East African Community member states will be racing against time to operationalise a single currency regime to eliminate exchange rate risks, boost trade and investment in the region and read from the same page of financial and economic policies. The establishment of a common currency regime constitutes the third pillar of the EAC integration, after the Customs Union and the Common Market, with political federation concluding the integration. The protocol for the establishment of the East African Monetary Union (EAMU) was signed in November, 2013 by the EAC member states, setting up a roadmap for a Monetary Union within 10 years, implying that a Single Currency regime should be up and running by the year 2024. EAC member country therefore has six years to implement a single currency regime and three years to comply with key macro-economic convergence criteria on inflation, fiscal deficits, forex reserves and public debt. The EastAfrican has however learnt that while the partner states have made some significant progress in laying the ground work for the Single Currency regime, there is still more work to be done. Community technical teams need to burn the midnight oils to realise the dream of a Monetary Union which also provides for the establishment of a single Central Bank for the region. It has emerged that while member countries are struggling to meet the macro-economic convergence criteria, the critical pieces of legislations required to set up Monetary Union institutions are yet to be put in place. The EastAfrican has learnt...

Nearly two decades after the region’s leaders signed on to the revival of the East African Community, progress on integration remains a case of one step forward, two steps back. The past 10 years or so have been particularly significant, having witnessed the geographical expansion of the Community from the initial three members to six, with a combined market of some 150 million people. Although it has been the cause of unease that threatened several initiatives, a Common External Tariff has for years brought predictability to the region’s external trade and given key sectors a level of protection across national borders. But that is as far as the good news goes. While the Common Market Protocol promised much, delivery has been staggered as the partner states employ different tactics to circumvent the more uncomfortable of its provisions. The result has been a disjointed Community where five of the member states have harmonised their financial year while one still holds out. Citizens can enjoy harmonised calling rates while roaming through four of the states, while they bleed money just to receive calls while transiting through the other two. Firms cannot deploy staff to Tanzania for short-term technical work, since Dar insists on a work permit. Citizens from elsewhere in the region cannot register businesses in Kenya and Tanzania without entering into partnerships with locals. Ugandan traders are for instance required to pay for a visa before they can engage in any business in Tanzania. Citizens from other member states have to...

A photo on the East African Community’s (EAC) website is worth a thousand words: It shows two beaming faces; one of the EAC Secretary General and the other of a senior official in the German Ministry of Foreign affairs. Germany had just pledged funding worth 61.5 million Euros to commemorate 20 years since its cooperation with the EAC. The cooperation is nothing more than the annual financial aid without which the EAC would not function. That is a state of affairs the community had not been ashamed to live with all that time. In fact, the German official alluded to it when he suggested that the EAC strengthen its own financial resources. It was like reminding them that they were tired of supporting someone who was unwilling to stand on their own. Every now and then, we hear about EAC members falling behind with their financial contributions. Some have arrears that go back years as if they are members by name only but have no real commitment. When we have members that have not fully implemented the Common Market Protocol, when Non-Tariff Barriers are still in place and have not yet adopted the Mutual Recognition Agreements (MRA) to ease the movement of professionals in the region, one wonders whether the monetary union – leave alone political federation – will ever see the light of day. The image of the EAC SG gratefully shaking hands with the German godfather is really disturbing and we should be ashamed of moving around with...

Kampala. Manufacturers are finding it difficult to trade in D.R Congo and South Sudan due to the lack export guarantees, Uganda Manufacturers Association (UMA), has said. An export guarantee protects exporters against default and is usually offered by government. Mr Richard Mubiru, the UMA executive director, told Trade Minister, Amelia Kyambadde that the lack of export guarantee schemes, makes it difficult for traders to venture into volatile countries such as DR Congo and South Sudan. By 2013, before the break up of a protracted civil trade between Uganda and South Sudan, according to data from the Ministry of Trade, stood at more than Shs890b ($358m) but has plunged Shs2.3b. In her response, Ms Kyambadde advised trader to be cautious with the South Sudan market until when there is guaranteed stability. For DR Congo, she said, Uganda already has a bilateral arrangement, including a Memorandum of Understanding that seeks to ease market access. The agreement, she said, also allows manufactured goods originating from Uganda to access the DR Congo market with little or no interruption. Ms Kyambadde said government would engage diplomatically on the issue of export guarantees. Buy Uganda, Build Uganda policy Manufacturers have also applauded government for pursuing the ‘Buy Uganda, Build Uganda’ (BUBU) policy, which has been one of Ms Kyambadde’s pet projects in the last two years. UMA also commended government for revamping Uganda Development Corporation, a key business financier. However, they urged government to expedite the industrialisation policy to align it with Uganda’s 2040 development agenda. Source The...

