EALA Speaker, Rt Hon Daniel F. Kidega yesterday paid a courtesy call on the former President of the United Republic of Tanzania and the Facilitator of the Inter-Burundi Dialogue, H.E. Benjamin William Mkapa, in Dar es Salaam.
Discussions centred on peace and security in the region with H.E. Mkapa ascertaining the region had no option but to ensure tranquil is sustained for its progress and development.
H.E. Mkapa reiterated the need for the Partner States and the Community to stand by each other and to harness the strengths in order for the bloc to progressively move forward.
H.E. Mkapa said the Inter-Burundi dialogue remained a priority of the EAC, stating his intention to separately meet in the coming week with the Chair of the Summit of EAC Heads of State, H.E. Dr John Pombe Joseph Magufuli and the Mediator of the Inter-Burundi Dialogue, President of the Republic of Uganda, H.E. Yoweri Museveni for further consultations.
The Facilitator, H.E. Mkapa expressed hope that the Dialogue process would bring all Burundians to a common understanding that will result in peace, democracy and prosperity in the country.
On his part, the EALA Speaker said that the EAC had a fundamental role to ensure sustenance of peace in all the Partner States. He remarked that Burundi was showing signs of tranquility, but added that there was increasing need to re-integrate all its citizens.
The Speaker reiterated that one of the issues that underpin integration is that of finding solutions to the problems that may bedevil the Partner States, which he termed as “part of enhancing the bonds of sisterhood”.
He lauded the Summit of EAC Heads of State for recently directing that additional resources geared towards the Inter-Burundi Dialogue be availed. He informed H.E. Mkapa the Assembly was eager and keen to debate and approve a Supplementary Budget on the same.
The Speaker said EALA would also dispatch a team of Members from two Committees, Committee on Trade and Investments and that of Regional Affairs and Conflict Resolution to the border of Burundi and Rwanda to investigate on claims of restriction of goods and movement of persons at the border-point.
The German Ambassador to the United Republic of Tanzania and the East African Community, H.E. Egon Kochanke, today paid a courtesy call at the EAC Secretariat.
H.E. Kochanke was received at the EAC Headquarters by Hon. Christophe Bazivamo, the EAC Deputy Secretary General (DSG) in charge of Productive and Social Sectors, on behalf of the EAC Secretary General, Amb. Liberat Mfumukeko.
H.E. Kochanke congratulated Mr. Bazivamo on his recent appointment as DSG at the Heads of State Summit held in Dar-es-Salaam on 8th September, 2016.
The DSG and the German envoy discussed, among other things, how to strengthen the EAC-German cooperation for purposes of accelerating the integration process.
The German Ambassador expressed his country’s willingness to support the integration agenda by contributing to the Partnership Fund, which he described as a good instrument that enables EAC to directly access funds to facilitate a myriad of activities and programmes within the region.
Commenting on the progress of the dialogue process for Burundi Peace Talks, the German Ambassador hailed the Facilitator of the Inter-Burundi Dialogue, former President of the United Republic of Tanzania, H.E. Benjamin William Mkapa for being able to mobilize a large number of representatives to attend the dialogues.
Hon. Bazivamo also briefed H.E Kochanke on the status of EAC-EU-EPA; peace and security restoration and mediation dialogues in Burundi; as well as the status and procedure of integrating the Republic of South Sudan into the EAC.
He thanked the German government for its generous support to the EAC over the years, adding that the German government had extended 67 million Euros, which funds were channeled to finance various initiatives within the region for three years from 2015, for instance, the health and pharmaceutical sectors as well as Lake Victoria Fisheries Organisation (LVFO) projects among others.
Hon. Bazivamo noted that the Community was working to achieve the most important milestones within the Customs Union (Single Customs Territory) and the Common Market protocol, which milestones he added would enable the benefits of integration to trickle down to the people of East Africa. He noted that the trickle down effects would enable the people to appreciate and embrace the integration process. This is the only way they will be fully aware of the integration process.”
Amb. Kochanke was accompanied by Ms. Lena Thiede, Counsellor/Head of EAC Regional Head of Cooperation at the German Embassy in Dar-es-Salaam, and Mr. Bernd Multhaup, GIZ Programme Manager at the EAC Secretariat.
