Kenya and East Africa

East African Community is made up of five East African countries – Kenya, Uganda, Tanzania, Rwanda and Burundi – with a combined population of more than 130 million.Its headquarters is  in Arusha, Tanzania.

The Treaty for the Establishment of the East African Community was signed on November 30, 1999 and came into force on july 7, 2000 after ratification by the original three partner States — Kenya, Uganda and Tanzania. Rwanda and Burundi signed the EAC Treaty on June 18, 2007 and became full members from July 1, 2007.

The EAC aims at widening and deepening cooperation among partner States in political, economic and social fields for their mutual benefit. For this, the EAC established a Customs Union in 2005 and a Common Market in 2010.A monetary union is expected in 2012 and ultimately a political federation of the East African States.

The realisation of a large regional economic bloc of 1.82 million sq kilometres and a combined Gross Domestic Product of$60 billion (Sh4.8 trillion) bears great strategic and geo-political significance and prospects of a renewed and reinvigorated East African Community.

EAC is Kenya’s most important foreign policy vehicle and biggest trading and investment bloc. A common East African passport is in use to facilitate free movement of people in the region. With this regional framework, Kenya supports and encourages all efforts focusing on the full implementation of relevant treaty provisions that will lead a federation as quickly as possible.

EAC countries are major export destinations for Kenya. In 2008, Uganda was Kenya’s number one export destination. Tanzania and Rwanda were fourth and 10th worldwide respectively. In the same year, Kenya’s exports to the EAC accounted for 51.6 per cent of total exports to Africa.

The largest importer to Kenya is Tanzania, accounting for 58 per cent of all imports from the EAC. Overall, the value of exports from Kenya grew by 31 per cent between 2004 and 2008, while imports from Tanzania and Uganda grew by 300 per cent. Between 2005 and 2008, the EAC intra-trade rose by 49 per cent, with the value of trade increasing from $1.847 billion (Sh I 47.7 billion) to $2.715 billion (Sh217.2 billion).

Indeed, ensuring the success of the EAC is Kenya’s most important regional objective. Kenya has endorsed Article 123 of the EAC Treaty, which envisages a common foreign and security policy lor partner states.

The integration of EAC aims at closer and deeper integration among partner states through coordinated policies, projects and programmes in political, economic, social and cultural fields. It is envisaged that the DR Congo and Southern Sudan will join the EAC soon.

The EAC Treaty identifies 17 areas of cooperation, including trade, aviation, agriculture, fisheries, animal husbandry and environmental protection. The major steps towards full integration are a Customs union, a common market, a monetary union and, ultimately, political federation.

The increase in intra-EAC trade is attributed to the liberalisation of tariffs. A free tariff regime on most internal trade was adopted along side a progressive tariff reduction programme on some products from Kenya imported to Tanzania and Uganda.

East African citizens will reap the fruits ofintegration from the implementation of the Common Market Protocol in which free movement of goods, people, labour, services and capital, as well as right of residence and establishment, are guaranteed. Tariff barriers were dismantled in January 2010.

This transition did not have any negative impact on the partner economies. To the contrary, there is evidence of steady and substantial growth of revenue since 2005.

Another reality that the EAC Customs union presents is the adoption of a harmonised Customs tariffs and legal regime. A common external tariff of harmonised Customs duty rates applies uniformly in trade with
third parties.

The East African Customs Act and Regulations have created stability and predictability in the business environment in the region. No partner State can unilaterally amend the tariff or law to suit its interest. Any changes are jointly made by partner states and takes into account the interests of the region.