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The East African Community Regional Integration Between Aspiration and Reality

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The East African Community Regional Integration Between Aspiration and Reality 9/10|2011 KAS INTERNATIONAL REPORTS 91 THE EAST AFRICAN COMMUNITY REGIONAL INTEGRATION BETWEEN ASPIRATION AND REALITY Stefan Reith / Moritz Boltz “One people, one destiny” – so runs the slogan of the East African Community (EAC), which was re-established in 2001. Few of the numerous African regional organi- sations set their sights quite so high. Unlike the more well-known federations COMESA, SADC and ECOWAS, EAC has enshrined political union in its founding treaty. Its ambitious timetable envisages a common currency by 2012; the common market was introduced last year. Stefan Reith is Resi- Integration – for which the EU, NAFTA and ASEAN provide dent Representative of the Konrad-Adenauer- inspiration – is seen as the road to affluence and growth. Stiftung in Tanzania. However, the rhetoric of leading decision-makers often contrasts sharply with the sobering political reality. The East African Community is strong on paper, but weak in the implementation of its decisions. It is at risk of losing the support of civil society and becoming the scapegoat of national politics. In these circumstances it is doubtful whether the tight timetable can be adhered to. There is a significant gulf between aspiration and reality. Among the voices that have warned against excessively high expecta- Moritz Boltz is study- ing politics, economics tions is that of the former German president Horst Köhler, and law at Ludwig who stated that the EAC runs the risk of disappointing the Maximilian University region’s people, since it has ambitious plans but little to in Munich. From May to July he was based show in the way of results. The Community is on the right at the KAS office in track, he said, but poor fiscal discipline and promises that Tanzania while he cannot be kept could jeopardise the process of integra- researched the East African Community. tion.1 It is true that the benefits of cooperation do not arise automatically. Successful regional integration requires strong institutions, broad support among the population 1 | Horst Köhler was speaking in June 2011 at a conference in Arusha organised by the Konrad-Adenauer-Stiftung and the East African Community for the purpose of discussing these issues. 92 KAS INTERNATIONAL REPORTS 9/10|2011 and a clear commitment to the project on the part of the elites. Only then will the potential that undoubtedly exists be unlocked. HISTORY The history of regional cooperation in East Africa goes back to pre-colonial times. The first moves towards cooperation between states were made in 1919. Kenya, Tanganyika and Uganda – all of them under British administration – formed a customs union. Yet even in the first half of the 20th century, the differing economic orientation of the three countries was apparent, paving the way for a wide range of later compatibility problems.2 Economic links were strengthened in 1948 by the founding of the East African High Commission, which established a unified income tax in addition to a customs union. After the end of the colonial period, two organisations played a major part in the pursuit of regional integration. The East African Common Service Organisation (EACSO) succeeded the colonial-era East African High Commission. However, for the majority of decision-makers in the 1960s, EACSO was too closely associated with pre-independence structures. In addition, attempts to set up a central bank foundered in 1965. Plans to introduce a common market proved difficult In 1967, the first East African Commu- to be implemented. Yet there was still strong nity was founded. It collapsed in 1977 interest in regional cooperation, and so in due to its lack of steering functions, the unequal distribution of benefits 1967, the first East African Community was and the differences of opinion between founded. The three member states of Kenya, leading players. Tanzania and Uganda agreed to cooperate on a wide range of economic and social issues. The first EAC, and the extensive integration which it achieved, was hailed a success, but the project nevertheless collapsed in 1977. The failure of the first East African Community can be attributed to four main factors: firstly, its lack of steering functions; secondly, the unequal distribution of benefits; thirdly, the purely intergovernmental – i.e. interstatal – 2 | Uganda and Tanzania were predominantly export-oriented. Kenya’s economy had a more domestic focus. The financial sector therefore developed much sooner in Kenya. In addition, more investment was channelled into Kenya as a colony, whereas Tanzania was merely under British mandate. Cf. Edward Kafeero, Customs Law of the East African Community in light of WTO Law and the Revised Kyoto Convention (Munster, 2009), 83. 