Bottlenecks stagnating the EAC integration amid fresh lobbying

Susan Maingi (left), Antony Mwangi, Charles Omusana and John Kalisa. [James Wanzala, Standard]

The regional private sector has noted with concern the slow integration of the East African Community (EAC), which has now informed a renewed intent to re-strategise their lobbying efforts.

The services sector will now be prime owing to some of the bottlenecks businesses in the region have faced when trading in goods.

The East African Business Council (EABC), which is the regional lobby body for the private sector, recently held a two-day meeting in Nairobi, together with the East African Community (EAC) and other partners to devise new ways of advancing the integration agenda.

The meeting was aimed at revamping the Technical Working Group for this purpose. It was noted in the meeting how some of the tools put in place to reduce trade barriers and increase regional exchange of goods and services are not working. This is the reason why intra-EAC trade stands at 15 per cent.

But Annette Mutaawe Ssemuwemba, one of the co-chairs of the Technical Working Group and Deputy Secretary-General of Customs, Trade, and Monetary Affairs from the EAC Secretariat, said it may be that some of those tools are outdated.

"The region has moved forward. I do not think the instruments or mechanisms we had do not work but we have outgrown them," she said. "Let us commend the good they brought but it is time to rethink and refresh."

Ms. Ssemuwemba noted that the stagnation could also be informed by the fact that players are glossing over issues rather than tackling them head-on.

"But if we do not diagnose, if we are addressing the symptoms and not the problem, then we will continue having issues that we do not have a good understanding of," she said.

Some of the issues raised in the meeting involve Non-Tariff Barriers (NTBs), the EAC Common External Tariff that recently introduced a fourth band to spur up manufacturing business in the region, harmonization of taxes, and border facilitation initiatives.

"But for each of these issues, further understanding is needed," she said. She gave an example of value chains, saying some sectors need to be unbundled and address issues affecting specific products.

"There are some challenges that are specific to some sectors. For example, in agricultural products like maize. We need to be sector-specific," she said.

The TWG is meant to reduce or avoid the narrative of blame games between the private sector and public that has stalled integration of the Community and instead come up with implementable solutions for collaboration.

"I am saying this because I have participated in such processes before and 10 years later we are still talking about the same things. I hope, and it is my expectation, that through the TWG, let's work differently and act as a think tank. Let us work collaboratively with the public and private sector," she said.

John Bosco Kalisa, EABC Executive Director and co-chair of the TWG pointed out some of the challenges which involve Stays of Application where countries defer implementation of the EAC Common External Tariff (CET).

EABC in 2023 called for the abolishment of these Stays of Application, saying it is creating an unleveled playing field for producers, manufacturers, and traders in the region.

Mr. Kalisa said there are over 1,000 Stays of Application. "This is distorting trade," he said.

He said a survey was done on the EAC Common External Tariff and found that 67 per cent of businesses utilise the recently introduced fourth band structure. He noted that the EAC Common External Tariff structure has been lauded to be simpler compared to other trade blocs.

"There may be some ambiguities or issues but we can enhance that," he said.

Away from the Stays of Applications, Mr Kalisa noted of cross-border trade barriers saying goods originating from Partner States should not be treated the same way as those from outside the bloc. Instead, they should be given priority with designated queues or clearance desks.

"Our borders are becoming barriers to trade. Can we dismantle those borders or create designated queues for (EAC) goods?" he posed.

Estella Aryada, Programme Coordinator EAC-GIZ, German Development Agency, said the region needs to be aware of the changing socio-economic environment citing services as a venture to delve into.

"Services are a growing component of our economy as we get into the new technology-based generation with aspects like artificial intelligence (AI)," she said. "We need to be at the forefront of ensuring that the private sector is equipped, understands the rules, and also has some interest in breaking into new services markets."

She said the continent is populated by youth who may not be willing to wait until the EAC finishes integrating for them to benefit.

Ms. Aryada said even as GIZ, a key partner of EAC and EABC, acknowledges the challenges, there is a need to find new ways of doing things.

"If an approach is not working, I think we need to be honest enough to bring this to the table," she said.

She noted the narrative that some of the tools developed earlier are not as effective in addressing the existing trade barriers.

"If something is not working, let us build an honest dialogue to bring this to the fore and look for other ways of addressing the problem," she said.

According to the EAC, some of the priorities for 2022-2026 towards integration of the Community include: full implementation of the Single Customs Territory (SCT), enhancing domestication and implementation of regional commitments in line with the EAC Common Market Protocol, attainment of the EAC Single Currency, and strengthening regional peace, security, and good governance.

Other implementable goals are: development of quality multidimensional strategic infrastructure, institutional transformation of all EAC organs and institutions, and increasing the visibility of EAC stakeholders, knowledge, and awareness.

Some of the EAC achievements include: use of IDs as travel documents, removal of visa and work permits for East Africans, right of establishment of one common East African Electronic Passport, and establishment of One Network Area for both calls and data.