EAC monetary union:Somalia and South Sudan tops the agenda
The 15th Summit of East African Community (EAC) Heads of State kicks off in Kampala, Uganda today. East African Community has a market of more than 136 million people and is said to be one of the fastest-growing regional economies in the world offering immense opportunities. Since EAC took effect, it has extended the free flow of goods in the Eastern region of Africa to the free flow of services, skilled labor, investment and capital although some countries have not effectively embraced the idea. So for all purposes, the EAC is similar to the European Union including the monetary union being signed in Kampala by the head of states of Tanzania, Kenya, Uganda, Rwanda and Burundi. But for the five countries to enjoy the benefits of the EAC, its companies and people must be able to compete and be ready. When barriers to goods, services and skilled labor were removed, East African companies have been able to easily enter new markets with Kenyan companies venturing in all five countries markets including South Sudan. Companies have found it easier to operate in the region although Kenyan dominance is visible. And with Kenya being the largest economy in the region, it has naturally attracted more goods and services from Uganda and Tanzania.
Regional head of states meeting in Kampala today where they are expected to sign the East African Community monetary union and discuss the admission of South Sudan and Somalia application to join Africa’s most successful regional economic bloc must be prepared to explain to their citizens why the two countries seeking EAC membership are of any value. I see no reason why a lawlessness country like Somalia should be admitted. South Sudan is more of a basket case that will require a decade before it justifies its case. In recent months Ugandans and Kenyans have complained bitterly about South Sudan citizens harassment and losses worth millions of dollars. Even their government went ahead and detained Ugandan journalists without any justification. My verdict is that they shouldn’t be admitted to the regional bloc until they sort their mess. Before South Sudan and Somalia are admitted to the EAC they must offer a friendly investment climate and environment for investments and not the widely reported foreign owned businesses sabotage that has led to tens of deaths of businessmen specifically from Kenya and Uganda.
The five countries government should widely promote the EAC so that regions of the country know what to expect with monetary union being signed today in Kampala. The region cannot afford to be ill prepared for the start of the EAC monetary union expected in 2024 and one of the gravest mistakes they will commit would be to admit the two backwaters to the economic bloc. The governments should also ensure all regulatory and policy frameworks required for implementation of EAC are in place whenever a new country wants to join the bloc. Despite its achievements so far, East African Community member states should improve their trade and investment environment before it can really chart the way for the monetary union. The Kampala Summit taking place today will be a photo op where leaders are expected to make sweeping declarations and promises. EAC in the past has done well in formulating ambitious visions but most of them have come to naught. Close to two decades after the revival of EAC, a lot of work has been achieved but the road ahead is bumpy. Plenty of goals set by previous meetings and gathering are just an overall vision that keeps driving the regional economic bloc forward.
By pushing forward the growth agenda, East Africa’s leaders can enhance their prominence both at home and globally. They should, however, provide examples of regional success stories to showcase to the people. First, Contador Harrison think that the infrastructure development as an application of the EAC public private dialogue. There is also need to promote small to medium enterprises and developing entrepreneurship in the region to curb the rising numbers of the unemployed youths who have cried foul both in the region and African continent for being sidelined by gray haired men and women whose greed extend beyond graft and employment discrimination. SMEs and entrepreneurs are important to the East African economy as a source of innovation and employment. Heads of states meeting in Kampala today should emphasize regional cooperation to break down trade barriers and boost financial development and quality improvements in education.
Me think the five countries also need to agree on revenue sharing agreement in regard to single VISA system to encourage tourism and must include Tanzania and Burundi who are equally important members of the EAC and I strongly believe they should be sidelined just because they have raised concerns regarding revenue sharing. A good example is that Tanzania receives 1 million tourists with close to 450,000 of them passing through Jomo Kenyatta International Airport in Nairobi and Moi International Airport in Mombasa, a coastal city. If single VISA system entry is implemented, how the two countries share the revenue need to be agreed on soberly. East African tourism is an underperforming sector compared to the facilities it boasts and has large untapped potential. As an investor in renewable energy in the region, I must admit that the region has performed much better when it comes to encouraging private investment in green technology with Uganda being the most attractive of the five countries. Ugandan government offers plenty of opportunity to shine a good light on country’s efforts at dealing with climate change. EAC also needs to promote sustainable management of resources and agriculture and the region must keep up its efforts to protect forests and other resources. Security is also a major concern in the region and as the world witnessed the cruel attack on Westgate mall in Westland area of Nairobi, Kenyan capital two months ago, there is need for the region to improve its counter-terrorism profile.
Given the region’s history and recent rise in religious radicalism notably in Kenyan coastal region and Tanzania’s island of Zanzibar, a strong policy push for more counter-terrorism efforts would signal East Africa’s commitment. Overall, East African countries have vast potential to succeed on the continental stage, both in terms of trade and politics. The region has large consumer base that allows domestic demand-led growth and increasing resilience to external shocks. Sustained improvements have been made in region’s fundamentals like the proposed monetary policies expected to be signed today in Kampala, Uganda. As a keen watcher of the East African region, I think it has done well to come this far but it is essential to ensure that improvements will continue and that vested individual countries interests do not get in the way of an even brighter future for the world’s second most successful regional economic bloc and Africa’s best. The 21st century is bringing many other challenges for the region and its population ranging from human resource development to sustainable growth but that should halt integration progress in one of the most fertile investment destination in southern hemisphere. Mistrust should not be allowed to sink in and the 1977 break-up should serve as a stark reminder of what can go wrong.