Arusha. The German government’s committment of 61.5 million euros (Sh162 billion) to the East African Community (EAC) is set to boost the private sector development in the region. Also to benefit are entrepreneurship projects for the youth as well as technical and vocational training. “We, at the EAC, fully embrace the priority areas embedded in our cooperation with Germany,” said EAC secretary general Liberat Mfumukeko here on Friday. He spoke to a high powered delegation from the economic power house in Europe which visited Arusha with a pledge of 61.5 million euros as economic support to the region. The event coincided with the 20th anniversary of the joint partnership between Germany and the EAC economic bloc which was in its infancy stage. Mr Mfumukeko hailed the German support to the Community in the last two decades, saying it has enabled the bloc to record significant achievements in diverse sectors. Sectors which benefited include monetary harmonisation, trade and customs, institutional capacity strengthening, health and pharmaceuticals,gender and education and the Partnership Fund. Economic diversification, mobilisation of the private capital, value addition and investment in entrepreneurship are among other priority areas in the German-EAC development cooperation, he explained. Mr Niels Breyer, the head of the Division East Africa at the Federal Ministry for Economic Cooperation and Development (BMZ) in Germany, elaborated his country’s support to the EAC is based in the Marshal Plan for Africa. The plan aims aims to support the six partner countries in the region in implementing the development visions...

Arusha/Dar. The East Africa Legislative Assembly (Eala) has turned down the much-anticipated EAC regional Statistics Bill after the Committee on Communications, Trade and Investment (CTI) overturned recommendations made by the ministerial committee. Many of Eala members from the six partner states wanted Section 7 (2) of the draft made during the ministerial committee meeting to be reinstated. In the ministerial committee through the section in question ministers proposed that the director position for the new regional body should be filled by people who hold a master’s degree in statistics with ten years of experience. However, after going through the recommendations, CTI proposed that the head of statistic bureaus from the partner states should automatically hold the positions. It was sent back for amendment and will be debated in the next session scheduled for November. “The Bill drew stiff debate in the house as most of the members opposed the proposals made by the CTI,” Dr Abdullah Makame, from Tanzania told The Citizen over the phone. Reports indicate that Tanzanian Eala members wrote a letter to the Clerk of the regional Assembly on Monday to request for reinstatement of the earlier provision of Clause 7 (2) of the said bill. In effect, Tanzanian member, supported by those from other member states rejected the amendments. Thirteen lawmakers from Uganda, Kenya, Burundi, Rwanda and South Sudan supported the adjournment of the debate of the crucial legislative document. However, Paul Musamali from Uganda opposed the Motion on adjournment of the Bill as announced by...

The East African Business Council has asked member states of the East African Community to adopt the regulatory framework for Mutual Recognition Agreements (MRAs), as stipulated in the region’s Common Market Protocol, in order to facilitate easy movement of professionals in the region. Nicholas Nesbitt, the Council Chairman said although the six member states signed the protocol, the movement of labour especially in specialized fields has not been implementing because of the failure by member states to implement MRAs. MRA is an international pact by which two or more countries agree to recognize one another’s conformity assessments. The objective for signing an MRA is to enable professionals in one country to be recognized in all regional states, thereby easing free movement of specialized services across the region thus facilitating free movement of professionals across the EAC. Currently, professionals including veterinary doctors, accountants, architects, and engineers, among others cannot freely export their services in the region. According to Nesbitt, the challenge is that some partners have not liberalized some services sectors under the MRAs while others lack regulatory authorities to facilitate implementation of the MRAs. “Tanzania has not liberalized the architectural and veterinary services while Kenya has not liberalized the veterinary services,” said Nesbitt. To overcome such challenges, the East African Business Council wants the EAC member states to finalize the signing of all pending MRAs alongside liberalizing of professional services where MRAs have been negotiated among the member states. Furthermore, to ease the movement of professional skills in the region,...

