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ELECTION 2022

Need to remove trade barriers to spur regional trade

EDITORIAL
By - | Dec 2nd 2012 | 3 min read

The 14th East African Community Heads of State Summit ended yesterday after three weeks of deliberations. The theme for this year’s EAC summit, “Investing in 21st Century Infrastructure for Deeper Integration,” could not have come at a better time.

The trading bloc is huge and has abundant resources, which if well harnessed could benefit its 130 million people. But poor roads, lack of a railway, cumbersome port procedures at both Mombasa and Dar es Salaam imply trade among the partner States is poor and limited.

One fundamental principle in trade is that one should buy goods and services from a country, which has the lowest price, and sell his goods and services to a country, which has the highest price. This is good for buyers and sellers. But as it is within the EAC region, food, raw materials, finished products such as electrical appliances are too expensive and therefore beyond reach of ordinary citizens. This is partly caused by poor infrastructure.

The poor roads network that lead to long delays for goods on transit from Kenya to Uganda, Rwanda, Burundi and South Sudan imply the costs are pushed to consumers.

While we laud the EAC Heads of State summit for identifying infrastructure as this year’s theme, we wish to encourage them to move a step further to implement projects that could help spur trade among partner countries. This will improve the lives of people in the region.

These include energy, railway network, roads construction and repairs among other infrastructure plans.

And with free trade, the less developed countries have the opportunity to accelerate the pace of their economic growth. They can import machines and adapt foreign technology. They can send their scholars and technocrats to more progressive countries to gain more knowledge and skills, which are relevant to the particular needs of their economies. While the EAC has put in place a Customs Union that encourages free trade, most partner states still have introduced non-tariff barriers that impede trade.

These barriers exist in form of roadblocks, weighbridges, duty, and legal hiccups placed by individual EAC countries. The EAC Heads of State need to address these issues in the subsequent meetings to ensure they are finally eliminated.

The coming into place of a common market protocol ushers in free movement of goods, labour, capital and services. The Common Markets Protocol came into place three years ago, but so far only a paltry three countries have begun the progress of aligning their immigration laws to conform to the protocol. So far, Kenya, Rwanda and Uganda have either waived work permit fee or are in the process of eliminating barriers that hinder free labour movement within the region. We urge other partner states that paying lip service to the protocol without implementing it will cost them the trust the EAC has gathered in the past 14 years since it was revived.

Tanzania needs to reduce its work permit fee, which is Sh200,000, the highest work permit fee in the world.

This year’s EAC Heads of State summit focused on the need to expand to South Sudan and Somalia.

We welcome the EAC for allowing the start of a process to have South Sudan and Somali join the EAC bloc. We hope due process will be followed when making the decision that could expand the market beyond the five countries.

This year’s summit underscored the need to reduce corruption at the ports of entry. With the heads of State directing the implementation of a Single Customs Territory, we urge the civil servants who man the ports of entry to carry out their roles professionally. This means avoiding unnecessary delays at the ports of entry, reduce legal hiccups that were seen early this year when goods destined for Uganda and Rwanda were delayed for more than 30 days.

We urge Ugandan President Yoweri Museveni who took over as the chairman of the summit from President Kibaki, Jakaya Kikwete (Tanzania), Paul Kagame (Rwanda) and Pierre Nkurunziza (Burundi) to ensure corruption is eliminated. Work is in progress on the monetary union that will allow for the use of single currency. Experts negotiating this protocol should now ensure the dream of having one monetary unit is achievable.


 

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