EAC to set up kitty to address inequalities
Written by Bosire Nyairo, Business Daily, 10 July 2007
The East African Community will form a Development Fund to address economic inequalities among the member states, Kenya’s minister for EAC Affairs said.
The five-member EAC, established in 1999, seeks to achieve a Common Market by 2010, which would facilitate the free movement of labour, capital and services among the member states.
Already, the EAC has in place a Customs Union, which imposes a Common External Tariff for goods imported from outside the region.
The minister, John Koech, said member states and donors would service the fund which would target underdeveloped areas in the respective countries.
“We must address unique problems to remove inequalities among the member states,” Koech told Business Daily. “We are moving with the private sector, which should be the driving force.”
He said that would forestall the possibility of mutual suspicion, which led to the collapse of East Africa’s first attempt at political and economic integration.
The first attempt at a union by the three East African states of Kenya, Uganda and Tanzania hit a dead end in 1977, when the original East African Community collapsed over mutual mistrust among members.
Kenya, which is East Africa’s largest economy, was particularly viewed as benefiting more from the union than its neighbours.
Rwanda and Burundi, which are French-speaking, were formally admitted to the EAC last month.
“The people of East Africa have to own the process of integration… It should be a pact between the peoples, not the leaders. East Africa has a vibrant private sector, which is very keen on trade,” said the minister.
Non-tariff barriers like rules of origin, corruption at the border posts, red-tape and insecurity are seen as the main stumbling blocks to the realisation of free trade in Eastern Africa.
But the minister said the member states had appointed a committee to address non-tariff barriers to trade.
“Implementation of the Customs Union Protocol has been very successful,” the minister said, referring to the Common External Tariff for imports from non-member states.
The EAC common external tariff is the same as that for the Common Market for Eastern and Southern Africa (COMESA).
A Common External Tariff of 75 percent for non-EAC imports occasioned a near trade spat between Pakistan and Kenya early this year over the latter’s restrictions on import of certain varieties of Pakistani rice, which were said to be of low quality.
That occasioned fears the action would attract a retaliatory measure from Pakistan, which buys about 60 per cent of Kenyan tea.
Pakistani rice exports to Eastern Africa enjoy preferential treatment, with import duty at 35 per cent, which the EAC council of ministers extended until 2009.
The five-member EAC, established in 1999, seeks to achieve a Common Market by 2010, which would facilitate the free movement of labour, capital and services among the member states.
Already, the EAC has in place a Customs Union, which imposes a Common External Tariff for goods imported from outside the region.
The minister, John Koech, said member states and donors would service the fund which would target underdeveloped areas in the respective countries.
“We must address unique problems to remove inequalities among the member states,” Koech told Business Daily. “We are moving with the private sector, which should be the driving force.”
He said that would forestall the possibility of mutual suspicion, which led to the collapse of East Africa’s first attempt at political and economic integration.
The first attempt at a union by the three East African states of Kenya, Uganda and Tanzania hit a dead end in 1977, when the original East African Community collapsed over mutual mistrust among members.
Kenya, which is East Africa’s largest economy, was particularly viewed as benefiting more from the union than its neighbours.
Rwanda and Burundi, which are French-speaking, were formally admitted to the EAC last month.
“The people of East Africa have to own the process of integration… It should be a pact between the peoples, not the leaders. East Africa has a vibrant private sector, which is very keen on trade,” said the minister.
Non-tariff barriers like rules of origin, corruption at the border posts, red-tape and insecurity are seen as the main stumbling blocks to the realisation of free trade in Eastern Africa.
But the minister said the member states had appointed a committee to address non-tariff barriers to trade.
“Implementation of the Customs Union Protocol has been very successful,” the minister said, referring to the Common External Tariff for imports from non-member states.
The EAC common external tariff is the same as that for the Common Market for Eastern and Southern Africa (COMESA).
A Common External Tariff of 75 percent for non-EAC imports occasioned a near trade spat between Pakistan and Kenya early this year over the latter’s restrictions on import of certain varieties of Pakistani rice, which were said to be of low quality.
That occasioned fears the action would attract a retaliatory measure from Pakistan, which buys about 60 per cent of Kenyan tea.
Pakistani rice exports to Eastern Africa enjoy preferential treatment, with import duty at 35 per cent, which the EAC council of ministers extended until 2009.