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Will EAC’s common market deal work?

November 20, 2009

For telecoms-tycoon-turned-philanthropist Mo Ibrahim, it’s one step forward, two steps back. For Benno Ndullu, governor of the central Bank of Tanzania, the whole thing is bound to stall unless problems are ironed out first.

For many Tanzanians, it’s a threat to their jobs, language and prospects.

But for the leaders of the five-member East African Community (EAC), signing the common market protocol on Friday represents the future fortunes of Burundi, Kenya, Rwanda, Tanzania and Uganda combined.

Signing the document — the culmination of a relatively speedy 18 months of negotiation — will mean goods, services and the community’s 126 million people can move freely across their borders, in theory at least.

Together, the five countries muster $60 billion in gross domestic product combined, and believe they can prosper better as one unit than apart.

Already they have a customs union, but by 2012 they foresee sharing a single currency and finally political federation.

“If you don’t get the economic integration process going in Africa you’re dead,” Tim Clarke, head of delegation at the European Commission in Tanzania, told the Mo Ibrahim Foundation meeting on good governance last weekend.

There are plenty of creases to be ironed out, however — whether Rwandans should switch the side of the road they drive on to match up with the region or whether home-made goods are prepared to fight it out against cheaper imports unencumbered by import duties.

Sometimes described as a bowl of spaghetti, many countries belong to overlapping regional economic communities, which makes negotiating as a single bloc tricky.

Other contentious issues include land ownership, common external tariffs, travel documents and protection of ill-prepared local manufacturers and workers.

For EAC Secretary General, Ambassador Juma Mwapachu, who is also a Tanzanian citizen, it is important to overcome what he calls “this zero-sum mindset that these people are coming to take our jobs”.

“The common market is going to send another right signal to the region in terms of enticing investors,” he told the Mo Ibrahim Foundation at the weekend.

Some think the countries are nevertheless overambitious in their timescale, while also being slowed down by lengthy protocol: among their planning duties, heads of state mulled “a report on the finalisation of the development of the EAC Anthem”.

But as they promote cultural cohesion with EAC football, a new EAC headquarters and yes, the new anthem, many are hoping to put the previous failure of the EAC — which ran for ten years until it was dissolved amid rancour in 1977 — far behind them.

Will it work this time?

Comments

It must work or otherwise we are doomed!i think each country has a niche market ,Tanzania with their immensely huge energy potential could for example be concentrating on developing this for the internal regional market and in that way balance their trade with kenya.The notion that some countries should be given time to catch up is just a fallacy,eastern germany(former DDR )despite massive investments from the former west germany have never caught up.Germans before bismark were just minor kingdoms before their unification,look where the country is now.this period in german history is where we are now ,50 years on we will be in economic theory books.

Posted by pierre | Report as abusive
 

I’m inclined to believe that it will not work out so well for the locals.

Posted by jason | Report as abusive
 

I think it will depend on what the current member-states focus on: deepening the current policy areas being integrated or expanding membership and adding other policy areas to the integration agenda. The former option would augment the cooperation spirit that is necessary to sustain the integration endeavor. By ensuring that the customs union and for that matter the common market are actually operational, that infrastructure linking the five member-states is improved to enhance trade and investment, that common social, trade, and fiscal policies are followed by the member-states, then the new community will be better place to actually yield fruits for the citizens of the five member-states. The talk of expansion is doomed to lead to a stagnation and probably the eventual demise of the community. Adding more issues, especially contentious ones like speedy political unification, are doomed to also undermine the integration efforts. Increasing memberships prior to consolidating an “integration sphere” would mean that arriving at a consensus on integration issues becomes difficult. There is a high correlation between the number of members and the level of consensus. The WTO trade rounds are a classic example of this collective action problem. Contentious issues are doomed to anger publics in laggard and skeptical member-states, and should at least not be introduced to the public debate until the community actually begins to act as a united front; not only the leaders but the people having an affinity to the East African cause.

Posted by Mwita Chacha | Report as abusive
 

The EAC has a lot of potential and as much as there are many things to be ironed out, kenya uganda tanzania burundi and rwanda, all have there niche contributary factor to the union. the biggest hurdle in my opinion is the federation and i think it should be given more thought and should not be rushed, its failure could be lend an unreversable blow to the union. I also thinks its good that south sudan and the DRC hurry up and get instituted to the community before the federation takes place. My hope is that this all happens in our lifetime to see the proceeds of these events. thanks for the article – lets be hopeful and faithful.

Posted by mmaena | Report as abusive
 

Well wether it will work or not it is only appropriate that we give this a benefit of doubt with lee pessimism, ofcourse there have been so many compromises along the negotiation-table which member states must deal with for example on the question of land ownership. For countries like uganda which has recently witnessed bloody land wrangles and legislators currently sharply divided over the controversial land deal it portends a lot more than the protocol being signed. Ideally individual member states should first sort out their own internal issues before things before the broader integration. There seem to be alot of protectionism a sad development that could derail the implementation process.

 

This common market must work after all, at sometime it will be beyond one single country to stop it. As long as a minimum of three counties go along, it will move without a hitch. Once we have tasted the freedoms and alliances it will become people led. Moreover history is on the side of integration.There are also no national advantages here. Let us educate our people and just compete as a people. Nations can only bring along their ethos and experiences to enrich others.

 

This is exactly the type of thing necessary for long term growth, leading to transparency, then true democracy. This alliance would have lost any chance of success if GlobalWarming Zealots ever succeed.

Posted by PADRAEG | Report as abusive
 

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