Adrian Raphael Njau from Tanzania was appointed the Executive Director of the East Africa Business Council (EABC) – an advocacy body of private sector associations and corporates from the seven East African Community (EAC) members – in acting capacity in July this year, taking over from Rwanda’s John Bosco Kalisa. The New Times’ Tesi Kaven caught up with him at the third joint session of the Intergovernmental Committee of Senior officials and experts in Central and Eastern Africa (ICSOE) in Cameroon. In the conversation, he highlighted priorities he plans to implement during his term at the helm of the EABC, the opportunities for the private sector as countries embrace the African Continental Free Trade Area (AfCFTA), and the cost of border closures to businesses in the region. Below are the excerpts: What have you been focusing on since you took up the reins at the EABC? One of my priorities has been enhancing public-private dialogue to help resolve tariff barriers affecting the private sector in the region. I believe that the elimination of these trade barriers will promote and increase intra-EAC trade which has been low compared to other regional economic communities on the continent. Looking at other indicators like movement of people and macroeconomic convergence, the EAC region performs well, but we need to do more as far as trade is concerned. We are pushing for partner states in the EAC to uniformly implement the Common External Tariff (CET). Currently, we are seeing member states increasingly using the Stays of Applications, which allows countries to apply for an exemption of a tariff agreed at the CET-level for any given product including those that are Sensitive Items. So we need to find out why countries are going for this option instead of applying the agreed common external tariff. ALSO READ:EABC pushes for new common external tariff rate by July We are also looking to solve challenges around the rules of origin in the EAC which are said to be more stringent compared to others like the Tripartite and the AfCFTA rules of origin. The EAC rules of origin need to be more flexible and aligned with other rules of origin so that the private sector can actually trade our own products. One final area of focus for me is the harmonisation of the taxes in the EAC region. The huge difference in value-added-taxes, income taxes and excise taxes, for example, are adversely affecting intra-EAC trade. The EABC is not looking for the same rate across the regional countries, but we are pushing for some sort of a harmonised tax regime that is transparent, predictable and non-discriminatory. What opportunities do you see for the private sector in the AfCFTA? I see a lot of opportunities in the AfCFTA especially for the private sector in the EAC because it means a bigger and more diversified market for goods and services from the region. However, the private sector lacks awareness. We have held national workshops to sensitise the private sector on how to use trade instruments like the rules of origin and how to ensure that their products qualify to enjoy preferential tariff treatment. We are also sensitising the private sector to aggregate their products and export them or look into possibilities of coming together to put up warehouse facilities in different countries for storage and distribution. ALSO READ: EA Business Council pushes for raising cap on duty-free goods The other opportunity we see is in trading services. The EAC Partner States have decided to liberalise five priority sectors under the AfCFTA including the financial sector, transport and tourism. So we are sensitising service providers to tap some of the opportunities associated with the liberalisation of these particular service sectors. The EAC region is plagued with political wrangles leading to border closures. How has this impacted the private sector in the region? We are actually doing a study on the impact of border closures on businesses as well as the revenue losses to governments in the region. Countries in the region need to explore dialogue other than border closures which adversely affect the common people. The EABC is pushing for the opening of the closed borders and having political matters dealt with through dialogue and diplomacy. Some of the EAC member states have negotiated deals with third parties. What's been the impact of this on regional trade? When we allow individual countries in the region to negotiate trade agreements with third parties, we are distorting the Common External Tariff. A good example is the Economic Partnership Agreement between the European Union and Kenya, where products coming from Europe enter Kenya at a different rate while the same products entering Uganda or Tanzania are charged a common external tariff. These practices are showing that we are not one market and in the long run free circulation of goods within the EAC will be discouraged due to lower import rates for some countries compared to others. Mistrust is also being created among the EAC partner states. We are pushing for the EAC to continue negotiating the EAC-EU economic partnership agreement (EPA) and the EAC-UK EPA as a region to avoid creating mistrust and distortion of the CET.
