EAST AFRICAN COMMUNITY INTEGRATION JOURNEY Ministry of East

EAST AFRICAN COMMUNITY “INTEGRATION JOURNEY” Ministry of East African Affairs Commerce and Tourism 1

Presentation • • • Introduction Stages of Integration Customs Union Common market Monetary Union Political Federation 2

Stages of EAC Integration Process CUSTOMS UNION COMMON MARKET 2005 – 2010 July, 2010 Ultimate MONETARY UNION POLITICAL FEDERATION 2012 3 3

REMOVAL OF ALL INTERNAL TARIFFS ACROSS THE EAC CUSTOMS UNION ELIMINATION OF ALL NON-TARIFF MEASURES AND BARRIERS APPLICATION OF THE COMMON EXTERNAL TARIFF AND RULES OF ORIGIN UMOJA WA FORODHA FREE MOVEMENT OF GOODS WITHIN THE EAC DEVELOPMENT & HARMONISATION OF EAC STANDARDS 4

Customs Union was Protocol was signed in 2004, launched on 1 st January 2005, and became fully -fledged on 1 st January 2010. It provides for the free movement of goods between Partner States with zero internal tariffs 5

KEY PILLARS q Internal tariffs eliminated by June 2010 in the Community q Fully implement the reviewed CET and avoid stay of CET application for certain goods in some partner states q Total commitment towards fully eliminating the existing non tariff barriers q Simplify the EAC Rules of Origin q Common Customs Law 6

COMMON EXTERNAL TARRIFF (CET) q CET – All partner states implementing a CET structure of 0%, 10% and 25%. Supported by a list of sensitive items. q Rules of Origin – EAC Rules of Origin in place 7

FREE MOVEMENT OF THE FACTORS OF PRODUCTION e. g. LABOUR, LAND, CAPITAL & ENTREPRENEURSHIP THE EAC COMMON MARKET • Signed on 20 th November 2009 • Fully ratified in April 2010. • Came into effect on 1 st July 2010 • Provides 4 freedoms and 2 rights 8

II. FREE MOVEMENT OF LABOUR I. FREE MOVEMENT OF PERSONS III. RIGHT TO RESIDENCE V. GRADUAL LIBERALISATION OF SERVICES THE EAC COMMON MARKET ANNEXES IV. RIGHT TO ESTABLISHMENT VI. FREE MOVEMENT OF CAPITAL 9

Common Market Protocol q. The Protocol establishing the EAC Common Market, signed on 20 th November 2009, contains 56 Articles and 6 Annexes of Regulations. q The Protocol provides for: I. Free Movement of Persons II. Free Movement of labour III. Right of Establishment IV. Right of Residence V. Free Movement of Services VI. Free Movement of Capital 10

3 RD PHASE OF THE EAC INTEGRATION PROCESS HIGH LEVEL TASK FORCE ESTABLISHED TO LEAD KENYA IN NEGOTIATIONS STARTED =>JAN 2011 THE EAC MONETARY UNION FOCUS ON MEETING CRITICAL CRITERIA TARGET DATE OF 2012 TO ESTABLISH MONETARY UNION 11

STEPS TO A SINGLE CURRENCY • East Africa Community partner states have to integrate their financial markets • Align their exchange rates • Make their currencies convertible across the region • Harmonize monetary policies 12

Political Federation • Fast tracking the EAC Political Federation • Report of experts on a study of fears, concerns, and challenges identified on political federation • Summit directed further work on how the fears can be handled • Negotiations ongoing 13

Governance 14

implementing COMMON MARKET ANNEXES ELIMINATING NTB/Ms CURRENT STATUS ALIGNING EAC LAWS WITH NEW CONSTITUTION MODALITIES FOR POLITICAL FEDERATION BEING LOOKED AT THE MONETARY UNION PROTOCOL INCREASING AWARENESS ACROSS THE SPECTRUM 15

Lake Victoria Basin • Lake Victoria Basin HIV& AIDS Partnership programme • Safety of navigation on the Lake • Lake Victoria Water and Sanitation Project • Mt. Elgon Regional Ecosystem Conservation project. • Mara River Basin project to deal with the main threats in the basin 16

Infrastructure ww w. e ac. int/ i nfr ast ruc utr e • Railway Master Plan • Road Master Plan • CASSOA • Maritime Port Bell frastrucutre www. eac. int/in LVEMP II project 17

EAC Road Network 18

Energy www. schunkhorizons. com EAC POWER MASTER PLAN • Construction of Oil and Gas Pipelines • Power Master Plan • Cross Border Electrification www. ecofriend. org www. redgreenandblue. com 19

Communications Broadband Infrastructure Network http: //sgp. undp. org http: //www. futmagazine. com http: //www. mbcf. nl/en/sectorfocus/ict E-Government Framework and Cyberlaws http: //www. jrcs. bardaglea. org. uk/ict 20

KENYA'S EXPORTS TO EAC 2006 -2010 in Bill Kshs. 2006 2007 2008 2009 2010 Tanzania 18. 29 22. 35 29. 22 30. 1 33. 31 Uganda 27. 82 33. 57 42. 29 46. 23 52. 11 Rwanda 4. 77 5. 80 8. 95 9. 54 10. 54 Burundi 2. 18 2. 42 3. 48 4. 6 5. 46 Total, EAC 53. 06 64. 14 83. 94 90. 47 101. 4 w w w. K R A. g o. k e ISO 9001: 2000 Certified 21

Kenya’s exports 12000 10000 8000 Tanzania Uganda 6000 Rwanda Burundi Linear(Rwanda) 4000 2000 0 2006 2007 2008 2009 2010 22

MARKET SIZE 133 MILLION PEOPLE FREE MOVEMENTS NO IMPORT DUTY OPPORTUNITIES INCREASED BUSINESS OPPORTUNIT IES RIGHT OF ESTABLISHME NT AND RESIDENCE ATTRACTION OF FOREIGN DIRECT INVESTMENT 23

Opportunities q Market size of 143. 5 million people q Combined GDP (nominal) of US dollars 110. 3 billion q Employment opportunities – Professionals – Administrators and Managers – Technicians and Associate Professionals; – Craft and related workers q Trade in Goods 24

Opportunities Cont… Trade in Services; – Professional and Business – Communication; – Distribution Services; – Education Services; – Financial Services; – Tourism and Travel Related Services; and – Transport services 25

NON-TARIFF MEASURES & BARRIERS OUTSTANDING ISSUES => THE CMP CHALLENGES IMPLEMENTATION OF DIRECTIVES & DECISIONS NATIONAL SOVEREIGNTY CONCERNS 26

Thank You 27