FUTURE

EAC private sector tables expectations for upcoming summit

Through EABC, the private sector has tabled these to the EAC Council of Ministers

In Summary
  • They are urging EAC Heads of States to direct relevant Government bodies to fast track the admission of the Democratic Republic of Congo (DRC) into the EAC bloc.
  • Finalization of the comprehensive review of the EAC Common External Tariff, harmonization of EAC domestic taxes are also some of the key issues the private sector is keen on.
EABC CEO Peter Mathuki speaks during a media forum in Nairobi, on January 21/COURTESY
EABC CEO Peter Mathuki speaks during a media forum in Nairobi, on January 21/COURTESY

The East African private sector is urging EAC Heads of States to direct relevant Government bodies to fast track the admission of the Democratic Republic of Congo (DRC) into the EAC bloc.

The sector is also calling for a coordinated approach in responding to Covid-19, adopting the EAC Open Skies Policy and coming up with solutions to persistent Non-Tariff Barriers(NTBs) in the upcoming 21st EAC Heads of State Summit.

Through EABC, the private sector has tabled these to the EAC Council of Ministers among the matrix of issues to be considered in the Summit slated for February 27 2021.

This, in a move set to improve the business environment in the region and rebound an economy embattled by the pandemic.

DRC offers a large market for EAC SMEs to tap into. DRC will in turn benefit from the larger EAC Common Market and Common External Tariff Framework
EABC CEO Peter Mathuki

Finalization of the comprehensive review of the EAC Common External Tariff (CET), harmonization of EAC domestic taxes and tapping into the African Continental Free Trade Area are also some of the key issues the private sector is keen on.

According to a study conducted by EABC in collaboration with GIZ Creating Perspectives, on the opportunities for trade in the DRC, the value of goods imported in the DRC in 2019, stood at $6.6 billion.

However, EAC exports to the DRC in 2018, stood at $855.4 million, representing 11.5 per cent of total DRC imports while China dominated as the top exporter with a 31.2 per cent share.

DRC offers a large market for EAC SMEs to tap into. DRC will in turn benefit from the larger EAC Common Market and Common External Tariff Framework,” said EABC CEO Peter Mathuki.

Uncoordinated approach on the Covid-19 pandemic has brought forth new trade barriers leading to congestions at EAC border points, increased cargo transit time and escalated the cost of doing business.

For instance, cargo transit time more than doubled in the Northern corridor between January and September 2020.

Intra-EAC trade contracted due to Covid-19 and is exacerbated further by the persistent NTBs related to Rules of Origin and import bans that continue to deny market access of products made in East Africa.

We urge the EAC Heads of State to direct relevant Government bodies to fast track bilateral and diplomatic engagements to solve these persistent trade disputes and NTBs and finalize the operationalization of the EAC Trade Remedies Committee,” said Mathuki.

Total EAC exports decreased by 4.7 per cent to $14.0 billion in 2018 from $14.7 billion in 2017 of which, intra-EAC exports accounted for 22.4 per cent.

The trade deficit for the EAC region increased by 39.4 per cent to $24.3billion in 2018 from $17.4billion registered in 2017.

The reviewed EAC CET is expected to encourage more value addition and protect priority value chain sectors in the region.

Strengthening of regional value chain is paramount as Covid-19 disrupted the global supply chains hence necessitated manufactures to rely more on the region to source raw materials and inputs.

Implementation of the Open Skies for cargo in the EAC will increase connectivity, improve consolidation and boost export of fresh products (horticulture & fish) to international markets amid the pandemic.

EABC is also calling for the implementation of the EAC Regulations on Liberalization of air transport services to reduce air ticket and freight costs.

With the AfCFTA now in force, the private sector is calling for the finalization of EAC remaining tariff offers and ratification by all partner states to take advantage of the 1.3 billion people market.

EABC is also calling for the adoption of the One Network Area model by all EAC Partner States to reduce the high cost of telecommunications in the region.