The recent row on the ownership of Migingo Island has brought to the fore some of the challenges experienced by the East African Community (EAC) in its continued attempts for full integration.
For those who may not be aware, the first successful cooperation efforts for the East African community date as far back as the 1920’s. After years of working together in harmony, the community was dissolved in 1977 due to “ideological differences” (source: East African Standard) between Kenya and Tanzania.
However, in 1999, the current efforts were re-invigorated followed by the signing of a treaty and the re-establishment of the EAC in July 2004.
Economic integration allows an entire economic bloc to act as a single entity, and in the case of the East African Community, it is also intended to promote intra-trade and development among member nations. The integration of the East African Community was supposed to begin in the first instance with a common customs union followed by a common market, a monetary union and subsequently, a political federation.
As at today, it is only the first component which is in place with the signing of the Customs Union protocol in March 2004, after which Rwanda and Burundi came on board. The member states are currently in deliberation over the 2nd phase, the common market, but cannot seem to agree on salient fundamental issues related to land ownership, the easing of travel restrictions, among other issues.
As a businessman, I feel that the benefits far outweigh any challenges we could be experiencing. The first thing that comes to mind is that the economy of our closest neighbours Uganda and Tanzania is projected to grow at a higher rate this year than Kenya’s. We have also witnessed the emergence of Rwanda from a war-torn country to one that is very progressive. What is it that these countries are doing differently that has caused their growth to overtake ours yet we were the apple of the East African region? We have all been affected by the fall in prices of our traditional export commodities such as tea, coffee and cotton, but it seems that their lower levels of integration in the foreign markets have shielded them more than Kenya.
The other big benefit that comes to mind is that East African integration may create an internal market targeting over 100 million people for our goods and services. This is a much larger market compared to a country-specific one and can serve as a supplement when one country’s effective demand for products and services is down. The larger market can be enhanced by having in place policies that support free trade, which in itself has the potential to be a catalyst for the growth and expansion of the economies of member countries.
A good example of successful integration is that of the European Union which has reaped greater benefits from operating as a free trade area. It is important to note that they have put up mechanisms such as a common currency and ensured free movement amongst member states to promote free trade. I opine that this unity has probably shielded some small economies from experiencing the full-blown effects of the economic crunch.
For us East African countries, economic integration also means that we have stronger bargaining power when we trade as a bloc. This unity is especially important when we are negotiating trade and partnership agreements with the west. This is because we have greater power to bargain for more favourable terms as compared to, if we were to bargain as an individual country.
Obviously there are challenges associated to individual countries and more so because each is at its own economic level with different interests and goals for their economies. A country may desire a certain strategic position and the objectives of the EAC may not advance those strategies and development goals. The challenge for the EAC is to determine how best it can add value to each member state as well as be able to facilitate member countries in creating a balance between individual country goals and collective efforts. However, these challenges are not unique to the East African region and I am sure we can adopt the same strategies used effectively by other successful integration examples.
At the end of the day, what rings true to me, is that as a region we could stand to gain more and develop our economies greatly if we harness the power of integration. We should even study countries such as Ethiopia which is being able to meet the need for food through agriculture. More importantly, at this time we should focus on developing harmonised solutions that help us deal with the global economic crisis and mitigate the socio-economic effects, for all member countries.