Two senior IMF officials, writing in their personal capacities, recently offered some insight into what the East African Community (EAC) will be up against in the run-up to having a Monetary Union. It will not be easy. The Union is scheduled to come into effect in 2024 when, hopefully, EAC member states will be using a common currency. However one basic point that Paulo Drummond and Oral Williams made very clear, is the need to have the building blocks firmly in place. In this way, the sequencing of reforms, all tied to achieving economic convergence, will be much easier. Not surprisingly, due to the relative success of the European Union euro single currency, the EAC is also following the same path. Although not all the EU members are part of the euro pact, it is fortunate for the EAC to have a living example of what to expect. From the time a decision was made to have a single currency to minting the first coin, took the Europeans 18 years. The EAC wants to do it in less time, specifically over 10 years. Events in Burundi have put a damper on things. Regional stability is essential for any chance of a successful transition period. Consequently, this crisis has to be resolved as quickly as possible. According to Drummond and Williams, as cross-border activities increase, national central banks will need to adopt a consolidated approach to banking supervision in order to avoid difficulties in a bank’s operations in one country spilling...

SOUTH Africa and the other Brics (Brazil, Russia, India, China) nations need jobs, growth and greater competitiveness. Europe needs jobs, growth and greater competitiveness. The USA needs much the same. Better trading terms are a key way to secure these goals for businesses and for consumers. They can act too through a multiplier effect in a complex set of value chains and SME (small and medium enterprises) supply systems. The World Trade Organisation (WTO) plays a key role in the adjudication of multilateral trade agreements and their implementation and enforcement, but has been left playing a less dynamic role in recent years – with the failure so far of the Doha Round – in the negotiation of major multilateral deals. It secured the Bali trade facilitation deal recently with helpful customs progress but even that was a somewhat tortuous process. Bilateral, plurilateral and issue-specific deals are therefore filling the negotiations void left by the WTO. These are aimed at driving progress and at helping prevent any nascent protectionism. The EU and US have both concluded deals with Korea. And the EU with Canada and with Singapore and, on goods for example, with the East Africa Community (EAC). The EU has embarked on a major bilateral programme including with the US (TTIP – a potentially landmark agreement in going beyond tariffs into the depth of regulatory coherence and convergence), with Japan, with some Asean and Latin American nations, and potentially with India. It has also started an investment agreement dialogue with...

KABANDA CHULU, Lusaka PLANS to launch the grand free trade area (FTA) that will bring 26 countries in the tripartite regional economic blocs into one common market have advanced. Heads of states and governments are expected to append their signatures on the FTA on June 10, 2015, in Egypt, according to the COMESA website. The Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC), and East African Community (EAC), Tripartite FTA (TFTA), comprising 26 countries or 48 percent of the membership of the African Union holds 51 percent of its gross domestic product and 56 percent of its population will be the largest economic bloc in Africa. This will also be the launching pad for the establishment of the continental free trade (CFTA) in 2017. "The advance teams will start arriving at the venue from June 5 for the technical meetings that will prepare the ground for the launch. The tripartite committee of senior officials and the council of ministers will be part of the advance team and their pre-launch meetings will take place on June 7and 8." “They will prepare the launch documents including the TFTA agreement, the declaration launching Phase II of the negotiations for the TFTA and the roadmap,” it stated. The decision to establish the COMESA-EAC-SADC TFTA was mooted in 2008 to overcome the challenges posed by the overlapping membership of the three regional economic blocs, especially in the regional trade. Zambia has dual membership in COMESA and SADC. Source: Zambia Daily...

