Nairobi — Poor infrastructure, persistent non-tariff barriers and frequent policy reversals are worrying the business community in East Africa even as the region moves towards a fully fledged Customs Union and a Common Market.

According to the East African Business Council, whereas the signing of the Common Market protocol recently marked an important new chapter in the EAC integration process, East African governments must move fast to address the plethora of challenges currently affecting the business environment.

EABC chairman Faustin Mbundu acknowledged that the EAC integration has made the region stronger through bringing about significant economic reforms, liberalised markets, and diversified trade.

The EABC comprises business associations in Kenya, Uganda, Tanzania, Rwanda and Burundi.

Mr Mbundu explained that the business environment in East Africa has greatly improved from what it was five years ago.

"Many of the stringent restrictions which hampered trade and investment in the region, such as different policy regimes, fiscal laws, permits, and high tariffs have been removed," he said.

However, he said the East African governments must address infrastructure bottlenecks such as poor road network, inefficient railway system, and expensive and unreliable electricity supply if the region is to attain the desired competitiveness, as a matter of priority.

"The current poor infrastructure continues to have a negative impact on the business environment in the region," he said in a memorandum congratulating the EAC heads of state for signing the Common Market protocol on November 20.

Also worrying, Mr Mbundu noted, was arbitrary suspension of the Common External Tariff by some member countries during pre-budget consultations.

Common External Tariffs are the commonly agreed duties commodities imported into the region are charged under the Customs Union, which is expected to be fully-fledged -- whereby all goods from any member state will be duty-free -- by January next year.

Policy changes

He said frequent and un-transparent policy changes undermine the Common External Tariff principle which is to boost domestic production and promote intra-regional trade.

"Frequent and un-transparent policy changes affect the conditions upon which investment are based and affect the competitiveness of local industries," he said, adding that EAC partner states should be committed to the spirit of the Customs Union Protocol.

He said all due process should involve transparent consultations and discussions involving all stakeholders before decisions are made.

On non-tariff barriers, he said EABC would continue being committed tracking the presence of NTBs through constant monitoring and reporting but asked EAC governments to put more effort in eliminating NTBs.

Persistent NTBs include police roadblocks, weighbridges, lack of mutual recognition of Quality Standards and other NTBs in agricultural trade.

He asked partner states to take a regional approach to eliminate or reduce NTBs through review and harmonisation of policies, regulations and other legislations.

"The ongoing work on one-stop-border post should be replicated in the major border posts in the region," he said.