Closer economic union in East Africa shall boost industrialization

18Jul 2019
Dar es Salaam
The Guardian
Closer economic union in East Africa shall boost industrialization

EFFORTS to move forward with East African integration have received a boost lately in joint remarks by President John Magufuli and his guest, Ugandan President Yoweri Museveni who took out time in his daily activities to see the Tanzanian leader at his Chato residence over the weekend.

Not only are personal rapports between the leaders of the sub-region’s major economies in better shape at present than earlier, though limitations are rife on the western hemisphere of the sub-region but policy proximity is increasing. All seek to uplift business.

The visit came in the wake of another private visit by Kenyan President Uhuru Kenyatta, in a sense occasioned by a disagreeable rant from a rather comic parliamentarian, but having potentially serious effects on the safety and wellbeing of other East Africans in Nairobi. With memories still fresh of how immigrant traders from other African countries are regularly savaged in South Africa, taking clear positions on the rant was not beyond the call of duty. This position taking has also helped to cement the goodwill for residents of other countries, part of integration.

Given the fact that the countries have border communities with shared heritage, language and even clan commonality, chances of further integration apart from business endeavor to use opportunities across the region continue to rise. In addition, each country faces problems of this or that nature in convincing foreign investors that all is well with what the country is doing, even if the pressures these countries face are unequal. Kenya has usually enjoyed a higher level of investor confidence but it has a more clogged business environment; many disembark elsewhere.

While the leadership in Tanzania ardently wishes for industrialization, it is hard to say if this wish has been checked, for purposes of implementation, with what foreign investors feel about the business climate in the country. The government took a number of structural remedies in a number of sectors over the past two years or so, and they did not create an inhospitable condition for foreign investors. But there are regulatory worries especially about the rule of law, where as it is the case elsewhere, investors wish that supranational law is applied, so that it is fully neutral.

As everyone knows, state formation is always work in progress and even more so in Africa, hence investors can’t sink a lot of money on unpredictable investment scenarios where any change in holders of power can mean gain or ruin on an investment. Not that without regional integration nothing shall work, but investors are more assured, relax at the prospects of court-based investment regulation, nor ministerial tribunals whose loyalties aren’t far to seek. That is why supranational institutions are a minor blemish for sovereignty, but a boost for economy.

As they say, Rome was not built in a day, so the transition from operational national identities at policy and economic level to supranational identity, like the East African Common Market and the newly unveiled Continental African Free Trade Area will take a while. But we are in the right direction as breaches of the sense of commonality are roundly condemned, which means there is readiness to live together. What remains is to get a fuller picture of its economic benefits, but as EAC member states focus on improving the business environment, this shall manifest itself soon.