The East African Community: Another diplomatic headache for Kenya?
The East African Community has been on top in Africa as a fast rising trading bloc in the past one and half decade, after its resurrection in 1999 by its original members, Kenya, Uganda and Tanzania. This was after years of political rhetoric emphasizing regional cultural ties and integration as a means to economic development.
This move was absolutely pragmatic and implausibly timely to this end, evident from the tremendous progress the bloc has made in terms of economic integration and diplomatic partnerships. In 2014, EAC was termed as having made the most progress on integration and as the most ambitious amongst all the Regional Economic Communities (RECs) in Africa, according to the African Development Bank.
One of the most fascinating goals that the bloc came up with less than two years ago is having a monetary union with a common currency, the East African Shilling in the next one decade. Ambitious as this could be, it is an indication of how cohesive, harmonized and prosperous the community is determined to be.
However, the latest developments in the bloc whose members, according to the United Nations Economic Commission for Africa (UNECA) traded more with Africa, compared with countries belonging to other trading blocs between 2000 and 2012, have raised eyebrows on the essence of having the bloc anyway.
Kenya, which is the strongest economy among all the members of the EAC, has stood in the receiving end in the open derision of the bloc on deals running raw. The bloc seems to be losing grip on the very fundamental areas that led to its establishment by the forefathers decades ago; of enhancing trade and development in the region through common trade pacts that will see it grow economically in years to come. Self-interests seem to have taken precedence on some member states.
The refusal by Tanzania to sign the Economic Partnership Agreement (EPA) between the EU and the East African Community which was initiated in October 2014 and authorized by the European Council on 20th June 2016 stands to be the biggest blow. Kenya is imminent to receive should the deal flop.
The economic partnership agreements which are intended to enhance regional integration and economic development in the African, Caribbean and Pacific (ACP) countries are based on the principle of asymmetrical market opening, meaning that they are into giving the ACP partners a better access to the EU market. Indubitably, they offer unprecedented market opportunities for agricultural and fisheries products.
This is not going to be the first time that Tanzania is throwing the region into a diplomatic dilemma over the EPA. A similar action by the country in 2014 saw Kenyan exports to the EU attract duty up to 22 per cent for three months under the Generalized System of Preferences (GSP).
The fact that the members of the EAC are at different levels of development has stood out to be the stumbling block in the enhancement of the objectives of the bloc. Tanzania for example, together with Uganda, Rwanda and Burundi, are listed among the Least Developed countries in the world. Kenya is a developing country.
The listing of the countries as least developed countries in the world enables them to access the EU market duty free under Everything but Arms (EBA) initiative. There seems to be a deliberate motive by Tanzania to be oblivious of the economic impact the failure to sign the agreement will have on Kenya. Regardless of whether Tanzania signs the agreement or not it is going to enjoy the benefits of its being a least developed nation to access the EU market.
The Brexit vote is chief among the reasons that have been given by Tanzanians in their decision of not signing the economic partnership agreement. As noted from the former president of Tanzania, Benjamin Mkapa, the Brexit leaves the country with a lot of uncertainty since they feel if Britain is going to be outside the deal, they stand to lose immensely.
“I don’t understand how such a powerful trade bloc can have a free trade agreement with the developing economies of Africa. There is no way that our small economies can have free trade agreement with Europe”, this was the emphasized by Mkapa in July concerning the signing of the EPA. The sentiments that were pretty supported by the intellectuals from Tanzania are yet to find the basis of the arguments which demean the capability of EAC to trade as bloc with EU.
It is intriguing to note the market competitiveness the Kenya stands to lose in the EU should the deal not go through. In the global exports from Kenya, the EU accounts for 31%, whereas, amongst the total exports to EU from EAC which amounted to $2.9 billion in 2015, half of them were from Kenya (50.87%). Kenya’s imports from the region were 54.56%. Tanzania which exported 26.01% of the total exports from EAC to EU last year stands to lose nothing should it fail to sign the EPA before the deadline which is on 1st October 2016.
The fact that we are not moving together as a bloc literally stands to kill the spirit with which the EAC is founded on. The jeopardy insinuated by Tanzania’s decision to put aside the EPA is just one among a series of other actions taken by the current government to kill the foundation of the EAC. The argument that the deal is not good for local industry in Tanzania is hollow especially now that they focus to progress industrially, since the entire region is going to enjoy better export terms.
In addition to this diplomatic hurdle that Kenya has had to face with the recent visits to Tanzania by the Deputy President and the Foreign Affairs Minister Amina Mohammed to negotiate for the signing of the deal, Kenya has had enough share of loses in trade and other agreements in the region to reconsider its terms in being part of the bloc if at all it has to stand to be a partaker of the benefits that comes with being a member. Early 2015, tourists operators from both Tanzania and Kenya found themselves in wars of supremacy when Kenya denied Tanzania tour operators to access Kenyan towns, after a similar scenario had happened before on the Tanzanian borders where, while Tanzania had enjoyed unfettered access to Kenyan towns, Tanzania had refused Kenyans past their borders. Also, Tanzania failed to agree to join the single East African visa that allows tourists to the region to visit all sites of their choice without unnecessary paperwork in each country.
Perhaps one of the biggest betrayal that Kenya has faced in the region is the oil pipeline deal where Uganda overlooked the more viable route through Kenya for Tanzania. It is imperative that Kenya reconsiders and ponders objectively on the future it has as a member of the EAC, whether stooping to the requirements of now budding economies of the region will bear fruits in the long term.
The effects from leaving the bloc are imminent such as struggle by the Kenyan businesses with branches in the region among other repercussions. Nonetheless, should we remain in a bloc where our very interests that define the economic future are jeopardized? If Kenya has to remain to be part of the EAC, much needs to be done to harmonize the customs procedures and surmount the barriers that emanate from varying levels of economic development of member states, political barriers that to harmonizing trade policies and the numerous overlapping preferential trade agreements.
The writer is a Monitoring & Evaluation Specialist. Email: [email protected]