The East African Community (EAC) is yet to fully implement the common market protocols which were meant to boost the region’s trade, a new report has shown.
The second East African Community Common Market Scorecard 2016 (CMS 2016) launched in Kampala, Uganda on Thursday shows that Kenya, Uganda, Tanzania, Rwanda and Burundi still run their trades as separate and distinct markets, keeping their economies small and disconnected due to several bottlenecks in the regulations.
This was blamed on failure by individual states to lift legal barriers like recognition of business certificates from each other and double taxation.
This is despite EAC presidents having signed the treaty to give the countries freedom of movement of goods, labour, services, and capital, which would significantly boost trade and investment and make the region more productive and prosperous.
The protocol was signed on November 20, 2009 and came into force on July 1, 2010.
“While there is positive progress, states have remained largely non-compliant in their services and trade liberalisation commitments,” said Ms Jesca Eriyo, the EAC deputy secretary-general in charge of finance and administration during the launch of the report.
She said the first scorecard launched in 2014 had raised similar concerns stating that regional trade in goods was being constrained by not less than 51 non-tariff barriers.
Efforts to freely offer cross-border services such as professional services, distribution, transport and communication were slowed down by at least 63 non-conforming measures while only two of the 20 operations that facilitate deeper financial integration are free of restrictions in all the countries.
“A number of reforms have been undertaken since the 2014 report. These have brought the total number of non-conforming measures down from 63 to 59 in 2016,” said Ms Eriyo.
The second scorecard was developed in 18 months by the EAC secretariat with the support of the World Bank Group and Trade Mark East Africa.
Ms Eriyo disclosed that the five states earned full marks for commitment and that subsequent scorecards should consider assessing their implementation.
Kenya is second at 90 per cent in the implementation of recognition of certificates of origin, an issue repeatedly identified as a significant non-tariff barrier in 2014.
Burundi continues to earn full points on this.
Tanzania’s recognition of certificates of origin has improved from 50 to 60 per cent while Rwanda’s and Uganda’s scores have both declined, indicating a worsening performance in terms of recognising certificates of origin of other partners.
Most countries improved their score on applying tariff-equivalent charges, though such charges persist as barriers to intra-regional trade, stated the official.
Ms Eriyo blamed lack of information for the slow compliance to the treaty in the EAC countries saying some people in the private sector were unfamiliar with the commitments affecting their operations.
“I urge partner states to strongly engage the private sector on the implications of these reforms on their day-to-day operations across the region and set up a team who could help push for implementation,” said Ms Eriyo.