Corporate

Positive vibes revive hope of deepening EAC trade

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East Africa Community and Regional Development Cabinet Secretary Adan Mohamed. PHOTO | FILE | NMG

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Summary

  • Kenya early April sent a delegation to Kampala, Uganda to discuss issues that have seen both countries impose duty and restrict the importation of some goods from time to time.
  • The tariff and non-tariff measures erected by member states during disputes undermine the bloc’s Common Market Protocol.

The on-and-off trade tiffs amongst East African Community (EAC) partner states have slowed down free movement of goods, labour, services and capital, hitting the private sector hardest. The tariff and non-tariff measures erected by member states during such disputes also undermine the bloc’s Common Market Protocol.

Kenya early April sent a delegation to Kampala, Uganda to discuss issues that have seen both countries impose duty and restrict the importation of some goods from time to time. This was followed by a commitment between Kenya and Tanzania to progressively flatten barriers that have hurt trade between the two countries over the years.

East African Community and Regional Development Cabinet Secretary Adan Mohamed, who also chairs the EAC Council of Ministers, spoke to the Business Daily on the progress being made by member states to improve regional trade relations.

Intermittent trade disputes continue to undermine free flow of goods and services within the EAC bloc. why can’t we have a long-lasting solution?

As EAC partner members, we are bound by the treaty that we are signatory to. EAC is the most integrated region in Africa because intra-regional trade is bigger than you will see among other regional blocs. That says a lot about our ability to buy things from our neighbours.

However, whilst the rules are very clear, there are some private business entities that could abuse those rules. And the abuse of those rules is what normally leads to some of these disputes. These disputes will eventually be attended to and resolved once the issues are understood.

But there are cases where the issues are resolved only for them to resurface later and cause abrupt blockade at the borders...

Countries usually want to make sure that you demonstrate that this is a product from East Africa and not a product from other places that’s being paraded and packaged as an EAC product.

We will never eradicate those kind of issues as long as there are traders. They will try and do some of these malpractices. The principle behind having a customs union is that no business is being disadvantaged. You don’t give other people an unfair advantage to actually come to get access into EAC without enjoying the same benefits.

A major concern amongst business people is the time it takes for some of the disputes to be resolved.

There are some things that are easy to fix and sort out over the phone (with a counterpart minister). But if there are significant policy issues, the ministers try and sort them out through sectoral meetings. Sectoral meetings by their nature don’t happen every night. They may not happen every quarter. It takes time. But if something is significant enough to a member state, it doesn’t have to wait for that long. It can be done through a bilateral process.

How do you reassure investors that disputes will be resolved expeditiously?

A lot of things have improved and we have seen a lot of change. There are a lot of positive vibes within EAC that are developing and we want to ride on that to bring back EAC that used to be. For example, the relationship between Kenya and Tanzania is now significantly better.

The relationship between Burundi and Rwanda is also improving. All these things are beginning to get better. Ultimately as governments, we just try and make sure that the environment is suitable for the private sector to do business.

We are working with the private sector in all places. If there’s anything burning, the relevant ministries have access to their counterparts in any country to fix issues.

The restrictions are not only on goods but also free movement of labour.

Even though we are all East Africans, we are also citizens of specific sovereign states. Each citizen of another member state working in another will require to have a permit. That work permit is subject to necessary rigorous processes.

Local immigration departments always have discretion on who to give permit or who not to. Some countries have been much tougher in making it difficult for people to get work permits than others. And each country has got their own reasons for doing that.

Would you say Kenyan immigration laws are friendlier to EAC citizens?

We believe as Kenya that any EAC citizen is free to work, marry and own property in Kenya just like a Kenyan. Other countries may not necessarily follow the same spirit, but you look at the EAC member states today, there are more Kenyans working in those countries than the other way round.

There have been cases where Kenyan citizens have been blocked from taking up job offers in one or two members of the EAC bloc. are you concerned about that?

I don’t think it’s fair for us to focus on isolated cases where permits may have been declined as opposed to looking at a much bigger picture of the movements of East Africans in the region to get employment.

When immigration officials sit and assess the suitability of somebody, most of the time there are basic questions they ask like: Are there locals who can do this job? I wouldn’t call this a restriction or a barrier, but due process that’s followed.

But it’s clear that some countries are subjecting people to a much tougher threshold than others. That notwithstanding, I think we have to be very careful as a country because we have a lot more Kenyans working in those countries than the other way round.

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