A decade since it came into force, the East African Community Common Market Protocol, is going through a reality check. This week, Uganda lodged a formal protest against Kenya, over blockage of its milk exports.

Kenya also accuses Uganda of imposing hefty duties on some of its exports especially beverages. Tanzania has been involved in several trade skirmishes with Kenya even as they were united in disputing Uganda’s sugar surplus and for a while blocking Ugandan sugar from their markets.

In a case of selective amnesia, Uganda also does not believe Tanzania has a rice surplus although many Ugandan entrepreneurs rent land in southern Tanzania to grow rice.

When the common market was conceived, it was believed free trade would be a vehicle for efficient allocation of resources across the economic spectrum. For instance, free movement of labour would allow skills to move from areas of surplus to areas in the community that had a deficit.

Theoretically, application of those skills would over time raise the productive capacity of such an economy, creating a degree of parity with the rest of the region. What the framers might have anticipated but did not state, was that open markets would trigger a realignment of the regional economy as investors look for the most cost efficient production bases.

Uganda got a taste of this early on when multinationals Bata and British American Tobacco shifted their manufacturing operations from Uganda to Kenya. This seeming loss has however, been more than compensated for by the entry of Kenyan capital and expertise into new growth areas, such as dairy in Uganda.

Source: The East African

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