The South African Development Community (SADC) in yellow, the Common Market for Eastern and Southern Africa (COMESA) in different shades of green and the East African Community (EAC) in the light brown (the only country in the EAC that isn’t also a member of COMESA is Tanzania). That map is from 2009 so doesn’t include South Sudan. In a recent note, Capital Economics named Africa as one of the world’s few potential bright spots as far as boosting global trade is concerned: Over a longer time horizon, sub-Saharan Africa could also play a much larger role in world trade… If sub-Saharan Africa can sustain the pace of GDP growth seen over the past ten years, its share of the world economy could more than double over this time. While this would not be as dramatic as China’s rise over the past 35 years, it does still imply that Africa’s share of world trade will rise substantially from where it is today. Given the development levels and divergence of the countries involved, progress is likely to be slow — but the Tripartite Free Trade Area would be a big step in the right direction. The world is just about to get a free trade area that’s bigger, by population, than either the European Union or NAFTA. It’s got nothing to do with the much-publicised Trans-Pacific Partnership (TPP) Transatlantic Trade and Investment Partnership (TTIP). In fact, you’ve probably never heard of it. It’s actually the Tripartite Free Trade Area, a deal that...

Agriculture accounts for 30% of the gross domestic product (GDP) of EA and it employs over 60% of the population of East Africa. In East Africa, it is reported to have annual value of $50b and this represents a 75% of the Agricultural products being traded from the commodities like maize, rice, potatoes, cassava, beans, wheat among others. Agricultural performance is critically important to pro-poor growth since it employs over 75% of EAC member population, where the majority of them live in rural settings. The sector provides a basis for improvement of livelihoods in both rural and urban populations. Despite the importance of the sector to the EAC economies, reviews of public expenditures and programmes that was recently conducted by Civil Society Budget group and other partners like Action Aid, Uganda Debt Network, Food Rights Alliance and ESAFF, indicates that, the input and output from Agriculture has continuously kept declining where inputs being the lowest in the sectors of the economy and is registered being below the National Development Plan target of 4.9% for the case of Uganda. Besides the decline in the East Africa member states with an exception of Rwanda have not prioritised Agriculture in their public spending to the extent that the sector receives less than 4% of the national budgets. This, therefore, calls for the Government and other partners to ensure that there is increased public financing for the sector in East Africa and need to invest more in Agriculture to better support the economies. The...

Officials this week met with several actors in the professional service sector in the country, to examine challenges that hold them back with regard to taking their expertise beyond the country’s borders, particulary to the other EAC partner states. But it was noted that, for this to happen, local professionals needed to first gain a foothold in the local service sector, since major projects were dominated by foreign contractors. And professionals in attendance acknowledged they have a long way to go. The observations came up during a national consultative meeting on the issue–the first of its kind– in Kigali on Tuesday.Eng. Fred Rwihunda, the president of Institution of Engineers Rwanda (IER), said despite the existing framework under the Common Market Protocol, which eases movement of labour among citizens of member states, few Rwandan professionals are crossing borders and getting employed in the other partner states. He attributed this mainly to lack of organisation and what he described as a poor mindset, which they need to act up on, if they are to maximise the benefits that come with regional intergration. “Are we even satisfying the Rwandan market before we cross the border? Even various projects here are handled by foreigners,” Rwihunda said. Rwandan professional service providers, he said, should first get organised and smarter before attempting to venture into the wider region. The forum was convened so that the Ministry of East African Community can understand why, among others, local professional services are not taking advantage of the EAC market....

The irking story of high costs of doing business in the East African region is slowly changing to high returns, thanks to the implementation of the Single Customs Territory (SCT). At the bottom line is the execution of the Customs Union Treaty that seeks to promote cross border trade and attract investment into the enlarged regional market with minimal formalities in customs clearance. The Director for Taxpayer Services and Education at the Tanzania Revenue Authority (TRA), Richard Kayombo said in an interview that the system started with few goods and the number is progressively being increased to full-fledged. Kayombo also said that some of the goods that were assessed during the piloting period include rice, maize, sugar, neutral spirits, cigarettes, petroleum products, wheat, salt, edible oil and pharmaceutical and cosmetic products. “The story has changed in many aspects. For example, we currently talk of three-day travel from Dar es Salaam port to Kigali and only three blocks up to the Rwanda border,” he said. He said also that at the first point of entry, depending on the level of risk, customs officers from the destination country, who are posted at the first point of entry, can subject the goods to physical examination before release. He added, the system has called to an end cheating and dumping of transit goods into the local market because the cargo clearance goes together with the payment of all taxes. Customs declarations are made electronically and processed and released by the authorities from the country...

