KAMPALA, UGANDA – Uganda’s integration process into the East African Community (EAC) Common Market that comes into effect on July 1, 2010 is being delayed by disagreements on the Common External Tariff and the review of the “Uganda List”.

The country is still carrying out studies on the Common External Tariff (CET) and still reviewing the Uganda List of the 137 raw materials and industrial inputs.

 

However the East African Community (EAC) secretariat has given Uganda a deadline of March 2010 in which the experts have to submit results of a study on the Common External Tariff (CET) and the “Uganda List” of 137 raw materials.

“We are carrying out a study on whether we should retain the zero percent tariff on raw materials, the ten percent tariff on intermediate goods and the 25% on finished goods as opposed to Kenya’s proposed 35% on finished goods,” Mr. Gideon Badagawa, the executive director of the Private Sector Foundation Uganda (PSFU) said.

 

“We are also reviewing the “Uganda List” of the 137 raw materials and industrial inputs that required a waiver, this is because we have developed some capacity to produce some of them but we are identifying those that still require a waiver,” he told The East African Business Week in an interview last week.

However Uganda’s high level task force chief negotiator, Mr. Moses Kaggwa said that Uganda’s integration process is being held back due to the delays to introduce a national identity card that is to be used by the nationals as an identification in the EAC partner states.

 

“Kenya and Rwanda already have national identity cards, Tanzania and Burundi have obliged to acquire them while Uganda still needs a budget of about $56 million for the national identity cards,” he said.

 

He however said the countries that are ready to use the national identity cards are free to do so and a period of time a national of one partner state may stay in the territory of another partner state as a visitor, tourist, student, patient among others is 180 days.

He said other issues that still need to be solved as far as free movement of workers is concerned include mechanisms for recognizing experience, education and training requirements, professional conduct, harmonization of fees for professionals and consideration for a harmonized minimum wage.

 

Others are credible national and community enforcement machinery, manpower surveys that are estimated to cost $419,962, strong notification rules and penalties among others.

 

Uganda Revenue Authority (URA) Commissioner for Customs, Mr. Peter Malinga said that although the Common Market comes into effect July 1, the EAC member states still have to address the issue of rules of origin.

 

“Rules of origin are still a nightmare, it is us Ugandans who go to Kenya for example buy products and repackage them to look Ugandan but this is killing the local industry,” he told members of the Uganda Manufacturers Association (UMA).

He said the biggest challenge is the existence of non-tariff barriers that include corrupt customs officials and police, corruption at the weigh bridges and business people who present high technically forged documents to unsuspecting customs officials for goods clearance in which they usually succeed.

 

“We were supposed to set up a monitoring mechanism for the removal of non-tariff barriers but the programme is in limbo,” Malinga said. “We have got a common customs law and a common external tariff but they are interpreted differently in the interest of each country.”

 

Malinga said the Customs Act is also interpreted differently, “for example Kenya does not allow Ugandan trucks to transport goods through and the cumbersome licensing procedures for clearing agents.”

 

He said the investment bodies within the EAC have not harmonized incentives although they exist in the Customs Act.

He said the community is still lacking a monitoring mechanism for tax exemptions and if tax are exempted the goods are not re-exported back into the country.

 

“Although 1100 standards have been harmonized, they are not known by the beneficiaries,” he noted.

He said that all these issues are addressed in the Customs Union Act but they have not been implemented.

ENDS