EAC:Rhetoric and reality

For members of

Economist Corporate Network

July 2011

Economic integration: a global phenomenon

     

Economic and monetary union

Economic union

Customs and monetary union

Common market

Customs union

Multilateral free trade area

Context: a tangled web …

SACU

SADC

COMESA

ECCAS

CEMAC

EAC

IGAD

CEN-SAD

UMA

ECOWAS

MRUWAMZ

UEMOALGA

AFRICAN UNION

CEPOL

… With a shared agenda

SACU

SADC

COMESA

ECCAS

CEMACIGAD

CEN-SAD

UMA

ECOWAS

MRUWAMZ

UEMOALGA

AFRICAN UNION

CEPOLEAC

African Economic Community

Abuja Treaty

1994 1999 2007 2017 2019 2023 2028 2034

Create missing blocs

Strengthen intra-REC integration &

harmonisation

FTA & CU in each bloc

Continental FTA & CU

Continental Common Market

Continental EMU & Parliament

SACU

SADC

COMESA

ECCAS

CEMACIGAD

CEN-SAD

UMA

ECOWAS

MRUWAMZ

UEMOALGA

AFRICAN UNION

CEPOLEAC

SACUSACU

SADC

COMESA

ECCAS

CEMACIGAD

CEN-SAD

UMA

ECOWAS

MRUWAMZ

UEMOALGA

AFRICAN UNION

CEPOLEAC

EAC: pulling out the stops

Abuja Treaty

1994 1999 2005 2007 2015 2023 2028 2034

Create missing blocs

Strengthen intra-REC integration & harmonisation

FTA & CU in each bloc

Continental FTA & CU

Continental Common Market

Continental EMU & Parliament

Kenya, Uganda, Tanzania sign EAC

Treaty

EAC Customs Union established

Rwanda, Burundi join EAC

2010

EAC Common Market Protocol

2012

EAC Monetary Union?

EAC Political Union?

To be, or NTB?

Trains, ports & automobiles

Core training

Rules & regulations

Honest is as honest does

Trains: grinding to a halt

GDP per 100km2 (millions)

<1010-100100-10001000-5000

>5000

www.infrastructureafrica.org

Railroad

(millions of transport units/year)

Not operating

<0.5

0.5-1

1-2

>2

Required investment: RVRRequired investment: TRL

-27-20-8525Total

N/AN/AN/A325Reconstr. Of Tororo-Pakwach Rlwy

-3-2-110Kampala ICD development

-3-2-120Mombasa intermodal yard & equip.

-6-5-2150Infrastructure upgrade (3-5 yrs)

-15-11-420Locomotive Rehabilitation (3 yrs)

Reliability

TimePrice

Est. impact on port performance (%)Cost

($m)Name

-27-20-8525Total

N/AN/AN/A325Reconstr. Of Tororo-Pakwach Rlwy

-3-2-110Kampala ICD development

-3-2-120Mombasa intermodal yard & equip.

-6-5-2150Infrastructure upgrade (3-5 yrs)

-15-11-420Locomotive Rehabilitation (3 yrs)

Reliability

TimePrice

Est. impact on port performance (%)Cost

($m)Name

537Total

-1-1-12Dar es Salaam CFS – Site selection, Design, Project Preparation

-5-3-4350Track Infrastructure Upgrade (3-5 yrs)

-19-11-15185Integrated Revival – Infrastructure, Rolling Stock, Working Capital & Isaka ICD

Reliability

TimePrice

Est. impact on port performance (%)Cost

($m)Name

537Total

-1-1-12Dar es Salaam CFS – Site selection, Design, Project Preparation

-5-3-4350Track Infrastructure Upgrade (3-5 yrs)

-19-11-15185Integrated Revival – Infrastructure, Rolling Stock, Working Capital & Isaka ICD

Reliability

TimePrice

Est. impact on port performance (%)Cost

($m)Name

(Air and) Sea Ports

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Container dwell time (days)

East AfricaSouthern

West/CentralGlobal Best Practice

g

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Truck processing time (hours)

West/CentralSouthern

East Africa

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Global Best PracticeCrane productivity (containers/hour)

West/CentralSouthern

East Africa

170 180 190 200 210 220 230 240 250 260 270 280 290 300 310 320160East Africa

70 80 90 100 110 120 130 140 150

Global Best PracticeWest/Central

Southern

Container handling ($/TEU)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

West/CentralSouthern

East Africa

General cargo handling charge ($/ton)

Air (and Sea) Ports

16%

15%

43%

26%

50%

20%

28%

2001 2007

Western recent

Western somewhat recent

Western old

Western age unknown

Roads

North

ern

Trans

it

North

ern

Region

al

North

ern

Domes

tic

Centra

l Tra

nsit

Centra

l Reg

ional

Centra

l Dom

estic

RailRoad

0

2000

4000

6000

8000

10000

12000

000 tons

Corridor traffic by type and mode, 2009

Roads

Condition (%)Type (%)

Good Fair Poor Paved

A 50 34 13 97

B 40 36 11 94

C 44 48 9 84

D 45 36 6 57

E 37 17 16 23

A

B

C

D

E

What counts:

Eight

1,056 km

$377m

Finding the corkscrew

• 22 high priority projects

• Overseen by TradeMark East Africa

• Capacity building and systems development

Economist Corporate Network is the membership-based briefing and networking service from The Economist for senior executives seeking insight into economic and business trends across markets and regions. It has regional business groups in Central and Eastern Europe, Middle East and Africa, and Asia Pacific.

Independent, fact-based and thought-provoking, Economist Corporate Network provides knowledge and understanding of business issues in these regions. This service builds on the resources of The Economist Intelligence Unit, a sister business to The Economist.

Economist Corporate NetworkBoulevard des Tranchees 161206 Geneva, SwitzerlandTelephone: (43) (0) 5574 21 479www.corporatenetwork.com

Copyright

© 2011 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of The Economist Intelligence Unit Limited.