Joseph Bonyo
22 October 2008
Nairobi — The proposed integration of the three economic blocs is expected to focus on trade, infrastructure and movement of persons.
Meeting under the banner of Tripartite Summit, the Regional Economic Communities, the Kampala parley is expected to provide direction on these key issues.
Already, a Memorandum of Understanding (MoU) to be signed by the 26 member states has been drafted. The signing is expected to be in six months time.
However, there are several questions that have come up in the wake of the proposal. The issues are closely linked to the objectives of integration and benefit to both businesses and individuals.
As an initial step, the MoU has pointed to the creation of a Free Trade Area to boost trade in the larger community. The business community in the region will therefore be warming itself to a bigger market for its good and services.
Faced with high duties and rising cost of production in local markets, businesses will be looking at opportunities to maximise on wider and free markets.
An FTA would ensure that goods and services from member states are not charged any duty within the larger region.
"This will also serve as a solution to the multiple membership that some countries have in independent blocs," said Barrack Ndegwa, the director of the East African Community in Kenya.
For member states, signing the MoU will mean that they agree to pursue the development of common programmes and projects.
They will also be consenting to the utilisation of available resources to alleviate poverty and improve the quality of life of people region.
"We must therefore capture this opportunity by realizing that while our individual trading blocs have heralded some degree of success, there is much more potential if we act together," noted President Mwai Kibaki at the meeting on Wednesday.
Consultation, exchange of information and expertise among the blocs are some of the areas that are to be highlighted in the integration.
This will ensure that persons from either of the blocs can move into and work freely in any member state.
According to Mr Ndegwa, the need for harmonisation and mutual recognition of academic certificates could be critical in this approach. Currently, the EAC is working towards this.
"The integrated bloc in adopting the recognition will be in line with the common market practice allowing for free movement of services and labour," Mr Ndegwa told Nation in a telephone interview.
Movement between the member countries will be key in ensuring that a key tenet of integration is adhered to. In an effort to achieve this, the withdrawal of visas as a requirement for travel would be essential.
"As part of the coming together, there should be ease of movement within the countries. This can be done by removal of the visa and cutting out on the numerous documentation needed for travel," explained the director.
Today, travelling to any of the proposed members states requires one to acquire a visa. Trading in the three blocs may also be enhanced through a joint securities exchange.
Already, there is a process toward linking the EAC stock markets to share trading platforms. The sharing of the trading platform will include the Nairobi Stock Exchange, (NSE), Dar-e Saalam Stock Exchange, Ugandan Securities Exchange and the Rwandan Stock market.
In the event that this is achieved, investors' stand a chance of enjoying a wider range of securities to invest in, while firms would also have a bigger catchment for capital, however this may be hindered by the disparate levels of automation on the stock exchanges.
Although the proceedings of the summit are expected to add a formal touch to the integration, the process has been ongoing.
In key sectors of the economy, there have been arrangements between institutions that offer similar services in different countries.
This has been achieved in banking and insurance, mainly.
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