STRENGTHENING THE ROLE OF CIVIL SOCIETY IN DEEPENING EAC

INTEGRATION

INTRODUCTION• The East African Community Integrationo EAC Integration processo Where we are?o Where we are going?• Business Opportunitieso Trade o Revenue performanceo Investmento Reducing transport costso opportunities

“EAC BORN AGAIN”

• Due to the challenges of globalization, the Partner states establish the new born East Africa Community through a treaty that came into effect in 2000.

• The community aims at developing policies and programes for widening and deepening cooperation among the partner states

THE EAC TREATY

• The “organic law” governing operations of the EAC.

• The “Compass” guiding the EAC integration process

• The “Tool kit” providing for the resolution to conflict and dispute.

• The “Insurance” that guarantees a secure future for all East Africans!

THE EAC JOURNEY

WHERE ARE WE TODAY?

• THE EAC CUSTOMS UNIONo Established in 2004, implemented in 2005,

and became fully fledged on 1st January 2010o Major components of the EAC customs union:Common External Tariff (CET)Rules of Origin (ROO)Non-tariff Barriers (NTBS)o Goods produced in EAC are duty free

WHERE ARE W?E TODAY• THE EAC COMMON MARKETo EAC Common market Protocol signed in November

2009o Protocol ratified by all five partner states and came

into effect on 1st July 2010o The protocol provides for:i. The free movement of goodsii. The free movement of personsiii.The free movement of laboriv.The free movement of servicesv. The free movement of capitalvi.The right of establishmentvii.The right of residenceS

WHERE WE ARE GOING?• EAC MONETARY UNION• Current Statuso Study on criteria for establishment of EA

Monetary Union completedo Draft protocol establishing the EA Monetary

union is being discussedo Region to build on the progress under the

customs Union and Common Market.o Focus on meeting the macroeconomic

convergence criteria

WHERE WE A RE GOING?

• POLITICAL FEDERATIONo Political federation is the ultimate objective of

the EAC integration processo Following summit directive a decision was made

to appoint a 15 Member Experts who are currently studying the various reports view of recommending the way forward.

o The 15 member committee of experts started their work on 17th February, 2010 and will submit their report in August 2010.

BUSINESS OPPORTUNITIES• In Tradeo Intra-EAC trade and post Customs Union• In investmento FDI Flows• Infrastructure; (Roads, Railway, ICT and energy)o Transport corridorso Fiber optic cableo Reliable and sustainable energy supplies• Opportunitieso The KCB’s and Nakumatt’s of the region• Challengeso Implementation issues

TRADE• Kenya’s trade balance with EAC partner states has

maintained an upward trend since 2004• Total exports from Kenya to EAC partner states has

been increasing relatively consistently.• Imports fro Tanzania are the most prevelent, making

up 58% of the 2008 total, although goods from uganda have been growing significantly, increasing by over 400% between 2006 and 2008.

• Although, imports have been increasing significantly, Kenya’s Balance of Trade within the EAC has remained strong and positive, due to the very competitive nature of its exports

REVENUE PERFORMANCE

• Increases in Revenue due to:o Improved economic performance o Improved tax administrationo Growth in the volume of tradeo Greater reliance on other taxes: Income tax,

Excise Tax, Value added tax, other than Trade Tax

PARTNER STATES REVENUE PERFORMANCE, $US Millions

2004/05 2005/06 2006/7 2007/08 2008/07

Burundi 232 259 280 336 335

Kenya 4,022 4,570 5,776 7,199 7,234

Rwanda 472 618 683 864 1,182

Tanzania 2,333 2,574 2,934 2,137 5,460

Uganda 1,924 1,822 2,329 2,398 2,594

INVESTMENT FLOWS• Foreign direct investment (FDI) continues to be

one of the cornerstones of economic development in the EAC

• Inflows of FDI have almost tripled from US$692 million in 2002 to $US 1,763 million in 2007.

• Uganda and Tanzania receiving a larger proportion between 2002 and 2006.

• Kenya’s share has been low until 2007 when FDI flows rose from $US 51 Million in 2006 TO $US 728 Million in 2007. This is due to privatisation of telecoms and investment in railways

REDUCING TRANSPORT COSTS

• Infrastructure o ROAD NETWORKo EAC has prioritized five corridorso Three of these corridors pass through Kenyai. Corridor 1: Mombasa-Malaba-Kampala-Kigaliii. Corridor 5: Tunduma-Arusha-Namanga-Nairobi-

Isiolo-Moyaleiii.Corridor 3: Mwanza-Isebania-Kisumu-Lodwar-

Lokichogio.

INFRASTRUCTURE

• The main objective of the road network project is to improve trade environment through enhanced efficiency along the five corridors.

• Has the following components:o Development of one-stop border posts at

Malaba, Busia, Isebania, Namamanga,Taveta, Lung Lunga.

o Seamless transport through which cargo would cross the borders without unnecessary delays.

INFRASTRUCURE

• ICT DEVELOPMENTo Fiber optic cable has been laido High speed internet connection.o Global connectivity.o Outsourcing opportunities.o Increased connectivity within the region

INFRASTRUCTURE• ENERGY DEVELOPMENT.o The main objective is to address the growing

energy needs in the community in which capacity is 2,559 MW against demand of 2,700 MW

o Development of a gas pipeline from Dar es Salaam to Mombasa will facilitate cheaper access to the gas resources recently discovered in Tanzania.

o Development of a gas pipeline from Eldoret to Kampala will facilitate cheaper transportation of petroleum.

EVIDENCE FOR BUSINESS OPPORTUNITIES

• Market size of over 126 million customers• The common market implies you can expand

your business in the region• Business already reaping the rewards e.g. KCB,

Uchumi, Nakumatt, Bidco,Equtiy Bank, and small bsuinesses.

• Developments of infrastructure, ICT, and energy have the potential to reduce costs.

• Statistics do not lie! Within the region is on the up!

ROLE OF CIVIL SOCIETY (1)

• The treaty for the establishment of the East African Community, Article 127 stipulates that partner states agree to “create an enabling environment for the private sector and civil society”

• The 16th Council directed the secretariat to formulate an EAC Civil Society Mobilization Strategy.

ROLE OF CIVIL SOCIETY (2)

• EAC is a partnership between the partner states, the market and the civil society;

• CSO can work with EAC in range of functions, namely:a. Advocacyb. Watchdogc. Networkingd. Researche. Technical areasf. Coordination and representative functions; and g. Citizens associations

ROLE OF CIVIL SOCIETY (3)

• The civil society could engage with the EAC through the East African Community Civil society organizations Forum (EACSOF) which was established in 2007 and has been holding meetings to discuss engagements with EAC.

THE END