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EAC summit triggers business optimism

A RENEWED sense of optimism for East Africa intra-regional trade is in the offing following the successful 20th Ordinary Summit of the East African Community (EAC) Heads of State in Arusha last week, where our leaders expressed commitment to tackle four major challenges that inflate cost of doing business in the region.

The immediate past EAC Chairman, President Yoweri Museveni of Uganda mentioned electricity, transport, labour, and finance as major stumbling blocks in promoting intra-regional trade, which despite growing in aggregate volume, has remained below its potential.

The total intra EAC trade has increased to 5.3 billion US dollars in 2017 from 1.342 billion in 2004, while the total EAC exports to the world rose to 14.7 billion US dollars in 2017, up from 4.182 billion US dollars, according to the EAC Trade and Investment Reports.

That is absolutely no mean achievement; however, we can still do better when we tackle the challenges as our own drawbacks.

As we prepare to mark 20 years of regional integration later this year, we are thankful that we have more vibrant economies, increased trade, and improved infrastructure. The EAC is deservedly in the global spotlight as the most promising regional economic community, thanks to the significant achievements made so far. For instance, to Customs Union, Common Market and under monetary union pillars.

Just to mention a few, under customs union, we now see drastic reduction of time taken to clear goods at border posts from over 20 days to three to four days along the Central and Northern corridors, thanks to the construction of one-stop border posts, which have combined activities of both the countries’ border organisations and agencies at a single location in each direction.

Under the Monetary Union Pillar, programmes for harmonisation of Capital Markets and Payment Systems are ongoing.

The Community has harmonised critical policies necessary for a sustainable Monetary Union and remains firmly on course towards attaining a single currency by the year 2024.

However, apart from the main challenges mentioned by President Museveni, we see that we need to overcome the problem of non-tariff barriers, which continue to rear its ugly head despite several high-level commitments to redress it.

The EAC partner states had agreed in December last year to make trade between them and with other countries cheaper, faster and more straightforward to boost economic integration in East Africa.

This was during an EAC ministers’ meeting in Nairobi, Kenya where they pledged to implement trade facilitation reforms including tackling the problem of “non-tariff barriers” to hinder intra-regional trade through mechanisms other than the simple imposition of tariffs.

That is the crux of the matter and we see a political will from the summit to build on the progress in tackling the problem through available mechanisms within the community.

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Author: EDITOR

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