The Director General of EAC Customs and Trade Directorate, Mr. Peter Kiguta, has called on the governments of the EAC Partner States to liberalize public procurement procedures and purchase goods manufactured within the Customs Union in order to boost intra-regional trade.

Noting that intra-regional trade had increased over the years with great potential for further growth, Mr. Kiguta urged the private sector to take advantage of new market opportunities created by the Customs Union to unlock the potential of EAC intra-regional trade.

“Intra-regional trade is merely 13 per cent of the total volume of trade in EAC. This is very low compared to Europe where it accounts for 60 per cent and Asia at 40 per cent,” he added.

He was speaking at a press briefing on the commencement of a fully fledged EAC Customs Union on 13th January at the EAC Secretariat in Arusha. 

Mr. Kiguta called for the commitment of private and public institutions, urging them to embrace and practice good governance towards the realization of a peaceful and secure business environment.

He further urged businesses to align their strategies and structures with the regional approach, adopt best practices so as to compete effectively against imported goods, pursue market expansion rather than lobbying for territorial protection, embrace and own the Customs Union.

Mr. Kiguta noted that the Customs Union ideally had two main pillars namely the establishment of a Free Trade Area among the member countries and a Single Customs territory. The just-ended five-year transition period which started in 1st January 2005 involved putting in place mechanisms to operationalise the two pillars.

“The end of the transition period in December last year was one of the most important landmarks of the EAC integration process,” he stated, adding that the successful elimination of internal tariffs among Partner States was a show of commitment by the people of East Africa to the objectives of the Community.

The end of the transition period marked the entry into force of a fully fledged Customs Union on January 1 2010, and coming into being of the entry point into the EAC regional integration process. The move, he pointed out, had since strengthened the commitment of the Partner States to launch the implementation of the Common Market in the second half of this year.

Mr. Kiguta reiterated that under the fully fledged Customs Union, goods manufactured in one partner State shall move to other Partner States without suffering any import duties. “Goods imported into the Customs Union shall, once modalities for collection and accounting for Customs revenue are worked out, move freely from one Partner State to another once they enter the Customs Union.” However, like any other new undertaking, he said this may not be working perfectly at the moment.

He added that the EAC Secretariat is currently engaged in activities aimed at thrashing out some of the sticky challenges, as stipulated in the EAC Customs Union Implementation Roadmap adopted by the Council during its meeting in November last year.

He further noted that the new phase has a number of implications on the business landscape of the region for both the private and public sector.  At the outset, goods will circulate more freely in the Customs Union than ever before. “With the implementation of the Common Market protocol, it is expected that there will be free movement of persons and capital,” added the Director General.

This freedom is expected to increase cross border investment in all the sectors of the East Africa economy, with positive impact on resource allocation 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.

Mr. Kiguta said the EAC 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 assisting Partner States to adopt best practices in regional integration activities and those aimed at opening up more trade and investment frontiers such as the operationalisation of Export Promotion Schemes.

 

 

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