Kenya defends TZ over EAC delays

August 18, 2008

, NAIROBI, August 18 – The government has defended Tanzania for seemingly dragging its feet in adopting resolutions geared towards the East African integration process.

East African Community (EAC) Permanent Secretary David Nalo told reporters Monday that Tanzania cannot entirely be blamed for taking a hard stance on various issues, as they are justified in demanding for a framework that guarantees they will not lose out in regional trade after opening up their market.

Citing the recent decision by Tanzania to lock out Kenyans from participating in the National Bank Initial Public Offer (IPO), Nalo said the EAC member states need to fast track the implementation of regional policies to avoid such scenarios.

Although many people have viewed this controversial decision as retaliatory, since Tanzanians were unable to participate in the Safaricom IPO, Nalo said the lack of a regional cross border listing framework was largely to blame.

“If you have not harmonised the policies, the temptation to recede to national legislation is very high and I think that is what is happening in the case of Tanzania,” the PS explained.

He spoke after the second meeting on negotiations for the EAC Common Market Protocol, which ought to have taken place in May.

It had to be delayed as the EAC High Level Taskforce was still awaiting comments from Tanzanian citizens on the deliberations of the first meeting in Kigali, Rwanda in April that they did not attend.

Nalo noted that the EAC treaty is cognisant of the fact that one of the reasons why the previous EAC collapsed was the unequal nature of the benefits accruing from the integration process, and had made a provision for partners to willingly participate in the integration process.

“Why is it that we have common EAC budgets read every June? It’s because there has been a lot of progress in harmonising the fiscal policy. We need to move in that direction in other areas,” he said.

While alluding to the fact that the European Union took 27 years before it secured a Common Market, the PS said that the EAC should be lauded as it had achieved considerable milestones since the launch of the Customs Union in 2005.

About 147 items with a tariff level of 25 percent had come down to 10 percent, while another set of 54 items that attracted a tariff rate of 10 percent had been collapsed to zero.

Trade, he noted, had also increased from $700 million in 2003 to $1.2 billion in 2007.

Nalo also advised that member states need to focus on increasing the volume of intra EAC trade, which is still not fully exploited.

“We need to look at the issue of accommodating one another. Tanzanians’ fears will soon fade away once they start realising that they are also benefiting from the exports into their country,” he offered.

Negotiations on the EAC Common Market Protocol, where delegates from the five member states are expected to reach consensus on the right of establishment and residence, free movement of capital, transport and services, ought to be concluded by 2010.

After this, the region will embark on fast tracking the subsequent building blocks towards a Political Federation

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