Ntungamo-Kagitumba Road upgrade kicks-off

This is the 10th edition of the Doing Business report. First published in 2003 with 5 indicator sets measuring business regulation in 133 economies, the report has grown into an annual publication covering 11 indicator sets and 185 economies. In these 10 years Doing Business has recorded nearly 2,000 business regulation reforms in the areas covered by the indicators. And researchers have produced well over 1,000 articles in peer-reviewed journals using the data published by Doing Business—work that helps explore many of the key development questions of our time. Doing Business 2013 holds new information to inspire policy makers and researchers.

The overall objective of the SG’s CEO Forum is to provide the Secretary General of the East African Community and CEOs of businesses in the region a platform for continuous dialogue to ensure that the integration process works for business and trade, EAC competitiveness, and ultimately economic growth.

Creating a monetary union for the East Africa Community requires extensive institutional preparation as well as convergence among the region’s economies. The experience of the euro zone shows the need for putting in place adequate safeguards against excessive fiscal deficits and debt. Despite a long period of institution building and many resources invested in preparing the monetary union, the euro zone currently faces a crisis that threatens its continued existence. Given that the EAC is at a much earlier stage in regional integration than was the European Union at the time of the signing of the Maastricht Treaty, it is unlikely that the EAC could create a full-fledged currency union that was effective in creating a zone of monetary stability in much less than a decade.

The East African Common Market Protocol that came into force in 2010 provides for the free flow of goods, labour, services and capital across the EAC bloc. To achieve this, members undertook to remove all tariff and non-tariff barriers to trade. While progress has been made on the removal of the former, doing away with the Non-tariff barriers along the main transport corridors of the region has remained a challenge.

The East African Community (EAC) has undertaken a fast paced process of integration whose ultimate aim is to establish a political federation. To this end, a Customs Union (CU) was created in 2005, joined by Rwanda and Burundi in 2009, and the common market protocol (CM) came into force in 2010; although these are not yet fully functional. The main objective of this process is to increase trade and economic integration in the region in view of attaining higher economic growth and structural transformation, which should aid EAC countries to tackle poverty and achieve the millennium development goals.

Uganda, along with Kenya, Tanzania, Rwanda and Burundi, is a member of the East African Community (EAC). The EAC has established a Customs Union, and a Common Market. It is due to establish a Monetary Union, and is ultimately moving towards Political Federation. This report does a brief overview of the different initiatives within the program and their impacts.

Export growth is a key driver of economic growth (Brenton and Newfarmer 2007) and hence understanding export competitiveness is important so as to inform appropriate policy measures that can harness a country’s economic potential. The correct design of interventions to enhance trade competitiveness requires forming an understanding of the type of products exported and the nature of the challenges that the East Africa Community (EAC) faces in international markets. This report describes the nature and evolution of trade between the EAC and the world during the last 15 years. This is a necessary step in order to identify where the main competitiveness constraints lie; where new opportunities are being created; and the potential areas of intervention.

Although there has been rapid progress towards integration of the East African Community (EAC), our research shows that there are still significant constraints to the implementation of the Customs Union (CU) and that the trade impacts associated with this process so far are small. The process of regional integration is important for the economic development of this region so it is imperative to redress the current barriers that exist in establishing the CU and common market (CM). Arguably, the small trade impacts found can be attributed to non-tariff barriers (NTBs), the small size of these economies and the deep specialization in primary commodities in trade with the rest of the world. This briefing uses evidence from research on the regional integration process of the EAC commissioned by TradeMark Africa and proposes some priority areas for policy intervention to address these challenges.