|
With only three years to go, the road to EAC still full of menace
2006-01-11 09:04:03
By Mireny John
Over the past decade, Tanzania and Uganda have continued to be net importers of Kenyan goods, though at a decreasing rate.
The available trade balance figures show that in 2004, Tanzania exported to Kenya goods worth USD78.8m, while imports from Kenya were as high as USD117.3m.
On the other hand, Tanzania exports to Uganda rose to USD11.9m while imports went down to USD6.9m, according to the Bank of Tanzania’s annual report.
These figures testify how strong the Kenyan economy can be, as well as showing us some future implications of what will happen when the East African Customs Union (EACU) takes root in three years time.
Although the partner states have agreed on a gradual tariff reduction, analysts take with a pinch of salt the possibility that Uganda and Tanzania will be able to boost their exports to Kenya with a view to narrowing the trade deficit.
What makes Kenya tops above all is its strong manufacturing sector which, even before independence, had been stable and growing.
Ideological experiments, such as nationalisation, have never been attempted, even after independence.
A strong base of entrepreneurial culture has for the last four decades been inculcated, while the spirit of capitalism is naturally cherished in all spheres of life.
Tanzania, and especially Uganda, have been pressing for a more careful and gradual imposition of the Common External Tariff (CET) ever since the bargaining for the revival of the East African Community started in the early 1990s.
This is for the simple reason that they are aware of their own weak economic profiles.
While the process towards EACU seems right now almost irreversible, the Ministry of East African Affairs in place notwithstanding, some smart actions must be accomplished before 2010, with a view to ensuring that at least, we have something to offer which, the common market wants.
Certainly, in any regional integration scheme, there are losers and winners, but the protocols for practical co-operation are arranged with a view to fostering a win-win trade situation.
Essentially, the principal guides us that the strongest shouldn’t, for the sake of equity, take it all and compromise the mutual interests among partner states.
Fortunately, we have set on course particular business facilitating initiatives, which, if well implemented, could reposition Tanzania at a better competitive edge when the community market is declared open in 2010.
The Export Processing Zones (EPZs) and the Special Economic Zones (SEZs) need to be made operational according to the stated codes.
The government, in particular, should get committed to putting in place the services necessary for these business models to work, as has been the case in Kenya.
It also needs to be emphasized that unless, a lasting solution to our exorbitant and unreliable power supply is immediately found, the road to EACU will be extraordinarily rough.
The brunt of expensive electricity weighs heavily on the Small and Medium Enterprises (SMEs), especially the start-ups, whose growth and consolidation will be an important factor in determining both the volume and availability of goods on the envisaged common market.
A late 1990s study, which attempted to rate labour productivity in East Africa, ranked Kenya at the top of the bar charts, while, last year, a section of domestic investors lamented about negative labour perception prevailing in Tanzania.
One has to improvise an education system that is demand-driven, inculcating in students creative and innovative skills, which, are adaptive to different working conditions, with a penchant for delivery.
Otherwise, once we allow free movement of labour in the region under the status quo, we could count ourselves off the labour market, sadly enough, voluntarily.
The future is yet to slip out of our hands. The daunting challenge is how to enhance domestic productive capacity for both goods and services with qualities acceptable on the market.
This grand goal is possible, given undeterred determination.
|
