Regional
Ease of doing business across EAC should be the priority of all organs
![image](webadmin/images/blob.jpg-20220312102210000000.jpg)
It’s
23 years since the re-establishment of East African Community (EAC) and time to
address what more we collectively need to do to realise the dream of East
Africa being a prosperous and vibrant economic bloc.
Our
bloc is widely recognised as the most integrated and fastest growing regional
economic bloc in Africa. It has been 17 years since the formation of the
Customs Union and 12 years since the implementation of the Common Market
protocol, and a tremendous amount has been done to win such accolades.
It
is expected to return to such high levels going forward.
In
March 2020, the pandemic disrupted global supply chains following introduction
of measures to contain the spread of Covid-19 such as closed borders, social
distancing, partial and complete lockdowns. Also, a global shipping crisis
disrupted and lengthened supply chains, precipitated by the increase in
eCommerce and the ability for shipping lines to locate and use shipping
containers. The EAC was not spared from these harmful macroeconomic impacts.
Fortunately,
the regional industries responded quickly and reinvented and realigned their
supply chains in sourcing raw materials. The East African Business Council
(EABC) applauds the EAC Heads of State for allowing the movement of cargo
during the pandemic’s peak, which built resilience of the private sector and
contributed immensely to the growth of intra-EAC trade. Such large scale trade
exhibited greater resilience than the extra-EAC trade.
Unfortunately,
small-scale cross-border trade collapsed from an average of $44 million in the
first quarter of 2020 to $1.15 million by the end of November 2020 because of
the Covid-19 restrictions such as lockdowns and curfews.
This
drop exposed the significant differences in policies between the different East
African countries, creating damaging consequences and non-tariff barriers, such
as the infamous truck traffic snarl-ups at border crossings, unanticipated
taxes and tariffs, random and unpredictable policy changes regarding who can
drive trucks across borders, and different charges and testing criteria for
acceptable Covid tests.
Let
policy makers urgently address these conflicts to simplify and expedite trade.
One priority is a common EAC vaccination pass and mutual recognition of
Covid-19 test certificates to ensure truckers and traders move across borders
quickly and efficiently, to enhance resilience and recovery of the EAC bloc.
The
pandemic tested the cohesion of our integration and now must drive us to
rethink how we operate within and across our internal regional borders.
Regionally,
we have introduced policies and technology that greatly minimises losses and
violations, meaning goods and people should now be subject to far fewer
physical inspections.
We
have instituted pre-arrival clearance of cargo, regional Customs bonds,
electronic seals, regional electronic cargo and truck driver tracking systems,
etc. There should be no reason truckers take 3-5 hours at a One-Stop Border
Post where officials need to facilitate trade and simply verify documents
quickly!
Border
agencies verifying cargo slowly increase the cost of doing business and reduce
competitiveness of products made or bought in East Africa.
Nevertheless,
we have made progress.
Under
the leadership of the chairman of the Summit of the EAC Heads of State,
President Uhuru Kenyatta, EAC witnessed better bilateral trade ties, positive
prospects of DR Congo joining the EAC, and the region has ratified multiple
treaties, such as the African Continental Free Trade Area Agreement, the World
Trade Organization Trade Facilitation Agreement, and the EAC Sanitary and
Phytosanitary Protocol by the EAC Partner States, and the EAC Secretariat and
Private Sector have vastly improved their levels of engagement.
Political
goodwill
We
applaud Presidents Paul Kagame and Yoweri Museveni for recently reopening the
Gatuna/Katuna border, as bilateral trade between Uganda and Rwanda trade had
slumped by over $200 million due to the closure.
Nevertheless,
the EABC is very clear about what further needs to be done including
implementing open skies, the EAC Common External Tariff, addressing unfair
cheap imports and, finalising and implementing the Standardisation,
Accreditation and Conformity Assessment Bill, 2017 in a bid to develop a
regional technical regulations framework.
EAC
member states equally need to harmonise domestic taxes, sign the EAC
multilateral tax agreement, establish the EAC Trade Remedies Committee, and
finalise concessions to AfCFTA.
In
closing, in line with our EABC objectives of making East Africa a much easier
place to do business, East Africans must “come together bring down all trade
barriers.” The drive to tear down colonial boundaries to unlock trade and
prosperity is long overdue!
Nicholas
Nesbitt is chair of the East African Business Council
Source:
www.theeastafrican.co.ke