EAC integration: more can be done

There are no prizes for guessing that the end goal for the five member states of the East Africa Community is to achieve prosperity for the people of East Africa.

Wednesday, June 10, 2015

There are no prizes for guessing that the end goal for the five member states of the East Africa Community is to achieve prosperity for the people of East Africa. In fact, the bloc’s Secretariat reaffirms this assumption in its mission and vision statement which articulates that the vision of EAC is a prosperous, competitive, secure, stable and politically united East Africa, whose mission is to widen and deepen economic, political, social and culture integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investments. 

In addition, scholars like Geda and Kibret believe that regional integration draws its rationale from the standard trade theory, which states that free trade is superior to all other trade policies. Even more, one can argue that to achieve prosperity, competition, security, stability, and political union, all member states (Burundi, Kenya, Rwanda, Tanzania and Uganda), whose total population is currently just over 143 million people, must pull in the same direction in equal measures to avoid stagnation, which has been a common occurrence in the efforts of many such past alliances including the Customs Union between Kenya and Uganda in 1917, which Tanzania (formerly Tanganyika) later joined in 1927; the East African High Commission (1948-1961); the East African Common Services Organisation (1961-1967); the East African Community (1967-1977) and the East African Co-operation (1993-2000).

Of course, there have been several achievements in many areas of integration in East Africa, particularly with Customs Union, Common Market, joint infrastructure development projects, harmonization of standards for goods produced by member states, a significant reduction of national trade barriers, creation of special immigration counters for East Africans at ports of entry, standardization of university fees for citizens of East Africans, harmonization of procedures for granting work permits, and the establishment of joint military exercises under the EAC Partner States Defence Forces initiative. Despite all the mentioned achievements of the EAC, the results in terms of full-throttle-progress and total integration for that matter as is the case in other arguably fairly successful integration models like Europe (save for their current ongoing crises) and the Association of SouthEast Asian Nations (ASEAN), is still minimal.

What then should the EAC do to achieve the level of integration desired? Our success will no doubt be determined by the way we set up ourselves to take advantage of the growing economic opportunities in the world. In recent years, the East African region has seen unprecedented growth, a fact that was echoed in 2011 by figures from the International Monetary Fund (IMF) which indicated that between 2011 and 2015, Tanzania will become the fifth fastest growing economy globally. The same dataset indicates that between 2001 and 2010, Rwanda was the tenth fastest growing economy in the world. Also, according to 2014 figures from the EAC Secretariat, the five member nations enjoy a combined GDP of $110.3 billion. This is by no means a small matter when you consider that in 2009 that figure stood at just over $74 billion.

Nevertheless, the EAC could do more to benefit from the ongoing economic expansion in the region. For instance, Ethiopia, South Sudan, the DR Congo, and Somalia are some of the countries looking to partner with the EAC – an indication that regional cooperation and integration are now imperative for almost any country. In fact, besides the classical benefits of trade creation and diversion, regional integration provides a platform for more effective integration into the world economy where multinational corporations move their businesses to locations where it is cheap to produce. This integration is crucial given the fast pace of globalisation today, where globalisation provides great opportunities such as greater free trade, greater movement of labour, increased capital flows, increased communication, and the transfer of technology from advanced nations to developing nations.

Generally speaking, one can argue that, if carried out correctly, the full integration of the EAC can complement the process of global integration, both by taking advantage of the opportunities presented and by protecting against the risks. This is especially important for small open economies such as ours in Rwanda where agriculture is still the main bread earner. Many experts have argued that with greater regional integration, economies of scale in the production of goods that are not attainable for individual member states due to their small size, geographical location or financial muscles may be feasible for the region as a whole. Through more regional agreements and action oriented strategies, multiple challenging policy changes often can be realized.

Likewise, it would be naive to talk about regional integration without considering the impact of political instability in one or more member states to the rest of the bloc. The recent developments in Burundi have in many ways led some to question the feasibility of integrating countries that have questionable state apparatuses. However, it should also be noted that regional integration has the potential to strengthen the ability of countries to deal with negative shocks, both external and country-specific. This ability is particularly relevant in our region, where historically, we have known more conflicts than we have peace. It is therefore important that we carry on with full integration because integration rhetoric alone is only good on paper.

More actions are what will change the lives of many East Africans.

junior.mutabazi@yahoo.co.uk