9/10|2011 KAS INTERNATIONAL REPORTS 93 structure; and, fourthly, the irreconcilable differences of opinion between leading players, especially between the Ugandan dictator Idi Amin and the Tanzanian president Julius Nyerere. In the years that followed the collapse of the first EAC, the three former member states attempted to regulate economic affairs by means of individual multilateral agree- ments. Important steps towards establishing a community were taken in 1993 and 1997 at two summits of the heads of state. In 1993 the Permanent Tripartite Commission for Cooperation was set up: a coordinating institution that in 1998 produced a draft treaty for the later EAC. Cooperation on security matters was also initiated during this period. In November 1999, the Treaty for the Establishment of the East African Community was signed by the heads of state of Uganda, Kenya and Tanzania. It entered into force on 7th July 2000. Two new members, Rwanda and Burundi, joined the Community in 2007. What lessons has the present-day EAC lear- By now, management of cooperation ned from the collapse of its predecessor? has been improved, greater attention has been paid to fair distribution of the Firstly, the management of cooperation has benefits and the EAC now allows civil been improved by setting up permanent society and market forces to play a more prominent part. institutions. Secondly, greater attention has been paid to fair distribution of the benefits of cooperation. For example, transitional customs regula- tions are designed to protect the Tanzanian and Ugandan economies from the dominance of Kenyan exports. Thirdly, the EAC now allows civil society and market forces to play a more prominent part. However, the powers of the interstatal institutions remain weak. All major decisions affecting the Community must be taken by consensus of the member states. AMBITIOUS GOALS, SOBERING REALITY On paper, the East African Community is a very ambitious organisation. The tight integration plan progresses through the stages of regional integration at a gallop: customs union, common market, monetary union and finally political federation. In 2004, the Committee on Fast-tracking the African Federation – commissioned by the Secretariat – 94 KAS INTERNATIONAL REPORTS 9/10|2011 actually published a report that envisaged accelerating the unification process, recommending that the integration stages be pursued not sequentially but in parallel.3 However, this strategy creates difficulties. In recent years, a more down-to-earth attitude to the ambitious goals has been adopted. Monetary union has been postponed. The protocol for the common market has been in force since 1 July 2010, but its national implementation is still faltering. The EAC itself acknowledges that The secretary general of the EAC ad- the implementation of the agreed decisions mitted that implementation of the com- is inadequate. Practical implementation of mon market would probably take deca- des, since non-tariff barriers are still the common market is therefore increasingly a problem. being regarded as a process that must take place over time. The new secretary general of the EAC, Richard Sezibera, admitted that implementation would probably take decades.4 In the light of the preceding integration stages, this sober prediction is understandable. When the customs union was introduced in 2004, it was not possible to immediately implement it in full: gradual reduc- tions in duties on goods from Kenya protected Tanzania and Uganda from their economically strong neighbour.5 As the EAC pointed out in its Annual Trade Report 2009, non-tariff barriers6 are still a problem. National Monitoring Committees are due to monitor the removal of these barriers. In addition, it is hoped that cooperation with the East African Business Council (EABC) will ease the finding of a prompt solution.7 However, it remains uncertain whether attempts to remove non-tariff barriers will succeed. 3 | Cf. East African Community, “EAC Fast Tracking Report 2004,” http://eac.int/politicalfederation/index.php?option=com_ docman&Itemid=28 (accessed June 30, 2011). 4 | Sezibera at the conference of June 2011 in Arusha (see n. 1). 5 | Cf. East African Community, “EAC Customs Union Protocol 2004”, http://eac.int/commonmarket/document tation/cat_ view/24-documents-a-downloads/30-common-market-protocol- a-annexes.html (accessed June 30, 2011). 6 | Non-tariff barriers include, among other things, cumbersome and expensive licensing, high charges at border crossing points, charges for infrastructure use, poor security and geographic barriers. Cf. Heinz-Michael Stahl, “Tariff Liberalization Impacts of the EAC Customs Union in Perspective,” tralac Working Paper, (2005) 4, 1-38. 7 | Cf. East African Community, “EAC Annual Trade Report 2008,” http://eac.int/statistics/index.php?option= com_docman& task=cat_view&gid=48&Itemid=153 (accessed June 30, 2011). The figures relate to the three founder members. Rwanda and Burundi are not included. 9/10|2011 KAS INTERNATIONAL REPORTS 95 Against this background it would seem that hopes of imminent political union are illusive. Nevertheless, the EAC continues to hold fast to this goal. And initial steps towards integration in the non-economic sphere are indeed being taken: there are plans for the EAC to play a more major part in regional stability – since all the member states except Tanzania have internal political difficulties to contend with.
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