EAC INTEGRATION PROCESS Achievements and Challenges in the

EAC INTEGRATION PROCESS: Achievements and Challenges in the Implementation of the Common Market Jean Claude Nsengiyumva Deputy Secretary General (Productive & Social Sectors) Lake Tanganyika Basin Development Conference, 27 -29 Nov 11, Bujumbura

The Common Market Protocol was signed on 30 th Nov 2009 and launched in all Partner States on 1 st July 2010

Contents � � � � The Four Pillars of the Integration Process Key Features of Customs Union and the Common Market Facilitating Realisation of the Common Market Achievements Challenges Addressing the Challenges Looking Ahead

Market-Driven Good Governance Rule of Law Political Federation Common Market People-Centred Monetary Union Customs Union EAC Integration Creation of Enabling Environment Equitable Distribution of Benefits Good Neighbourliness Peaceful Settlement of Disputes Mutual Benefit Mutual Trust Political Will Sovereign Equality Peaceful Co-existence

EAC Integration Process � � The East African regional integration is a progressive process Movement from one level of integration to another is through negotiated protocols, starting with Customs Union Protocol followed by Common Market, then Monetary Union and ultimately Political Federation � Customs Union was launched in January 2005 � Common Market was launched in July 2010 � Negotiations on Monetary Union are ongoing � Sensitization on Political Federation is ongoing

PILLAR 1 Free movement of goods Removal of NTBs Customs Union Common External Tariff Trade Facilitation Institutional Framework for Customs Management

PILLAR 2 Common Market Free movement of Persons and Labour Free movement of Services

PILLAR 2 Common Market Free movement of Capital Right of Establishment and Residence

Projects & Programmes to support implementation of Common Market � � With the establishment of the Customs Union in 2005 and the Common Market in 2010, EAC has realized systematic and steady progress on its Treaty commitments In order to facilitate realisation of the Customs Union and Common Market, integration efforts are ongoing in many sectors guided by the provisions of the Treaty and decisions of the EAC Policy Organs: � Infrastructure � Energy � Environment & NR � Agriculture & FS � ICT � OSBP

Projects & Programmes to support implementation of Common Market Review of Immigration policies and laws Harmonisation of policies and laws in various sectors Harmonisation of education systems and training curricular Development of standardised framework and benchmarks for mutual recognition of Academic & Professional Qualifications

Achievements � Increased intra-EAC Trade: � � � Intra-EAC trade has grown by over 50% as a result of the Customs Union since its launch. Signing of the Double Taxation Avoidance Agreement in Dec ember 2010 is expected to increase benefits of Customs Union Significant cross-border Investments and Foreign Direct Investment Inflows � � FDI have increased from USD 683 m to USD 1. 7 b over the past five years Contrary to initial fears, there is a general fair spread and distribution of the benefits among the Partner States under the Customs Union.

Achievements � � Partner States have agreed on a programme to review internal laws to conform to the CM fully by 2015 Some Partner States have relaxed travel and work permit requirements for East Africans treated as residents while visiting Partner States Priority given to projects in infrastructure Roads, Railways, Inland Waterways, Ports and Harbours, Communications/ICT, Energy and Civil Aviation, Energy, Environment and Natural Resources Management and Food Security

Achievements � 24 hour opening of border points within the region, opening of more border points and creation of one stop border points for busy points � � � e. g Malaba, Katuna, Namanga, Busia, Gasenyi/Nemba, Isebania Project on Integration of financial markets has been initiated Modalities on transferability of workers’ social security benefits are being negotiated

Challenges � � � Lack of awareness by the Nationals of the Partner States on the EAC integration agenda and the benefits of the integration process. Lack of comprehensive sensitisation of the East Africans on the provisions of both the CU and the CM Protocols. NTBs to Customs Union – Road blocks, paper work, … � � Slow start of Common Market despite high expectations during its launch Crowded calendars of National Assemblies could delay amendment of national laws to conform with provisions of the CM Protocol

Addressing the Challenges � � A program to address challenges to CU and CM has been put in place and will be implemented in close collaboration with EAC Partner States and East African Business Council. Awareness creation by the EAC Secretariat and the MEACs in Partnership with the Private sector at national and regional levels on the benefits of the CU and CM Removal of trade barriers through simplification/ harmonisation of procedures Commitment to total removal of NTBs

Looking Ahead � The EAC programme in the next five years intends to achieve, among others, the following priority strategic objectives: � Strengthening the operations of the Customs Union, in particular the establishment of the Single Customs Territory � Implementing the Common Market Protocol � Protocol on the Monetary Union � � � Intensifying regional Infrastructure development; and establishing adequate and reliable Energy supply Enhancing agricultural production and food security Full ratification and implementation of the Protocol on Environment and Natural Resources Management

Conclusion � � � Actualization of the Common Market and the related projects and programmes can result in dramatic economic upturn of the EAC region. The prompt domestication of the provisions of the Common Market Protocol within Partner States’ National Laws and their implementation is, therefore, critical. Significant gains in Cross-border Investments and Foreign Direct Investment Inflows expected.

The End

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