EAC as a first step towards consideration for monetary unification.

Central bank governors should have a forum where they routinely discuss monetary issues affecting the EAC nations. This way, we shall start developing shared and uniform principles on monetary policies and strategies, which currently do not appear to exist.

During the last EAC summit, Tanzania expressed unease about political unification, and I feel they were rightly justified.

No one country should feel pressured to rush into a political union if they are not ready or are uncomfortable with it. We need to reach a state of mutual ease and accommodation with each other before we push for political integration.

Let us in the meantime progress common purpose regional economic development which is very unifying and benefits all.

We are also anticipating incorporation of new members (South Sudan and possibly Somalia) into EAC.

While these countries can easily fit into the ongoing economic and trade integration with the EAC, it will be premature to contemplate political unification with these new countries, as they will need plenty of time to establish stable governance structures.

Political unification should not pre-occupy us at this time, although it is essential that at EAC we start defining templates for minimum political reforms needed by all member states to eventually facilitate federation when the right time comes.

I believe we are so far on the right track in developing a strong regional economic block, despite preoccupation by various member states with pressing national priorities.

The test for the EAC secretariat is how to keep all states focused on tasks that are necessary to achieve effective economic and trade integration sooner.

Successful regional trade invariably unifies countries and prepares them for a potential political federation.

Mr Wachira is a director of Petroleum Focus Consultants : e-mail: [email protected]

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