Will The Dominance Of The East African Community (EAC) By One Partner State Lead To Its Collapse Again?
The existence of the EAC dates way back in 1917 under the colonial masters with Kenya and Uganda, later to be joined by Tanganyika in 1927. It was formally established in 1967 by three independent East African countries (Kenya, Uganda and Tanzania) and existed from 1967 to 1977 when it collapsed despite being regarded as the most prosperous regional integration of the time. During this period regional bodies like the East African Development Bank, University of East Africa, East African Railways, East African Airways were established.
During the dissolution of the Community, partner states negotiated a Mediation Agreement for the Pision of Assets and Liabilities, which they signed in 1984. The treaty also guided the future cooperation of the states that led to re-establishment of EAC effective 2000.
Since then, the current Community’s membership has expanded even beyond the regional boundaries. It has 6 member states (Rwanda, Burundi and now South Sudan on addition to the original three). I think this expansion is guided by political and economic interests.
The current community is structured onto 4 pillars, that is customs union, common market, monetary union and political federation. On paper various protocols have been adopted to formalize the first three, with the latter being work still in progress- but I highly doubt its realization. These efforts are expected to breed basically 4 freedoms; free movement of labour, goods, services and capital to enhance trade, investment and development.
It is on this background that partner states expect to carry out business with fellow member states without trade barriers. However, this has not been the case, Kenya which is regarded as the giant economy in the community and earned a lot from exports with in the community has stifled efforts by its fellow members to export to its economy which is a threat to the integration.
Although blame is put on Amin’s invasion of Tanzania for the collapse of the community in 1977, this was just a spur to the looming disintegration due to dominance of the community’s economy by one partner state – Kenya, a situation that persists up today.
While reacting on the presentation by David Ebiru, Deputy Executive of the Uganda National Bureau of Standards before the Parliamentary Committee on Trade, Tourism and Industry, Timuzigu Kamugisha Micheal, Kajara County Member of Parliament alleged the increased stifling of Uganda made products by the Kenya Authority responsible for Standards on account of being below standard yet they are later repackaged and sold as Kenyan products.
Earlier on, while appearing before the same committee, Richard Mubiru of the Uganda Manufacturers Association informed the committee of the ages Ugandan sugar spends on the Kenyan boarder waiting for clearance yet Kenyan Products are given easy entry into the Ugandan Market. He further alleged that there is a racket of politicians in Kenya whose major role is to restrict the entry of Ugandan sugar into the Kenyan market while giving free way to the Brazilian sugar. The Chairperson of the Committee and Bulamogi County Member, Keneth Lubogo indicated that it is high time the committee under takes an audit to a certain the benefit Uganda has derived from this Integration.
But as we wait for the audit, whose results can be vindicated. The truth of the matter is that Kenya has and still earns a lot from this integration. In 2014, Kenya exported worth US$ 569m to Uganda and in turn Uganda exported goods worth US$ 268m to Kenya’s economy. For a long time, Kampala’s concentration has been on pacifying the ground in the region as Nairobi moves in with her trade and commerce. it is not only its finished products but also Financial institutions like Kenya Commercial Bank, Equity Bank, Insurance Companies and Super Markets have crossed its boarders to now almost all member states.
Although Kampala should take blame for its economic disorganisation that it is mainly processing semi-processed products like maize and petty labour (Boda-Boda operators, restaurants operators and Saloon attendants). For equity’s sake why shouldn’t Ugandan also enter the Kenyan market unrestricted?
To attempt to answer this question, the community has either to adopt quota systems to specify the number of goods that every member country export to fellow member states or goes back to tariff barriers. This will enable small economies to benefit from taxing goods from big economies like Kennya instead of providing markets to Kenyan produce and at the same time losing out the tax yet Kenya can’t allow them to export into its economy.
The community should aspire to achieve equality and equity of trade among its member statements. For instance, during the early stages of the community operated a monetary union with a century board and parity currency. This meant that each State owned its currency but one Tanzania shilling was equal to one Uganda shilling.