Single customs territory key in EAC economic integration

Single customs territory key in EAC economic integration

SINGLE Customs Territory (STC) has been singled out and proved as a critical East African Community (EAC) programme to enhance economic integration in the region.

As the bloc rounds off its five-year priorities (2017 – 2021), independent evaluation has shown that STC will support poverty alleviation by enhancing trade, through a range of interventions implemented at the national and regional level.

Results of the UK Foreign, Commonwealth and Development Office (formerly DFID)-commissioned independent evaluation of TradeMark East Africa (TMEA) programmes shows a lot of positive products in the programme registered as one of its seven set priorities.

According to a senior trade economist, Mr Max Mendez-Parra, the key imports are that EAC SCT contributes significantly to the reduction in transport spent duration, trade costs and risks associated with diversion of goods destined to landlocked countries. It is also a critical enabling factor contributing to the results generated by One Stop Border Posts (OSBPs).

In a synthesis produced after a thorough research, it was indicated that there will also be much competition among partner states and respective corporations. An example is an increased competition between the port of Mombasa in Kenya and Dar es Salaam (Tanzania) to attract cargo, given that four of six EAC partner states are landlocked.

Speaking at EAC Headquarters last week, EAC Secretary General, Ambassador Liberat Mfumukeko stressed on the importance of EAC Customs Union and Common Market protocols that he said were basically aimed at promoting intra-regional trade, free movement of persons, labour, capital, services and investment in the region.

The SG further disclosed that the bloc had made efforts to harmonise the financial sector in the region with the support of the World Bank principally in sectors such as banking, capital markets, trading in bonds and cross border payment systems.

He said that EAC was undertaking tangible programmes and projects to realise the dream of an integrated region and was appreciative with support from different stakeholders for the region to be an SCT, hence guarantee foreign countries access to the wider East African market.

Implementation of SCT aims to harmonise and simplify customs procedures, eliminate the duplication of procedures and requirements applied by all the revenue and customs agencies of the EAC members. 

The harmonisation and simplification aims to ensure that goods arriving to the EAC pay the same duty and are subject to the same customs procedures regardless of their port or border of entry.

That has significant effects in that it increases transparency and certainty for traders as well as puts pressure on infrastructure operators, especially in ports, to improve quality of services as they cannot benefit from rents associated with cumbersome processes in competing ports.

The independent evaluation indicates that the support to the EAC SCT is relevant and effective in achieving TMEA objectives of growing prosperity through trade.

There has been a commitment to an open and participative process in the design and implementation of interventions and that has led to longer timeframes and some unavoidable delays.

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