STRENGTHENING THE ROLE OF CIVIL SOCIETY IN DEEPENING EAC INTEGRATION

INTRODUCTION The East African Community Integration o EAC Integration process o Where we are? o Where we are going? Business Opportunities o Trade o Revenue performance o Investment o Reducing transport costs o opportunities

“EAC BORN AGAIN” Due to the challenges of globalization, the Partner states establish the new born East Africa Community through a treaty that came into effect in The community aims at developing policies and programes for widening and deepening cooperation among the partner states

THE EAC TREATY The “organic law” governing operations of the EAC. The “Compass” guiding the EAC integration process The “Tool kit” providing for the resolution to conflict and dispute. The “Insurance” that guarantees a secure future for all East Africans!

THE EAC JOURNEY CUSTOMS UNION COMMON MARKET MONETARY UNION POLITICAL FEDERATION

WHERE ARE WE TODAY? THE EAC CUSTOMS UNION o Established in 2004, implemented in 2005, and became fully fledged on 1 st January 2010 o Major components of the EAC customs union:  Common External Tariff (CET)  Rules of Origin (ROO)  Non-tariff Barriers (NTBS) o Goods produced in EAC are duty free

WHERE ARE W?E TODAY THE EAC COMMON MARKET o EAC Common market Protocol signed in November 2009 o Protocol ratified by all five partner states and came into effect on 1 st July 2010 o The protocol provides for: i.The free movement of goods ii.The free movement of persons iii.The free movement of labor iv.The free movement of services v.The free movement of capital vi.The right of establishment vii.The right of residenceS

WHERE WE ARE GOING? EAC MONETARY UNION Current Status o Study on criteria for establishment of EA Monetary Union completed o Draft protocol establishing the EA Monetary union is being discussed o Region to build on the progress under the customs Union and Common Market. o Focus on meeting the macroeconomic convergence criteria

WHERE WE A RE GOING? POLITICAL FEDERATION o Political federation is the ultimate objective of the EAC integration process o Following summit directive a decision was made to appoint a 15 Member Experts who are currently studying the various reports view of recommending the way forward. o The 15 member committee of experts started their work on 17 th February, 2010 and will submit their report in August 2010.

BUSINESS OPPORTUNITIES In Trade o Intra-EAC trade and post Customs Union In investment o FDI Flows Infrastructure; (Roads, Railway, ICT and energy) o Transport corridors o Fiber optic cable o Reliable and sustainable energy supplies Opportunities o The KCB’s and Nakumatt’s of the region Challenges o Implementation issues

TRADE Kenya’s trade balance with EAC partner states has maintained an upward trend since 2004 Total exports from Kenya to EAC partner states has been increasing relatively consistently. Imports fro Tanzania are the most prevelent, making up 58% of the 2008 total, although goods from uganda have been growing significantly, increasing by over 400% between 2006 and Although, imports have been increasing significantly, Kenya’s Balance of Trade within the EAC has remained strong and positive, due to the very competitive nature of its exports

REVENUE PERFORMANCE Increases in Revenue due to: o Improved economic performance o Improved tax administration o Growth in the volume of trade o Greater reliance on other taxes: Income tax, Excise Tax, Value added tax, other than Trade Tax

PARTNER STATES REVENUE PERFORMANCE, $US Millions 2004/052005/062006/72007/082008/07 Burundi Kenya4,0224,5705,7767,1997,234 Rwanda ,182 Tanzania2,3332,5742,9342,1375,460 Uganda1,9241,8222,3292,3982,594

INVESTMENT FLOWS Foreign direct investment (FDI) continues to be one of the cornerstones of economic development in the EAC Inflows of FDI have almost tripled from US$692 million in 2002 to $US 1,763 million in Uganda and Tanzania receiving a larger proportion between 2002 and Kenya’s share has been low until 2007 when FDI flows rose from $US 51 Million in 2006 TO $US 728 Million in This is due to privatisation of telecoms and investment in railways

REDUCING TRANSPORT COSTS Infrastructure o ROAD NETWORK o EAC has prioritized five corridors o Three of these corridors pass through Kenya i.Corridor 1: Mombasa-Malaba-Kampala-Kigali ii.Corridor 5: Tunduma-Arusha-Namanga-Nairobi- Isiolo-Moyale iii.Corridor 3: Mwanza-Isebania-Kisumu-Lodwar- Lokichogio.

INFRASTRUCTURE The main objective of the road network project is to improve trade environment through enhanced efficiency along the five corridors. Has the following components: o Development of one-stop border posts at Malaba, Busia, Isebania, Namamanga,Taveta, Lung Lunga. o Seamless transport through which cargo would cross the borders without unnecessary delays.

INFRASTRUCURE ICT DEVELOPMENT o Fiber optic cable has been laid o High speed internet connection. o Global connectivity. o Outsourcing opportunities. o Increased connectivity within the region

INFRASTRUCTURE ENERGY DEVELOPMENT. o The main objective is to address the growing energy needs in the community in which capacity is 2,559 MW against demand of 2,700 MW o Development of a gas pipeline from Dar es Salaam to Mombasa will facilitate cheaper access to the gas resources recently discovered in Tanzania. o Development of a gas pipeline from Eldoret to Kampala will facilitate cheaper transportation of petroleum.

EVIDENCE FOR BUSINESS OPPORTUNITIES Market size of over 126 million customers The common market implies you can expand your business in the region Business already reaping the rewards e.g. KCB, Uchumi, Nakumatt, Bidco,Equtiy Bank, and small bsuinesses. Developments of infrastructure, ICT, and energy have the potential to reduce costs. Statistics do not lie! Within the region is on the up!

ROLE OF CIVIL SOCIETY (1) The treaty for the establishment of the East African Community, Article 127 stipulates that partner states agree to “create an enabling environment for the private sector and civil society” The 16 th Council directed the secretariat to formulate an EAC Civil Society Mobilization Strategy.

ROLE OF CIVIL SOCIETY (2) EAC is a partnership between the partner states, the market and the civil society; CSO can work with EAC in range of functions, namely: a.Advocacy b.Watchdog c.Networking d.Research e.Technical areas f.Coordination and representative functions; and g.Citizens associations

ROLE OF CIVIL SOCIETY (3) The civil society could engage with the EAC through the East African Community Civil society organizations Forum (EACSOF) which was established in 2007 and has been holding meetings to discuss engagements with EAC.

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