KAMPALA, UGANDA: The five member governments in the East African Community (EAC) should endeavor to purchase goods manufactured within the EAC Customs Union, the director general of the EAC directorate for customs and trade, Mr. Peter Kiguta has said.

Kiguta said this will not only promote intra-regional trade but also help, “our manufacturers grow and develop capacity to attain high standards.”

“Although intra regional trade has grown over the years, there is still a lot of room for further growth,” Kiguta said.

Kiguta said the volume of intra-regional trade in the EAC stands at 13%. Compared other trading blocs, trade between Uganda, Kenya, Tanzania, Rwanda and Burundi pales in significance when compared to the to Europe, which stands at 60% and Asia at 40%.

Kiguta said the key to unlocking this potential lies with the private sector taking advantage of new market opportunities created by the Customs Union.

He said that in order to do this, the private sector should review their strategies and structure to take a regional approach, adopt best practices so as to compete effectively against imported goods, pursue expansion of markets rather than lobbying for territorial protection and embracing and owning the Customs Union.

Partner States administrations are also expected to selfishly guard their commitments to the Customs Union and to refrain from activities that are protectionist like imposing taxes and levies of equivalent effect to tariffs. 

They should also refrain from granting duty exemptions outside the current customs regime.

“Failure to do this will jeopardize the impact of the Common External Tariff,” he warns.

Governments have been urged to continue removing and refrain from imposing new non tariff barriers to trade.

In respect to movement of goods, partner states should endeavor to adopt best practices such as risk based post clearance audit and pre audit release of goods so as to minimize dwell times at borders and ports.

“Tangible gains from regional integration are directly and indirectly related to the velocity of movement of goods across the partner states,” Kiguta said.

Governments should urge all institutions to embrace and practice good governance. Governments are urged to liberalize public procurement procedures to support intra regional trade.

“We are engaged in carrying out activities aimed at thrashing out the sticking challenges as stipulated in the Roadmap adopted by the Council during its meeting in November 2009,” Kiguta said. 

The new phase has a number of implications on the business landscape of the region for both the private and public sector because with the implementation of the Common Market protocol, there will be free movement of persons and capital. 
 

The effect of this freedom shall result in increased cross border investment in all the sectors of the EA economy while the new business climate will increase profitability, incomes and general welfare of the people of East Africa.
 

“Thus the new stage will have a positive impact on allocation of resources in the region, exploitation of scale of economies, profit margins, distribution of income, market size, efficiency of production and balance of trade in intra regional trade,” he said in a statement issued last week.

He said the secretariat shall continue to empower the private sector through dissemination of information, interpretation of legal instruments and where possible make strategic interventions.

It will also continue to initiate trade and customs policies geared towards achieving the objectives of the community and assist partner states to adopt best practices in handling activities related to regional integration.

Other policies will be aimed at opening up more trading and investment frontiers such as the operationalization of Export Promotion Schemes.

“We are developing an EAC manual on operationalisation of Export Processing Zones (EPZs); we are working on a regional work plan to enable member states take advantage of export markets under AGOA, now that EAC has signed a Trade and Investment Framework Agreement (TIFA) with USA.

The Secretariat is implementing a simplified trade regime at border entry points to support small traders.

“We are also commissioning a study to identify eight products commonly traded in EAC, with a view to identifying obstacles they face and eliminate them,” he said. 

ENDS