Posted on March, 19, 2019 at 08:58 am
By Martin Mwita
The journey to achieving a fully-functional East African Common market is yet again in limbo given the current spat between Uganda and Rwanda, where daggers have been drawn over political and trade differences.
Standoff between the two countries is now threatening discussions around key statutes on regional integration which is already facing a number of challenges including inadequate and poor regional infrastructure and contrasting legal and regulatory frameworks.
Trade embargo
Uganda has accused Rwanda of imposing a trade embargo while Kigali has accused Kampala of hosting anti-Kagame rebel groups, a move that has led to issuance of travel advisories and closure of borders which has hampered trade and movement of persons.
Experts warn that if a truce is not reached in the shortest time possible, the current differences in the region will hurt a number of processes among them the ongoing discussion to harmonise the EAC Common External Tariff (CET), an annex of the EAC Customs Union Protocol which guides duty charged on imported products into the community.
The region could fail to synchronise tariffs for different products which are affecting seamless flow of goods as East Africa lags behind in intra-country trade.
While regional trade within the East African Community is close to 26 per cent, it is relatively low compared to other blocs such as the Southern African Development Community (SADC) at 47 per cent and European Union at 67 per cent, which is a big concern to the EAC secretariat. Liberat Mfumukeko, EAC Secretary General, says that every single time goods cannot move, businesses suffer.
“When business people cannot cross their goods to another country whether it is from Uganda to Rwanda, or Rwanda to Uganda or Tanzania to Kenya, and every single time we face these situations they are detrimental to businesses,” he said at a recent press conference in Nairobi.
The current situation is also likely to derail some of the decisions and directives issued during the Heads of State Summit in Arusha in February. During the 20th Ordinary Summit, the heads of state received a report on the status of ratification of protocols and directed EAC members to ratify all outstanding protocols and the Council of Ministers to report to the 21st summit.
The summit noted the status of resolution of long outstanding non-tariff barriers (NTBs) and directed partner states and the council to resolve them.
Lack of unity could also derail the verification exercise for the admission of the Federal Republic of Somalia into the EAC.
Other programmes likely to be affected are the promotion of motor vehicle assembly in the region aimed at reducing importation of used motor vehicles from outside the community.
EAC’s quest to have a strong and competitive textile and leather sector that gives consumers better choices than imported textiles and footwear could also be affected. Countries have also been struggling to fulfil their financial obligations to the community.
Important market
Kenya’s Cabinet Secretary in charge of East African Community and Regional Development, Adan Mohamed is already on record warning that any stalemate among the East Africa member states is a threat to trade and regional integration.“EAC is an important market for us.
Trade gets facilitated at border points and that is why our borders are important. If there are any blockages along the border points, it is likely to be disruptive,” he said. “If there is a problem between Uganda and Rwanda it becomes a problem for all of us. It is a problem that needs to be solved by the sovereign states,” Adan said.
East African Business Council chairman Nicholas Nesbitt said business community in the region is already feeling the effects of the standoff between Uganda and Rwanda.“We have heard complaints from our members in Uganda and Rwanda and even from our members in Tanzania and Kenya. Everyone along the supply chain is affected,” he said.
Source: MediaMax Network