Common Market is good for us

Dec 06, 2009

After the signing of the common market protocol by the EAC heads of partner states, we should cease lamenting but direct more energy onto how opportunities can be tapped.

BY HERBERT KABAFUNZAKI

After the signing of the common market protocol by the EAC heads of partner states, we should cease lamenting but direct more energy onto how opportunities can be tapped.

Contentious issues like land ownership, common external tariffs, travel documents and protection of ill-prepared local manufacturers and workers have at least been compromised on, as leaders focussed on the expected future fortunes of partner states.

This means that goods, services and the partner countries’ 126 million people can move freely across their borders, in theory at least, as we await the practical bit.
However, even with these tremendous developments, a big percentage of local Ugandan traders are neither aware nor bothered by any of these issues of international concern!

As a result, the burden continues to remain with government bodies like URA to forge strategies to sensitise our local traders on the recently signed protocol.

For instance, traders have continued to smuggle duty- free goods and instead ended up paying highly in form of bribes and enduring risks associated with this criminal vice.

Sensitisation, therefore, must be a priority even before the changes are effected come July 2010.

As we look forward to interconnectivity and consequently having a one-border-stop centre for the entire East Africa, priority should be given to our traders if they are to benefit.

Local trades should also realise that the Uganda Revenue Authority (URA) will be relieved of goods traffic from neighbouring countries, especially Kenya and would therefore concentrate on domestic taxes.

Like other developed countries whose national revenue is derived from domestic taxes as compared to import duties, URA is expected to take the same trend. This might increase tax audits to resident companies and individual traders.

For this reason, traders should clean up their house and make sure that their books of accounts are in order to avoid further punishment by the tax body.

Given that Kenyan industries are indeed more advanced than Ugandan industries due to natural reasons of land lockedness, manufactures should improve their innovations before the referee blows the whistle for the match that begins in July 2010.

Operation of the customs union aside, URA has still been taxing goods coming from Kenya but on a reduced balance and this will be no more come July 2010.

Arguments of our industries being frail and still in infancy might not hold water any more.

Local traders should be willing to venture out to partner states and do business other than pointing fingers at those in the game.

It is amazing that Kenyan businessmen have rocked Sudan to tap opportunities as our local traders, who double as Sudan’s immediate neighbours, look on with arms crossed.

We have for long been open to foreign workers in the banking, advertising, oil industry, insurance, capital markets, media sectors and even breweries and free movement of labour should not be new to us but it calls for seriousness less we are out- competed.

Earlier perceptions that customs union would negatively affect economies of some partner states in revenue erosion and competitiveness do not hold any longer as trade with the EAC instead grew by 47% last year.

Since there are no more delays due to intermitted back-pedalling by bureaucrats, East Africans should get off the ground and join the global league of translating provisions of the treaty into economic opportunities.

As consultations towards the process to the birth of a ‘super state’ in the name of political federation continue, the serious determination of East African leadership and citizens will construct a powerful and sustainable East African economic and political bloc.

It is also clear that in the current global trend, negotiations are only carried out under regional blocs.

Therefore joining hands in strengthening of the community is not a matter of choice any more but rather a necessity.

The writer is a director with KHAN BUSINESS CONSULTANCY

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