3 July 2010

Kenya: Moment is Nigh to Live the East African Dream


Nairobi — The excitement that has greeted the launch of the East African Common Market Protocol is understandable. The break-up of the original East African Community in 1977 was a lost opportunity and denied the region a chance to consolidate trade. As key regional institutions were dismantled, the region was left all the poorer and we have paid dearly for the petty jealousies that drove that break-up.

In the intervening period and before EAC leaders began retracing their footsteps to recapture that original vision, other regions, most notably the European Community, bolted out and created a strong market that has since matured into the European Union with its own currency, aligned trade policies and an expanded membership of 25. It is nostalgic to think where East Africa would be had it remained as resolute as the European Community.

The icing on the cake, though, is that from the original three states, Burundi and Rwanda have since crashed into the party aggregating the EAC market to 126 million people. It is widely expected that should the forthcoming referendum in Sudan vote in favour of two states, Southern Sudan will join the EAC in earnest. It is the only logical choice.

We must salute the singular sense of duty and purpose that EAC leaders have exerted in realising this milestone. A common market will ease trade within the region by harmonising trade policy. It creates a predictable external tariff structure, meaning trade partners do not have to second-guess export tariffs. A more certain and predictable trade environment allows businesses to plan and project better. The common market comes at a time when EAC partner states are patching a new trade regime with the European Union (EU) under the Economic Partnership Agreement (EPAs). The collective challenge that an EPA with the EU presents emphasises the need for greater regional co-operation to mitigate some of the expected losses. Kenya, for instance, is expected to lose between eight per cent and 12 per cent in government revenue, incur a 15 per cent loss in regional trade while an estimated 65 per cent of Kenya's manufacturing could be vulnerable under an EPA with the EU. Kenya's counterparts at the EAC are not expected to fare any better.

Importantly, the EAC Common Market provides an important building bloc in consolidating regional integration in Africa. With the Common Market for East and Southern Africa (COMESA) and the Southern Africa Development Community (SADC) similarly committed, Africa is moving towards accelerated economic integration. Though Africa's leaders and thinkers have acknowledged integration would lessen the continent's economic and political marginalisation, the handiwork to take this goal beyond the realm of conjecture and optimism has been largely lacking.

But as the African Union continues to look upon the various regional economic communities as essential building blocs in the quest for continental economic integration, those making tangible progress such as the EAC represent real hope of political commitment towards deepening integration and de-emphasising the sovereign interests of individual countries. Effective regional integration is expected to diminish the limitations created by national boundaries and edge Africa closer to the goal of economic integration at the pan-Africa level. East Africa has, therefore, laid one more building bloc towards the broader vision of consolidating the continental trade architecture.

The EAC must learn from the experiences of other regions that have been on this road before to avoid repeating any of their failures and instead consolidate this effort. There should be no question that a common market creates both winners and losers depending on the economic efficiencies and diversification of trade and commerce within individual countries.

That partly explains why the process towards the common market has been gradual and incremental to allow individual countries make necessary adjustments especially in the manufacturing and industrial sectors. To optimise on the benefits, EAC member states must now take a closer look at national policies to facilitate local manufacturers and traders to seize the opportunities presented by the common market.

It is time to seize the moment and now that the train has left the station, there must be no looking back. Sceptics of regional integration must realise that the whole is always greater than the parts. After a false start in the 1970s, the moment is nigh to live and relive the East African dream.

Gichinga Ndirangu is a lawyer and policy analyst.

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