Address challenges of the private sector in the EAC

By Miriam Katunze

trueThe Single Customs Territory (SCT) is an arrangement signed by the five East African  Community (EAC) member states that allows the clearance of goods and the mandatory assessment and collection of revenue at the first port of entry.

The SCT is aimed at freeing up trade as much as possible through measures like removal of tariffs and non-tariff barriers.

The implementation of the SCT started on 1st integration, the private sector especially the manufacturing wing faces challenges such as  discussed below, which if not addressed can impede meaningful implementation of the EAC Single Customs Territory (SCT).

Consultations with the private sector reveal that: first, there is little or no public awareness of the SCT for example some customs/immigration officers know little or nothing at all which leads to low efficiency.

Also some business persons have cited that they have been charged visa fees in Tanzania yet this nation is part of the EAC while others are not aware of the SCT and its implementation measures/procedures.

This lack of adequate knowledge may deem this arrangement futile but can be addressed if customs procedures and measures are translated in local languages at all border posts, ports and airports.

In addition private sector and not just its representative should be consulted in the formation of future and current  measures like the new  score card that assesses progress toward the implementation of the EAC common market (Check
EAC website).

Secondly, contradiction in the implementation of the counterfeit law among member states. This law is implemented in Kenya but is only a draft in Uganda.

In the absence of a concrete law, criminals in counterfeit activities may utilize this chance to the detriment of Uganda’s trade. Dumping and informal trade frustrates regional investments and may encumber the implementation of the SCT. Each member state should enforce laws against informal trade and put in place measures to reduce these activities.

Thirdly, the private sector is not very certain of the security of goods leaving and entering Uganda given the harmonization of weigh bridges. Much as they are in support of the SCT,  weigh bridges offered a sense of security from thieves and bandits.

On the other hand, the private sector is not in support of the corruption activities that occurred at these weighbridges but are
rather concerned that in the absence of these prior arrangements, their goods will be subject  to theft from bandits. Strong security measures at highways and various borders are therefore important and should be put in place.

Fourthly, given the milestone of EAC integration, this second stage towards the monetary union requires that all member states are committed to this trade bloc and should therefore adhere to all requirements of the SCT.

The private sector has fears that overlapping regional economic memberships especially the case of Tanzania (heavily involved in SADC and a member of the EAC SCT) may slow down the SCT. Although these fears will subdue once the tripartite is consolidated, it is imperative each member state remains loyal to this trade bloc.

Therefore, addressing these challenges in a timely manner will not only sustain but also improve trade  of January 2014. Despite this progress in the among member states.

The writer is a research analyst, Economic Policy Research Centre