How integration will lead to EA’s prosperity

East African ministers and secretariat members hold 800 meetings each year. That is an average of three meetings each day, all aimed at navigating the complex nature of the East African Community’s integration process.

For 11 years now, Kenya, Uganda, Tanzania, and more recently, Rwanda and Burundi, have been on a journey towards achieving regional political and economic harmony.

Over this time, the value of the region’s combined product output has risen to Sh6.8 trillion ($75 billion), according EAC’s Secretary General Richard Sezibera.

But behind the relative success of the process lie many missteps and criticisms. The most recent is the diplomatic tussle between Kenya and Tanzania on tour van access to airports and tourist sites.

TradeMark East Africa (TMEA) is one of the institutions in a caucus of government ministries, development partners, civil society watchdogs and non-governmental organisations forming a support system for the EAC’s delicate walk towards regional integration.

Business Beat sat with TMEA’s Chris Kiptoo (country director) to discuss the integration process and the opportunities and challenges that exist.

How far, in your opinion, would you say we are from achieving our regional integration goals?

Considering the complexity and scope of the integration agenda, and the fact that integration requires ceding some degree of national sovereignty, the EAC partner states have made substantive progress in achieving regional integration goals. Indeed, EAC is often seen as one of the economic blocks that has made the greatest progress across the continent.

The EAC region is now a common market, ushering in a higher level of integration beyond trade in goods, which the Customs Union caters for. This has had a positive impact on the economies of the partner states as reflected by growing intra-regional trade over the past decade.

The broad economic space that the services sector will create will further trigger the expansion of economic activities and jobs in the region. Cross-border capital movements will also spur the growth of industrialisation driven by an expanding and more productive agricultural sector.

In the past, there has been concern that some members of the EAC seem to be losing enthusiasm for the integration process. Have we got past this, and what is co-operation like between the member states at this time?

Achieving successful negotiations leading up to the adoption of the Common Market [CM] Protocol, its approval by EAC Heads of State and its ratification in record time is a milestone for the EAC. No other regional economic community in Africa has achieved such a milestone.

It epitomises the strong political will and firm commitment from all EAC stakeholders in deepening and widening integration.

The co-operation between the five partner states is quite good. Partner states, as the principal implementers of EAC programmes, must begin to determine how the four freedoms in the CM Protocol should be put into effect.

The differences that are expressed or experienced are fully expected in as complex an undertaking as integration.

Of course, there is room for greater co-operation and for individual members to meet their regional commitments.

There has been a lot of activity around setting up the single customs territory (SCT) in the northern and central corridors. How will this translate to reducing EAC’s cost of doing business?

By reducing transaction and transport costs – including customs and border formalities, and non-tariff barriers that interfere with the smooth flow of goods – the SCT is already having dramatic impact, as reflected in the number of days it now takes to clear and transport goods along the transit corridors, for instance, from 18 days to six from Mombasa to Kigali.

What role does the region’s private sector have to play in the integration process, and what is in it for them?

All EAC integration efforts are aimed at creating an enabling environment for the private sector to play its rightful role of being the engine of growth. By risking its capital and boldly investing in cross-border business, it demonstrates its faith in the promise of EAC integration.

The private sector can and is actively using its clout to influence policy. In particular, TMEA support is focused on helping the sector achieve an improvement and increase in the implementation of quality advocacy campaigns.

We also support private sector and civil society organisations in increasing and improving their collaboration on areas of mutual interest.

What does all this mean for the Port of Mombasa, which is the region’s largest cargo gateway?

Transport costs in East Africa are among the highest in the world. As a result, goods are more expensive for East Africans and less competitive for world markets.

One key factor contributing to high transport costs in Kenya is inadequate port infrastructure that does not meet current and future traffic needs, resulting in congestion and delays.

Even where transport infrastructure is adequate, delays result from inefficient use of the port, low labour productivity, bureaucratic inefficiency, poor transport regulation and corruption.

We are working with partners to reduce such delays so as to reduce the cost of transport and increase the physical access of goods to markets, improving trade.

We have focused on interventions aimed at reducing the time needed for goods to transit the port – including the construction of an access road through Mombasa’s Port Reitz to avoid congesting the Changamwe exit – which is consistent with the goal of reducing transport and trade-related costs along the Northern Corridor.

What are some of the greatest challenges EAC member states currently face in the quest towards regional integration, and how can they be surmounted?

One of the biggest challenges is the different levels of development among partner states. This often translates into differences in capacity and resources, and therefore differences in rates of implementation of regional commitments.

-fsunday@standardmedia.co.ke