We must clear political mistrust to strengthen East African Community

A few years ago, a prominent Kenyan businessman went to Iringa, Tanzania, and bought a number of tea farms and a factory. He invested millions of dollars in the deal and was expecting to put in more.

His investment would have boosted Tanzanian tea exports and created hundreds of new jobs. Before nine months were over, he was visited by the TRA (Tanzania Revenue Authority) who demanded taxes in advance. He argued that he had just started his investment and had not made any profits yet. It didn't make any difference and within two years he sold off his investment, citing continuous harassment.

Even though Kenya Revenue Authority is also not the friendliest, it is extreme to demand taxes even before profits are declared. Ironically, within a year of his exit, a Tanzanian tycoon had the temerity to lecture President Uhuru Kenyatta on why he should open the Kenyan market to Tanzanian companies. This has been the continuous nature of our relationship with our East African neighbours.

Kenya banned imports of milk from Uganda, and Uganda banned imports of chicken from Kenya. Tanzania at one time cancelled the export of maize to Kenya when we were experiencing our worst shortage, leading to massive shortages and a rise in prices. It has not been an easy-going relationship on all sides. We are neighbours and our relationship is historical and necessary.

Uganda is Kenya's largest trading partner in East Africa. We export approximately $940 million per year to Uganda and import about half of that amount. We export about $500 million to Tanzania and their exports to Kenya have only recently exceeded their imports from us. We are interdependent with our neighbours. These are ties that must be promoted and increased.

While our trade numbers are important, we should focus not on what is, but what could be. Our entire trade numbers, while significant to our economy, account for only 11.26 per cent of our national production of about $98 billion. We are losing the economic battle and a major cause for this is regional relationships. The only way Kenya can move from its current unemployment problems is to open the economy to exports and increase manufacturing for export.

The only way to do this is to establish the Special Economic Zones (SEZs). This is not a new idea, and this is what brought China out of it poverty into its leading economic status in the world. The same model was used by the Asian Tigers; Korea, Singapore, Malaysia, Indonesia and Vietnam to move their countries forward.

What are we waiting for? There is no need to reinvent the wheel. Our manufacturing sector is under-performing. It contribution to GDP is declining and we have to increase manufacturing to create more jobs. Why are we not opening the SEZs?

The main impediments are regional customs regulations. Kenya exports $350 million of clothes to the United States, that is less than one per cent of what the USA imports. We could easily triple our sales to the US and immediately exceed our export numbers. We should focus on increasing our exports rather than let regional restrictions hinder us too much and if necessary, we should drag the local economies with us.

It is in the regional interest to open up our economies for export. These issues need to be addressed in the East African Legislative Assembly (EALA). It is important that Kenya sends delegates who understand these issues and have the gravitas to challenge our counterparts to change their way of thinking. Our national interests are in strengthening our regional relationships, but these regional relations cannot be at the expense of keeping our Kenyan economy from growing. Our youths demand that we create new jobs and our delegates in EALA must send this message.