Although many countries and regional economic blocs in the world are making efforts to remove barriers within their relative geographical areas, the East African Community (EAC) partner states seem to be heading in the opposite direction.
According to the Chief Executive Officer Kenya Association of Manufacturers Phyllis Wakiaga, non-tariff barriers continue to impact the movement of people and goods, which is an essential element for economic growth in the region.
While talking to East African Business Week recently during business dialogue in Kampala at Grand Imperial, Wakiaga noted that the barriers have affected growth of export trade among EAC member states despite the region having put in place strong trade and Industrial policies.
“The EAC has in place an Industrialization Strategy that aims to expand trade in manufacturing, by increasing trade among the EAC Partner States for manufactured products to at least 25% and increasing exports of manufactured goods to countries outside the EAC to at least 60% by 2032.Whilst the Strategy seeks to expand trade, it is unfortunate that our regional exports, which are mainly raw materials, are decreasing,” she explained.
The World Bank Group has stated that countries, which open themselves up to international trade, tend to grow faster, innovate more, improve productivity and provide higher income and much more opportunities for their people.
Wakiaga challenged the EAC member states to emulate the European Union (EU) which has scrapped off over 45 barriers to trade.
“The EU for instance, lifted 45 obstacles in 2017, twice as many from 2016, as recorded by a 2018 European Commission Annual Report on Trade and Investment Barriers. Furthermore, the EU companies exported an additional €4.8 billion in 2017 due to barriers removed between 2014 and 2016,” she said
EAC global exports decreased by 9.3 percent to US$ 14.7 billion in 2017 from US$ 16.2 billion in 2016. The main regional export commodities included gold, coffee and tea.
According to the EAC Trade Investments Report, EAC intra-regional exports increased from US$ 2.7 billion in 2016 to US$ 2.9 billion in 2017. Kenya, South Sudan and Burundi recorded a decline by 7.4 percent, 24.2 percent and 6.0 percent respectively.
Wakiaga explains that this is a clear indication that it is time the Partner States work together in driving the competitiveness of industry to realize the Economic goals of the EAC Bloc.
“It is therefore critical that the partner states work in sync to address the myriad of Non-Tariff Barriers (NTBs) that continue to impede the expansion of Intra-EAC trade. If these NTBs are resolved, the region will also see the realization of the EAC Trade Integration Agenda,” she added.
Barriers have made it difficult for some products from member states to get to the regional market. As result this can result in unfair practices such as smuggling among other forms of illicit trade, which puts the lives of many at risk.
Additionally, companies end up underutilizing their operational capacity resulting into poor economies of scale and gowing unemployment rates in the region.
BY SAMUEL NABWIISO