EAC slow to open up

KAMPALA, UGANDA - Partner states of the East African Community (EAC) are slow to open up their domestic markets and non-tariff barriers continue pose a problem, especially the liberalisation of services across the region.

The second EAC Common Market Scorecard (CMS) 2016 which evaluates implementation of the EAC Common Market Protocol was launched last week in Kampala by the EAC Deputy Secretary General in charge of Finance and Administration, Jesca Eriyo.

Scorecard 2016, measures Partner States’ compliance to the free movement of capital, services, and goods and was developed by the World Bank Group together with TradeMark East Africa (TMEA) at the request of the EAC Secretariat.

The Scorecard was developed over a period of 18 months under the supervision of the EAC Secretariat and Partner States. The areas of capital, services and goods were selected for scoping as they are fundamental to the operations of the Common Market.

Eriyo said, “A number of reforms have been undertaken since the 2014 CMS.  These have brought the total number of non-conforming measures (NCMs) down from 63 in 2014 to 59 in 2016.  While this shows progress it should be noted that all EAC Partner States remain largely non-compliant in their services trade liberalization commitments.”

Commenting on the latest results, Eriyo said the Scorecard is well aligned with the EAC’s implementation priorities. “It fosters peer learning and facilitate the adoption of best practice in the region. The Scorecard will contribute to strengthen the regional market, grow the private sector and deliver benefits to consumers.”

According to the results, recognition of certificates of origin is identified as a key sticking point and an issue repeatedly identified as a significant non-tariff barrier (NTB) in 2014. The Scorecard shows Burundi continues to earn full points and Kenya continues to score 90%.  Tanzania’s recognition of certificates of origin has improved from 50% to 60%. However scores for Rwanda and Uganda have declined, indicating a worsening performance in terms of recognizing certificates of origin of other EAC Partner States. She said most countries improved their score on applying tariff equivalent charges, however such charges persist as barriers to intra-EAC trade.

Eriyo said the EAC average of resolution of new NTBs for the 2016 period was about 54%, better than the 38% rate for CMS 2014.

She called for greater information sharing regarding the Treaty and Protocol provisions in the Partner States. Some members of the private sector, including private sector apex bodies, were unfamiliar with the Protocol or with the commitments affecting their operations.

Eriyo asked Partner States to engage and inform the private sector on the implications on these reforms on their day-to-day operations across the region and develop a private sector reform champions who could help push for implementation. Catherine Masinde, the Practice Manager, East Africa, Trade and Competitiveness, World Bank Group, said, EAC Partners have done a commendable effort in removing barriers to free movement of capital, services and goods, but more needs to be done.

She said the EAC Scorecard provides transparent, rigorous, unbiased and client-led data on the key implementation gaps to the integration of the region’s economies. “It also highlights possible reform areas to improve compliance to the Common Market Protocol,” she said.

Kassim Omar, the Vice Chairman of East African Business Council (Uganda) , said it is important to measure the extent to which the EAC Partner States are translating the Common Market Protocol into policies that support actualization of free movement of people and workers, goods, services and the rights of establishment and residence within the EAC.

Richard Kamajugo, TMEA Senior Director in-charge  of Trade  and Environment,  said the TMEA Program of support to the Common Market Scorecard has been running from 2012 to march 2017,under the EAC Investment Climate Programe.

He said the total budget support to the program is $10.4million,  through the International Finance Corporation (the World Bank Group private sector lender) and EAC (technical support), under a five component program aimed at increasing  inter and intra-regional trade and investment  through investment climate reforms supporting the EAC Common Market.

According to the World Bank full implementation of the Common Market Protocol  has the potential to build economies of scale, accelerate competitiveness, and bring the region closer to achieving its dream of a single investment destination.

The Common Market can expand opportunities for the private sector and uplift the living standards of its citizens in a way that no partner state can do on its own. The Bank says full implementation of the Common Market is a challenging task. It calls for strong implementation by all parties, particularly the Partner States, so as to deliver the rights and freedoms enshrined in the EAC Common Market Protocol. This requires a robust implementation cycle: including planning, implementation and monitoring of progress.

The Scorecard contributes to monitoring the implementation of the common market by tracking progress of Partner States in fulfilling their commitments as provided in the protocol. It examines selected commitments made by the partner states, outlines progress in removing legislative and regulatory restrictions to the protocol, and recommends reform measures.

Source: East African Business Week