REGIONAL INTERGARTION: Why EAC budgets should always prioritise integration

Sub-Saharan Africa’s economy is projected to have expanded by five percent in 2010 after slow growth of 2.5 percent in 2009. Whereas many other regions felt an insurmountable pinch during the global financial crisis, countries within the East African Community were somewhat shielded. Within the period of 2005-2009, the region’s GDP increased from US$46.5 billion to US$74.5 billion while per capita income shot up from US$402 to US$571. This can be explained by the emphasis they placed on the integration process to ensure that no country is hit singularly, but minimize the risks and share the benefits. The financial crisis period was characterised by major breakthroughs in East Africa, among which are, the enlargement of the community with the admission of Rwanda and Burundi in 2007, the consolidation of the customs union, creation of a common market and the concretization of the regional infrastructure program. On June 8, 2011 EAC States unveiled their budgets for the financial year 2011/12. And the emphasis they placed on financing regional projects cannot go unnoticed. During his budget presentation John Rwangomba, Rwanda’s Minister of Finance stressed the need for faster integration. The move could play a big role in cushioning the regional economy against the volatile economic situation, which is characterised by rising fuel and food prices. Kenya’s spending on military and intelligence information reduced from Ksh54 billion to Ksh52.8b due to regional sharing of defence information. The new Secretary General of EAC, Richard Sezibera, declared a commitment to provide dynamic leadership to the regional organisation by pushing towards the realisation of its projects. On a budget of about US$77.6 billion, EAC will focus on the implementation of EAC common market protocol and a fully fledged customs union. Important as well, it will focus on the promotion of agriculture and food security, implementation of an industrial strategy, investment promotion and development of the private sector. To achieve this, financial contribution alone is not enough, but political stability within the region and in each state is paramount as well. The recently concluded electoral season in the region indicated the commitment of each East African state to position for a fully-fledged integration. Presidential elections in Rwanda, Burundi, Uganda and Tanzania were widely reported by observers as free and fair. Although there were scenarios of post-electoral violence in Uganda, the elections themselves were reported to have followed the rule of law and good governance. This together with the Constitutional referendum in Kenya, are improved democratic exercises that protect civil and human rights, which are a cornerstone of EAC integration. With Rwanda and Uganda being named by IMF among the fastest growing economies, their progress can be attributed to increased intra-trade activities. Within a period of 5 years since its re-launch in 2005, the EAC customs union has enabled increased intra-trade in both imports and exports. With the implementation of a single customs territory and elimination of non tariff barriers, trade in the region is expected to grow even more. However with Rwanda the only country to have a somewhat stable currency with low inflation, the region is still susceptible to inflationary challenges that arise from challenges like drought and unstable fuel prices. This, however, can be minimized by the single market, as well as venturing into cooperation with other regions. This was demonstrated by the recently adopted tripartite treaty between EACM COMESA and SADC to establish a vibrant free trade area within the three regions. Each state within the region must allocate funds to finance regional infrastructure, estimated to be over US$25 billion for a period of ten years, in terms of roads, railways and airports. The extension of the Tanzania Central Railway from Isaka to Kigali and Bujumbura is one of the projects at the forefront. On top of that, more pressure must be put on the European Union to end the stalemate and conclude the deal on the Economic Partnership Agreements (EPAs). As stipulated by the Cotonou Agreement, the EPAs will make East Africa, which is a contracting party to the agreement, less vulnerable to unfair economic practices by the West. Although industrialization remains a major challenge, the energy sector in the region received a major boost with discoveries of oil deposits in Uganda, This should complement ongoing explorations of oil in Kenya and exploitation of Methane Gas in Rwanda and natural gas in Tanzania. The actualization of these projects is based on commendable monitoring and implementation, with minimal bureaucracy and the fight against bribe and corruption. Ends