Arusha — Total intra-African trade rose to a record $ 1.164 billion in 2006 from $778 million in 2004, East African Community secretary general Juma Mwapachu declard here yesterday.

He said despite some hitches, the EAC Customs Union which became operational in January 2005 has boosted trade, investments and production in the EAC partner states.

The increase in total intra-trade within the region from $778m to $1.164 bn was shared by the original EAC member states, namely Tanzania, Uganda and Kenya.

Total taxes derived from trade in the region also rose in the three original Community member states, debunking earlier fears that member countries to the regional economic bloc wiil experience lower tax revenues following the adoption of the Customs Union.

Mr. Mwapachu was addressing business executives from the five EAC partner states at the start of talks aimed at sensitising the business community and other stakeholders on the proposed East African Common Market.

The EAC chief executive admitted that non-tariff barriers continue to a stumbling block to intra-regional trade, noting that the barriers ranged from administrative and legislative measures to infrastructure hindrances.

Officials of the EAC secretariat were working with the East African Business Council to find ways of tackling the various problems which, he said, escalated the cost of doing business.

He said the envisaged EA Common Market would, among other things, focus on minimising existing economic disparities that have negatively impacted on the national economies of EAC states.

"One way of dealing with such disparties is to harmonise at the regional level the respective legal architectures that directly impact on operations of the Common Market," he told government officials and representatives of business firms and associations at Ngurdoto Mountain Lodge outside Arusha.

These relate to national investment laws, domestic tax laws, company laws, labour laws and land laws of each respective country, among other aspects, he pointed out.

The EAC recently secured a grant of Euro 2.2 m from Germany to support harmonisation of domestic tax laws in the EAC partner states.

According to Mr. Mwapachu, the regional body is in the process of presenting a major proposal to the African Investment Climate Facility to secure funding for undertaking a study for the harmonisation of the relevant laws.

The East African Law Society, a regional legal body based in Arusha, would be involved in drafting proposals for the harmonisation of the specified laws, he said.

Introducing the EA Passport, the relaxation of visa requirements at border crossings and harmonisation of student and tourist fees were among the few aspects of the Common Market already in place.

The SG noted that efforts were underway through the central banks of all five EAC partner states to forge greater monetary policy convergence, including capital account liberalisation at the regional level, and moves towards a common currency area.

The proposed common market must be supplemented by a regional industrialisation and investment strategy that unleashes new opportunities and economic gains of integration, he emphasised.

EAC member states, namely Tanzania, Uganda, Kenya, Burundi and Rwanda two weeks ago agreed that the time frame agreed by the partner states towards the formation of a common market must be concluded by the end of this year.