East African Community partner states continue to introduce tariff and non-tariff barriers that are hindering intra-regional trade and putting integration at risk. Manufacturers of confectionery in Kenya, oil and fats in Uganda and a wheat and juice producer from Tanzania reported encountering tariff and non-tariff barriers that blocked them from entering regional markets. Yasin Billo, export manager of Tanzanian industrial conglomerate Bakhresa Group, said the company currently has 15 trucks stuck at the Tanzania-Kenya border because the Kenya Revenue Authority changed the rules and systems for exporting goods to the country. However, Tanzanian Commissioner for Customs and Excise Ben Usaje said Bakhresa Group believed they were being mistreated because of the continued dispute over Kenyan confectionery. Customs officials in Tanzania have blocked Kenyan confectionery products because they were allegedly manufactured using sugar that was imported at zero rate, instead of the EAC’s 100 per cent CET. Sugar dispute In 2017, Kenya faced a sugar crisis that prompted importation of sugar at a zero tariff. Under the EAC regulations, this rate should have been 100 per cent, since sugar is a sensitive product that needs protection from dumping. Mr Usaje said it is this sugar that the confectionery manufacturers are using and such products will not be allowed into the Tanzanian market unless a 25 per cent import duty is paid on them. Mr Usaje added that Kenyan confectionery will not enjoy duty free rates in the Tanzanian market until the EAC forms another committee that declares their processes legitimate. An...

Last week, while addressing the United Nations General Assembly in New York, the Secretary General of the United Nations Centre for Trade & Development Dr Mukhisa Kituyi expressed concern at the frequent arrests of petty traders across African borders. As UNCTAD Secretary General Kituyi should know the challenges that face cross border trade. A random 23-year old Tanzanian woman trader has a pretty good idea what it feels like to have 5,000 day old chicks razed to ashes when she not so long ago borrowed money and invested in what she thought was a life changing, one-time, opportunity. She lost all her investments and was the subject of an intended prosecution for conducting illegal business against known Tanzanian Laws. Welcome to how Africa operates. It’s a jungle out here where proximity does not mean the same thing as closeness. Where Marwa Chacha who lives in Suba-Kuria district in Migori County in Kenya is not expected to share milk let alone trade it with Chacha Marwa whose residence is 500 metres away in Sirari in Mara Province. Government functionaries will read a riot-act of operational rules that are intended to protect the interests of local trade from cross border “greed” and interests. The rules are great in as far as intent is concerned. The trouble with these rules is that they are a coinage of the colonial era of cold-war divisions that were meant to achieve economic enclaves through blockades. These economic enclaves were by definition meant to be sources of...

The African continent contains some of the fastest growing economies in the world. Collectively, growth in Sub-Saharan Africa alone is projected to climb to an average 3.6% in 2019–20, up from 3.1% in 2018, according to the World Bank. Yet it is also home to many of the poorest countries, with the lowest GDP per capita. With its fast-growing population, rapid urbanization, and expanding middle class, the potential for further economic growth in Africa is enormous. But there remain many barriers to realizing anything near the continent’s full potential. In this supplement, we explore some of the most significant and promising forces breaking the old barriers to free trade and communication.  Prominent among these is the recently concluded African Continental Free Trade Agreement (AfCFTA), whose implementation by all 55 members of the African Union would create a new $3 trillion trade bloc that has the potential to transform historically low levels of intra-African trade. Larger and more integrated markets mean greater specialization and scaling up of production, boosting value-adds and helping to integrate African producers into global supply chains. Greater scale and larger markets should in turn make African hubs more attractive to international investors. But for intra-African trade to grow substantially, civil infrastructure, and particularly overland transportation links, need to improve. We examine the role of Chinese banks and companies in building new railways and other transport infrastructure and refurbishing older facilities, which has had a particularly large impact in East Africa. This could provide a model for other...