Services sector to benefit from EAC common market
Oct 11, 2009
A meeting of the multi-sectoral council of the East African Community (EAC) held in Kampala on September 25, adopted a draft common market protocol together with eight annexes.
Godwin Muhwezi
A meeting of the multi-sectoral council of the East African Community (EAC) held in Kampala on September 25, adopted a draft common market protocol together with eight annexes.
The draft common market protocol contains legal provisions on free movement of persons, removal of restrictions on the free movement of workers and the right of residence. It also proposes mutual recognition of academic and professional qualifications, free movement of capital, trade in services and safety measures.
The protocol spells out liberalisation of trade in services, which will open up one of the fastest growing sectors in the region. Unlike the manufacturing and agricultural sectors that have been developing since the industrial revolution, the service sector was, until recently, relatively undeveloped. However, recent developments have turned the service sector into the fastest growing whose contribution to the gross domestic product (GDP) can no longer be ignored.
Trade in services ranges from the simplest functions of an office cleaner through to the developed functions of information and communications technologies (ICT).
The current trend in ICT, particularly the Internet, has given rise to business outsourcing, increased demand for professional services, thereby ushering in a new era. This era could perhaps take us to the next revolution — the services revolution.
Presently, the services sector contributes about 50% of GDP of EAC partner states and is growing at about 10 % annually.
It is this industry that stands to benefit most from the EA common market when all restrictions are removed.
The draft common market protocol identifies financial services, tourism, education, communication, transport, distribution and business services sectors as some of the sectors to be liberalised. Partner states will continue negotiations to liberalise other sub-sectors in the services industry after the protocol comes into force on July 1, 2010.
EAC is also involved in negotiations with the European Commission for liberalisation of trade in services. While negotiations can be quite challenging, experience has shown that implementation is even a bigger task. What is required are national policies on trade in services.
The writer is a communications officer with the East African Business Council
A meeting of the multi-sectoral council of the East African Community (EAC) held in Kampala on September 25, adopted a draft common market protocol together with eight annexes.
The draft common market protocol contains legal provisions on free movement of persons, removal of restrictions on the free movement of workers and the right of residence. It also proposes mutual recognition of academic and professional qualifications, free movement of capital, trade in services and safety measures.
The protocol spells out liberalisation of trade in services, which will open up one of the fastest growing sectors in the region. Unlike the manufacturing and agricultural sectors that have been developing since the industrial revolution, the service sector was, until recently, relatively undeveloped. However, recent developments have turned the service sector into the fastest growing whose contribution to the gross domestic product (GDP) can no longer be ignored.
Trade in services ranges from the simplest functions of an office cleaner through to the developed functions of information and communications technologies (ICT).
The current trend in ICT, particularly the Internet, has given rise to business outsourcing, increased demand for professional services, thereby ushering in a new era. This era could perhaps take us to the next revolution — the services revolution.
Presently, the services sector contributes about 50% of GDP of EAC partner states and is growing at about 10 % annually.
It is this industry that stands to benefit most from the EA common market when all restrictions are removed.
The draft common market protocol identifies financial services, tourism, education, communication, transport, distribution and business services sectors as some of the sectors to be liberalised. Partner states will continue negotiations to liberalise other sub-sectors in the services industry after the protocol comes into force on July 1, 2010.
EAC is also involved in negotiations with the European Commission for liberalisation of trade in services. While negotiations can be quite challenging, experience has shown that implementation is even a bigger task. What is required are national policies on trade in services.
The writer is a communications officer with the East African Business Council