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1st July 2010
Commencement of the EAC Common Market
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EAC to mark 10th Anniversary PDF Print E-mail

The presidents of Tanzania, Kenya, Uganda, Rwanda and Burundi meet in Arusha, Tanzania, on Friday this week for the East African Community (EAC) Heads of State Summit meeting and the signing of the East African Common Market Protocol.


The event will also be the climax of celebrations to mark the 10th anniversary of the EAC.

The Common Market Protocol that is expected to come into full force in July 2010 after ratification by all the Partner States will usher in the free movement of persons, labour, services, goods and rights of residence in the region. The advent of the Common Market will certainly stimulate economic growth not just for Kenya but for the entire region.


The Common Market will not come into force immediately after its signing by the Heads of State because it has to be referred to national systems in the various Partner States for ratification. In Kenya, for instance, the protocol will have to be approved by the Cabinet before it is taken to Parliament for enactment into law. It is anticipated that the ratification process will be smooth since most of the outstanding issues have been ironed out after protracted negotiations between the Partner States.

The 10th anniversary and the Common Market no doubt symbolize the coming of age for an organisation that has had, to say the least, a chequered history. From a population of less than 20 million when it was initially established in 1967, the EAC has today grown into a trade bloc with a market of approximately 120 million people.

The original EAC was established in 1967 by presidents Julius Nyerere (Tanzania), Milton Obote (Uganda) and Jomo Kenyatta (Kenya), three very charismatic leaders; the kind, sages believe, come once in several generations. The expansion of the EAC to include Rwanda and Burundi, with many more countries within the region waiting to join, may probably have exceeded the expectations of the three icons who led their countries to independence in the early 1960s. Southern Sudan has already applied for observer status in the EAC.

Although it lasted for only 10 years up to 1977 when it collapsed, the EAC was an idea ahead of its time. Even the European Economic Community, the precursor to the current European Union borrowed a lot from the experiences of the EAC. The death of the EAC was, however, inevitable due to a host of factors. The major ones were ideological differences in economic policy between the three member states, personality differences among the three leaders, and a perception on the part of Uganda and Tanzania that Kenya was the sole beneficiary of the regional trade bloc.

With Tanzania having adopted a socialist path through its Ujamaa policy and Uganda heading the same way through Dr Obote’s Common Man’s Charter of 1969, only Kenya was left to pursue the path of a mixed economy with free enterprise as provided for by the Sessional Paper No. 10 of 1965 on African Socialism.

Matters were complicated further on January 25, 1971 when Obote was toppled by General Idi Amin, his army Commander, while attending a Commonwealth conference in Singapore. Nyerere offered refuge to Obote whom he considered the genuine president of Uganda and refused to share a table with Amin who he adamantly refused to recognise. EAC summits became a virtual impossibility. Amin was a frequent visitor to Nairobi; something certainly did not endear Kenya to her southern neighbour.

Other factors that may have led to the collapse of the pioneer EAC were lack of conflict resolution mechanisms and the fact that the three governments were the sole stakeholders. The citizens and other private sector did not really own the EAC.

The EAC collapsed under a lot of acrimony after only just 10 years of existence. However, its revival was only just a matter of time as the three countries soon realised that they shared more than just national boundaries and a common colonial history under the British.

Following the dissolution of the first EAC in 1977, the three member states negotiated a mediation agreement for the division of assets and liabilities, which they signed in 1984. However, as one of the provisions of the mediation agreement, the three states agreed to explore areas of the future cooperation and to make concrete arrangements for such cooperation.

Subsequent meetings of the three heads of states led to the signing of the Agreement for the establishment of the Permanent Tripartite Commission for East African cooperation on November 30, 1993. Full cooperation operations began on 14th march 1996 when the Secretariat of the Permanent Tripartite Commission was launched at the headquarters of the EAC in Arusha, Tanzania.

Considering the need to consolidate regional cooperation, the East African Heads of State, at their Summit in Arusha on 29th April, 1997, directed the permanent tripartite to start the process of upgrading the agreement establishing the Permanent tripartite Commission for East African cooperation into Treaty.

The treaty making process, which involved negotiations among the member states, as well as wide participation of the public, was successfully concluded within three years.  The treaty for the establishing of the EAC was signed in Arusha on 30th November, 1999. The Treaty went into force on 7th July 2000, following the conclusion of the process of ratification and deposit of the instruments of ratification with the Secretary General by all the partner states.

When the Treaty came into force, the East African Community came into being. On 28th June, 2007. The republics of Rwanda and Burundu signed the Treaties of accession in the East African Community formerly joining Kenya, Uganda and Tanzania in the now enlarged Regional Economic Community (REC

The community has made several significant steps since its re-establishment with the signing of the Customs Union Protocol in 2005 and the upcoming Common Market Protocol. Still to come are the East African Monetary Union and the Political Federation that is envisaged to come into existence by 2012.

The Customs Union which comes into full force in January 2010 will set the stage for the harmonisation of, revenue systems, customs and investment laws. The East African Common Market will entail the free movement of persons, labour, services, goods, rights of establishment and residence, resulting in a single market of approximately 120 million consumers with no internal frontiers.

Rights of establishment mean that one can move from one partner state and establish a business in any other state within the trade bloc without a hitch. The Common Market will catalyse economic growth for Kenya and the EAC region at large.

Several strides have however been made even before the coming into force of the Common Market. For instance, it is now possible to exchange Kenyan currency into Tanzanian shillings and vice versa. Formerly, if you were traveling to Tanzania you would first exchange your money into US dollars or sterling pound that you would again change into Tanzanian currency. This was quite a hassle for residents of the two neighbouring countries that share a lot of things.

Kenya will certainly benefit a lot from the Common Market since it has the biggest and most diversified economy. Greater benefits however mean that we have a greater responsibility – political, social and economic – to ensure that the integration process is smooth for the entire region

 

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