27 April 2014

East Africa: Arusha Summit to Chart Next Steps

Arusha will this week host the five Heads of State of the East African Community, namely Burundi, Kenya, Rwanda, Uganda and Tanzania. In the chair will be President Uhuru Kenyatta of Kenya.

According to officials at the EAC Secretariat, the agenda includes alternative financing mechanisms for the EAC; progress of negotiations on the admission of the Republic of South Sudan into the Community; as well as a progress report on the EAC Institutional Review.

No doubt the other pressing issue is the threat of terrorism to the economic interests of the Community. Recent attacks in Nairobi have hurt Kenya's tourism industry. However the whole region has to take a unified stand on how to handle this threat to EAC prosperity. Especially given the fact that it involves added costs to businesses and deters foreign investment.

The EAC is also expected to finalise talks with the European Union over the Economic Partnerships Agreements (EPA). It would not be surprising if the Presidents do not touch on this issue since it will impact on the Community's trade relations with the EU for the foreseeable future.

Ultimately the EU wants elimination of tariffs to zero for access to the EAC market over a transition period of 25 years. This means the EAC will have to routinely modify the Common External Tariff to accommodate the EPA provisions and this could also mean less taxes from imports.

Recently, the Kenya Minister for Commerce and EAC Affairs Secretary Phillis Kandie said the key challenges the Community faces involve inadequate coordination mechanisms arising from fragmented institutional implementation framework and conflicting commitments under duplicated mandates in the different regional economic communities.

The solution here is learning to give away part of the national sovreignity if the EAC is to function with any level of effectiveness.

However public policy toward economic integration is also, to an important extent, responsive to the tastes that people have regarding various aspects of such integration, as well as to the technologies that make integration possible, specifically the Internet.

In addition, globalization requires that national citizens address the question of what sort of balance they wish to strike between their interest in enjoying the benefits of economic integration and their concern that international economic integration requires that they learn to live with new risks.

In economic integration no country pays customs duty within the integrated area, so it results in lower prices both for the distributors and the consumers. The ultimate aim is to increase trade across the region. Another very important point is that integration is a vital strategy for addressing the effects of political instability and human conflicts that might affect a region. East Africans are quickly coming to a point of no return. We either move ahead together or fall apart in disarray. Lets move ahead.

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