The East African Community (EAC) Secretariat, the European Union (EU), and the International Monetary Fund (IMF) jointly organized a high-level conference entitled “Regional Integration in the EAC: Making the Most of the Common Market on the Road to a Monetary Union” in Arusha, Tanzania on October 31–November 1, 2016. Discussions focused on progress in establishing Customs Union and Common Market so far, steps for strengthening them, and the prerequisites for an effective transition to East African Monetary Union (EAMU).
The conference brought together Finance Ministers and Ministers in charge of regional cooperation, Central Bank Governors, other senior policymakers, regional capital markets regulators, academics, civil society, and private sector leaders from across EAC member countries, as well as senior representatives from international financial institutions and other monetary unions. Policymakers of the EAC region reaffirmed their commitment to build a strong economic and monetary union.
Participants assessed the current state and pace of economic integration since the inception of the Customs Union in 2005 and the Common Market in 2010. Participants noted considerable progress towards a single entry visa, processing times at ports, and removal of internal tariffs. As indicated in the second EAC Common Market Scorecard 2016 which evaluates Partner States’ compliance to the free movement of capital, services, and goods, private sector representatives in particular underlined the need for further progress in the areas of non-tariff barriers, rules of origin, tax administration and harmonization, automation of trade process, and labor mobility to facilitate trade of goods and services further. Given experiences in other regions, sequential harmonization could be pursued in implementing the single customs territory and tax harmonization. Accountability and ownership are critical to a successful integration process.
Considerable progress has been made in financial sector integration, including integration of the payment systems and financial markets. In this regard, participants noted still high compliance cost in light of different regulations in member countries. On the Fintech front, however, the EAC region is ahead of many other countries in the world. The importance of proper sequencing and pace of financial integration was stressed in light of risks involved.
Under the theme “The Road toward a Monetary Union,” the status of macroeconomic convergence in the EAC was discussed. Participants acknowledged that fiscal deficits need to be brought down to meet the convergence criterion and to ensure the stability of the future monetary union. Convergence goes beyond headline fiscal deficits and public debt, and fiscal risks need to be monitored closely. Moreover, further progress is needed in data harmonization and monetary policy frameworks and operations, and there is a need to establish the new institutions that will play a key role for the implementation and resilience of the union.
The program, speeches and presentations to the conference are available at:
Following the conference, a forum on “Improvements in East African Statistics Through Capacity Development,” highlighted recent improvements in economic and financial statistics in EAC countries through capacity development initiatives supported by the EAC Secretariat and the IMF.
The 5th EAC University students’ debate, themed “Youth Participation in Electoral Democracy,” is taking place from 31st October to 3rd November 2016 at the Kigali Independent University in Kigali, Rwanda. The debate has brought together various participants including University students as well as lecturers, academia, policy makers, media, youth leaders and high school students from Uganda, Kenya, United Republic of Tanzania, and Rwanda, the host country.
The EAC University Students’ Debate Model is an interactive and representational style of debating aimed at educating, discussing and making resolutions among the Youth in East African to nurture a bond of “Eastafricaness” with a distinct East African identity.
The objective of the EAC University students’ Debate Model is to exchange information, share ideas and develop a common ground among the students and youth in the bloc.
The Motion for this year’s debate is “This House believes that effective Youth participation in Electoral Processes is a prerequisite for attaining sustainable Electoral Democracy in the East African Community.”
Officiating at the official opening of the Debate, Rwanda’s Minister of Trade, Industry and EAC Affairs, Hon. Francois Kanimba, challenged the students and youth in general to seize the opportunities being presented by the EAC integration process to advance their careers and sources of livelihood.
The Minister said the youth represent a larger demographic portion and constitute more than 63% of the EAC population hence they have a huge role to play in shaping the EAC they want.
“The energy, ideas and enthusiasm that you will demonstrate here are part of the solution to achieving a realistic EAC and Africa that we want. Our region needs a new generation of problem-solvers, who take positive actions and see farther, and work smarter to achieve the EAC vision,” said Hon. Kanimba.
Hon. Kanimba disclosed that under the Northern Corridor Integration project, Partner States had agreed to harmonize tuition and non-tuition fees with the aim of facilitating the free movement of people including students in within the Community. “Therefore, utilize these facilities well so that the dream of a prosperous East African Community can become a reality.”
