As the East African Community prepares for a fully-fledged Customs Union in January 2010, the private sector in East Africa under the umbrella organisation East African Business Council has outlined its priorities.

"For the private sector, the critical issue is the challenges facing its smooth implementation," EABC vicechairman Keli Kiilu said in a statement issued here yesterday.

He said there were still forces which were hindering the fulfillment of the ultimate goal of deepening integration through increased trade among the EAC countries and increased competitiveness of private sector, both regionally and internationally.

The five-year transitional period (2005 - 2009) of the East African Community Customs Union has seen much progress made "though there are some challenges encountered when implementing some instruments" Mr Kiilu added that if not addressed properly, the existing bottlenecks could hamper the achievements of the achievements so far made by the Customs Union as well as its objectives.

The EAC Customs Union started on 1st January 2005 involving the three traditional EAC partner states Tanzania, Uganda and Kenya. Burundi and Rwanda joined EAC in 2007 but started implementing the Customs union in July 2009.

The EAC Customs Union initially set a 5-year transition starting in January 2005 and ending in December 2009 before it becomes a fully Fledged Customs Union in January 2010 with free movement of goods within the region. Mr Kiilu said the application of the EAC Common External Tariff (CET) for goods imported into the region from outside had been satisfactory despite "some challenges".

He added that with the regional bloc bracing for a fully-fledged Customs Union come next January, the review of the CET including pre-budget consultations of the Ministers of Finance should be more consultative, transparent and actively involve the private sector.

On elimination of internal tariffs, the private sector view is that the internal tariff elimination should be carried out as scheduled, he explained.

However, he stressed that as private sector tries to address issues of competitiveness at firm level, the EAC partner states should be committed to addressing issues of competitiveness which are beyond firm levels such as energy, infrastructure, telecommunications transport and cost of and access to finance.

The EABC official, who is a prominent businessman in Kenya, noted that the administration of the EAC Rules of Origin has so far been executed fairly well in the region.

The existence of simplified certificate of rules of origin for low value transaction is highly commendable by private sector as it has facilitated intra- regional trade.

"It is view of the private sector that EAC Partner States should work on how best to remove the usage of rules of origin in the fully fledged customs union taking into consideration the issue of multiple memberships in SADC and Comesa and porous borders," Mr Kiilu said