EABC decries non-tariff barriers

By Francis Kagolo in Arusha

The continued imposing of non-tariff barriers (NTBs) by the East African Community (EAC) member states is limiting the growth of the private sector and slowing down integration, experts have said.

The East African Business Council (EABC) on Friday urged EAC member states to accept to open up and work as one entity if the region is to develop and overcome challenges of unemployment.

The EABC chairman, Vimal Shah, said the spirit of individualism among member states not only hampers foreign direct investments, but also disables the growth of businesses in the region.

“We have a population of 130 million people in east Africa with a GDP of $90b. We need to create more jobs to increase our GDP to more than $100b,” Shah said.

“Nothing is stopping us from reaching there apart from ourselves and our mistrust. The private sector is becoming impatient in terms of implementing EAC agreements.”

He was speaking at the opening of the 15th EABC annual general meeting at the East Africa Hotel in Arusha, Tanzania.

Established in 1997, the EABC is the apex body of business associations of the private sector and corporate from Uganda, Kenya, Tanzania, Burundi and Rwanda, the five member countries of EAC.

It focuses on informing public policy reforms aimed at promoting an environment in the region conducive to business formation and growth.
Intra-EAC trade has expanded from $1,617.1m to $3,800.7m in 2010, while the growth informal cross-border trade has been estimated to be as much as 40% of formal trade.

But EABC argues that greater achievements of the integration are hampered by the different measures taken by governments in form of laws, regulations, policies, conditions and restrictions that protect the domestic industries from foreign competition.

The 2004 Community Customs Union and the 2009 Common Market protocols, already ratified all the five member states, provide for the free movement of labour and goods within the region to spur trade liberalisation and development.

Shah said he had met many investors especially in Europe who would be willing to invest in east Africa but are let down by the enormous non-tariff barriers.

He also cited the failure by member states to market east Africa as a single block other than their individual countries as another impediment to foreign investments.

Olive Kigongo, president of the Uganda Chamber of Commerce and Industry, decried the delay by member states to rid east Africans of the need to apply for work permits to get employed there.

She said that save for Rwanda, which has removed the requirement for work permits, other member states are yet to implement the EAC condition.

“We need to talk less and work more. We need to implement the policies we come up with,” Kigongo said in an exclusive interview.
“The free flow of services needs to be expedited. As private sector we are becoming impatient. Let us allow free movement of labor, if we get problems along the way we will address them as a region not independently,” Shah added.

Besides EAC protocols, the East African Legislative Assembly (Eala) has also passed a series of legislations which call for harmonisation of trade in the partner states,  but with such non-tariff barriers, trade movement remains a challenge in the region.

The World Bank Doing Business 2013 report highlighted NTBs as one of the key challenges the region is faced with. Besides NTBs, inadequate infrastructure and bottlenecks, particularly roads, railways and energy have also hindered progress in a number of ways.