East African Community Headquarters, Arusha, Tanzania: 28 May 2015: The Chairperson of the Summit of the EAC Heads of State H.E. Jakaya Mrisho Kikwete has convened an Emergency Summit on the situation in Burundi to take place on Sunday, 31 May 2015 in Dar es Salaam, The United Republic of Tanzania. The Emergency Summit is a follow-up to the 13th Extraordinary Summit of the EAC Heads of State held on 13 May 2015 also in Dar es Salaam, Tanzania. The Emergency Summit shall be preceded by a meeting of Ministers/Cabinet Secretaries of the EAC Partner States to take place on Saturday, 30 May 2015 in Dar es Salaam, Tanzania. The Chairperson of the African Union Commission, H.E. Nkosazana Dlamini Zuma, is among the leaders that have been invited to attend the Emergency Summit on Burundi. Others include South Africa’s President H.E. Jacob Zuma and Angolan President H.E. Eduardo dos Santos, who is the current chair of the International Conference on the Great Lakes Region (ICLGR).The Secretary General of the United Nations (UN) will be represented by his envoy to the Great Lakes region.​ Media Alert All Foreign and Local Journalists intending to cover the Emergency Summit are alerted that the Accreditation Process will commence from tomorrow, Friday, 29 May 2015 at the Maelezo offices (Tanzania Information Services-TIS) located on 9th Floor of the Golden Jubilee Towers on Ohio Street in Dar es Salaam, Tanzania. Source: East African Community

After 30 days of demonstrations and police confrontations following Burundi President Pierre Nkurunziza's gamble for a third presidential term, 25 people are reported to have been killed. The wounded are reportedly standing at 450. Concerns are mounting in Burundi and around the world about the risks of the conflagration in the country and the Great Lakes region. The East African Community (EAC), of which Burundi is one of five members, comes under increasing pressure from the African Union, the United Nations and Burundi bilateral partners, to take action. In fact, the Burundi crisis puts EAC members in a quandary. They could push Nkurunziza out or let him proceed to elections. Whichever option they take, they know that it will be precedent setting in the broader region. An EAC summit on Burundi is scheduled for Sunday in Dar es Salaam, 18 days after the first was called off amidst an attempted military coup in Bujumbura. The request by protesters that Nkurunziza withdraws from the presidential race is based on the Accord for Peace and Reconciliation in Burundi signed in Arusha, Tanzania (the Arusha Accord), in August 2000. It clearly states: "No one may serve more than two presidential terms." A six-hour drive from Bujumbura, Uganda's President Yoweri Museveni, reflects the dilemma facing the region. An Africanness champion, Museveni chaired and led the "Regional Initiative for Burundi" which for eight years, managed to broker the difficult Arusha Peace Accord. For the Ugandan leader and for Africa, giving in to Nkurunziza's third term...

African countries have been urged to pursue policies aimed at fast-tracking integration of the continent into a global economy. Foreign Affairs and International Trade Cabinet Secretary Amina Mohamed said it was time for Africa to pursue an economic integration agenda that would ensure the continent is at the centre of global economic growth. “Countries should seek new partnerships and take advantage of emerging markets and opportunities and lower trade barriers to leverage trade for sustainable development,” she said. Africa, she added, should expedite the process of building a Free Trade Area (FTA) currently at embryonic stage. Mohamed said Heads of State are ready to initiate the negotiation process when they meet in South Africa in June for the forthcoming summit, a move she noted would demonstrate a high level political commitment by the African leaders that time is ripe for Africa to pursue its economic agenda and integrate fully into the global trading system as a focused entity. “Such partnerships are in a category of their own by dint of their scope and their impact are most likely to create a symmetry in a global trade area,” she said at the opening session of the conference on mega trading blocks and the future of African trade at a Nairobi hotel yesterday. She said it was crucial to interrogate potential impact of mega–regionals with a view to formulate requisite response on how such agreements are likely to affect all involved. Mohamed said African economies need to urgently deepen domestic economic reforms,...