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Kenya

Strong bodies for EAC, Kibaki urges

ARUSHA, Tanzania, Nov 20- The East African Community needs to establish strong institutions as it moves from one stage of the integration process to another, President Mwai Kibaki has said.

At the launch of the EAC Common Market Protocol President Kibaki said it was also imperative to hire additional skilled personnel to man those institutions in order to deliver services and outputs that are in line with the E.A.C. Treaty.

“In this regard, therefore, there is urgent need for additional funding for the Community institutions, activities, projects and programmes that continue to increase,” he said in Arusha Tanzania.

During the launch which also marked 10 years since the establishment of the EAC, the Kenya Head of State observed that both intra EAC trade and investment has increased significantly particularly since the launch of the Customs Union on January 1, 2005.

The volume of trade has increased from Sh145.6billion ($1.95 billion) in 2004 to Sh209 billion ($2.8 billion) in 2008, while total investments in the community have increased from 18 percent as a percentage of G.D.P to about 23 percent during the same period.

Though impressive, the President emphasised the need to do more to achieve trade levels similar to those recorded in the rest of the world.

“We must, therefore, continue to aggressively market our community as a single investment destination,” he added.

He however pointed out that the signing of the Protocol would help the 120 million people and GDP of Sh4 trillion region achieve this goal by enhancing its integration process while presenting a myriad of benefits such as the free movement of persons, goods, labour, services and capital to the EAC citizenry.

“East African citizens will, in addition, have the right to establish businesses as well as reside in any member state without being discriminated on the basis of their nationality. I urge all to amend legislations that consider East African citizens as different nationals so as to give effect to this spirit,” he said.

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The next stage of the integration is the creation of a Monetary Union and a study which will be useful in informing the process towards the Union has been already been undertaken.

“Besides the Monetary Union, it will be recalled that the outcome of the national consultations on the political federation revealed that majority of East African citizens were in favour of the federation of the East African countries into one political entity. There is need for us, therefore, to take the appropriate steps so as to achieve the desire of our people on political federation,” President Kibaki said in reference to the third stage of the process.

His Ugandan, Rwanda, Tanzanian and Burundian counterparts expressed satifcation at the launch of the Protocol which they noted would further boost the region’s profile and competitiveness.

“We have agreed that the preparation for the Monetary Union should start immediately. We are going to enter into serious negotiations on the establishment of the East African Monetary Union,” said Tanzanian President Jakaya Kikwete.

Ugandan Yoweri Museveni however emphasised that for the benefits to be realised, the region must uphold peace and democracy.

EAC investors lauded the decision, which they said would boost intra-regional trade that has remained inferior to exchange with external markets and regions.

"From 36 million people in the Kenyan market we are moving to 126 million. The impact is going to be great," said Vimal Shah, the chief of Kenyan company Bidco Oil Refineries.

"We cannot remain an island anymore. The key now is to become competitive," he told AFP.

The protocol is expected to come into force in July 2010 when the member states shall have ratified it.

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Dar es Salaam Stock Exchange dealer George Fumbuka said the common market "is expected to stimulate increased intra-regional trade" and "produce entrepreneurs to compete in other regions."

"It is anticipated that the ratification proces will be smooth since most of the outstanding issues have been ironed out after protracted negotiations by partner states," Kenya\’s ministry of East African Community said this week.

The bloc\’s Secretary General Juma Mwapachu told AFP in a recent interview that the leaders had no option but to enter the common market.

"There is no choice. Let us go into the common market and confront the challenges," said Mwapachu, a Tanzanian.

However, efficiency of the common market will be hobbled by poor roads and railway network across the region. The bloc only recently launched projects to link the member states with a railroad, notably landlocked Burundi and Rwanda.

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