THE East African Business Council (EABC) has launched a policy agenda that would spur East African Community (EAC) intra-trade by 30 per cent.
EABC in partnership with the Federation of German Industries (BDI) virtually convened trade and policy meeting that was attended by experts from the EAC partner states and charted out a joint regional policy advocacy agenda for the intra-EAC trade growth.
Making the revelation in his opening remarks at the meeting over the weekend, EABC Chief Executive Officer (CEO) Dr Peter Mathuki, further said Covid-19 pandemic disrupted regional and global supply chains leading to contraction of intra-EAC trade and causing US $37bn to US$79bn loss in the bloc.
"The Covid-19 pandemic has compelled EABC to refocus and re-purpose policy advocacy initiatives towards economic resilience and rebound including stimulus packages to support business continuity,” he added.
According to the EAC Trade & Investment Report, 2018, EAC exports decreased by 4.7 per cent to US$ 14bn in 2018 from US$14.7bn in 2017, of which intra-EAC exports accounted for 22.4 per cent. The trade deficit for the EAC region increased by 39.4 per cent to US$ 24.3bn/- in 2018 from US$17.4bn/- registered in 2017.
At the top of the EABC Policy Agenda 2021/22 aimed at spurring intra-EAC trade and investment, elimination of persistent Non-Tariff Barriers (NTBs) and implementation of trade dispute settlement mechanism featured a lot in the debate.
Also in the cards were harmonising product standards and work permitting regimes, liberalising trade and services, free movement of capital as well as harmonising domestic taxes jointly in the region.
“Concerted advocacy efforts are needed to fast track the finalisation of the comprehensive review of the EAC Common External Tariff to boost industrialisation and regional value chains,” pointed out Dr Mathuki.
However, he urged the experts to reposition the bloc business community to become at the centre of the negotiating emerging opportunities such as the AFCFTA, EAC-UK partnership agreement and EAC-US Trade and Investment Partnership.
On his part, the Federation of German Industries (BDI) Head of the International Cooperation, Security, Raw Materials and Space Department, Mr Matthias Wachter noted that their umbrella association of German industries sees vast potentials to tap in Africa through the German private sector cooperation.
“Strengthening regional integration translates into large markets of opportunity. The African Free Trade Area (AfCFTA) has the potential to become a game-changer and significantly boost intra-African trade. In the long run, it can also foster investments and trade between Africa and Europe. The implementation will be crucial," said Mr Wachter.
He was of the view that though the Covid-19 enforced the need for economic reforms, still there was a need to harmonise response and policy approach in addressing its effects, saying: “This would enhance collaboration and create synergies among the EABC, National Apex Business Associations and Chambers of Commerce in the region and it is important towards informing and harmonising policy advocacy initiatives and reflect business challenges experienced at the national level.”
The Regional Policy Advocacy Agenda aims to harness the economic potential of the EAC by analysing trade and investment barriers, blocking businesses to take full advantage of the EAC Customs Union and Common Market.
Regarding EABC Agenda 2020/2021, EABC Chairman, Nicholas Nesbitt urged the EAC governments to facilitate a conducive business environment in the region for quick recovery of the economy and businesses from the impact of Covid-19 pandemic as well as ensuring businesses continue to tap into the opportunities availed by the EAC Common Market of over 177 million people with a combined Gross Domestic Product (GDP) of over US$193bn.
The EABC Policy Advocacy Agenda 2020/21 highlights critical challenges constraining the private sector to fully take advantage of the opportunities availed by the EAC regional integration agenda. Most of these challenges emanate from the failure of EAC partner states to implement the agreed commitments and decisions made at the regional level.
Some national governments have been reluctant to implement the agreed commitments, policies and regulations that may be beneficial or strategic from a regional perspective, though not of immediate priority at a national level.
Development of the Policy Agenda saw EABC Secretariat involving the National Business Apex Associations, Manufacturers' Associations and Chambers of Commerce across the EAC partner states in its development via the EABC Technical Advocacy Coordination Team (TACT).
The draft Agenda by TACT was then circulated to EABC members for comments before it was approved by the EABC Policy Advocacy Committee.