Welcoming the Debaters, students and guests to the Kigali Independent University, the University’s Vice Chancellor; Dr. Sekibibi Ezechiel, commended the EAC Secretariat for choosing the institution to host the debate and urged the youth and students to passionately get involved in the regional integration process.
At the same function, the EAC Deputy Secretary General in charge of Political Federation, Mr. Charles Njoroge, said the theme of this year’s debate was timely and that the vitality of Youth participation in electoral democracy cannot be left to the whims of anyone but was a fundamental constitutional right that is encapsulated in most EAC Partner States’ Constitutions and the EAC Treaty.
“Participation is thus a component of democracy for young leaders in East Africa, which enables them to passionately cherish and jealously guard the principles of democratic governance in facilitating development of our region,” said Mr. Njoroge.
The Deputy Secretary General advised the youth to refrain from violence, corruption, and to always abhor divisive politics, which could endanger the unity and oneness of the people both within and among the Partner States, to ensure that the regional motto of “One People, One Destiny” is sustained.
He reiterated the need for Youth leaders to understand their societal values required to provide effective leadership in the EAC, which include upholding unity in diversity, being accountable and ensuring transparency, and Team work, as key to success.
“The East African Community is your region and your future. You need to collectively guard it well with an ultimate goal of attaining a Political Federation,” the Deputy Secretary General affirmed.
Mr. Njoroge informed the audience that since the inception of the Youth Debate in 2012, the Secretariat has been able to register tremendous achievements in EAC youth activities, which include the appointment of EAC Youth Ambassadors and their Deputies each year in every Partner State, adding that the Youth Ambassadors have competently taken up the mantle of continuing the dialogue; and reaching out to fellow young people throughout the region on the EAC integration.
East African Community Partner States have been challenged to benchmark themselves with the world’s most advanced economies if they are to grow their economies.
Hon. Amanya Mushega, a former EAC Secretary General, said the EAC needs to revisit and do away with the standard way of judging itself by Sub-Saharan African standards.
“India, Singapore and South Africa, just to mention but a few refused to treat themselves that way. They aimed high, looked at the way the USA, Japan, Germany, UK and the USSR developed their human resources, copied them with the view to competing with them and not fellow third world countries and the results are out,” said Hon. Mushega.
“Our problem of remaining poor and beggars is not lack of money or natural resources, it is our mindset. We have put the bar too low. We are not going to be competing with Gambia or Haiti but with Korea, Japan and China, first for our own EAC market and secondly, for the world market,” he added.
Hon. Mushega called for heavy investment by the Partner States in human resource development, and urged the Community to compare the number and quality of local skills with those countries that have prospered rather than the comfort zone of Sub-Saharan Africa.
“For EAC to develop, exploit its resources, build industries, not cutting and wrapping imported products for it to build and maintain roads, railways, airports and dams, compete in local and world markets, it must put maximum efforts on the quality of education and skills of its population. Don’t say but we are ok. We are not. The EAC is not yet our market,” said the retired diplomat.
Hon. Mushega was giving a keynote address titled The Hidden Challenges to Integration and the Way Forward during the opening of the two-day EAC-EU-IMF Conference on Regional Integration in Arusha, Tanzania. The theme of the conference is “Regional Integration in the EAC: Making the most of the Common Market on the Road to a Monetary Union.”
Speaking at the forum, Mr. Abebe Aemro Selassie, disclosed that at six (6) per cent, real GDP growth in the EAC in 2016 was expected to be well above the average for Sub-Saharan Africa, adding that prospects for 2017/18 also remain strong.
Mr. Selassie said that the challenge for the EAC as for other fast growing countries in Sub-Saharan Africa was how to sustain this growth over the medium term, how to ensure that scaled-up public investment and borrowing translates into durable growth and not unserviceable debt, and how to make this growth more inclusive.
“Faster economic growth within the EAC is therefore a potential “game changer” as it holds the promise of improved productivity, competitiveness and welfare gains,” said the IMF official.
He noted that while significant progress had been made since the inception of the EAC Customs Union and the Common Market including the establishment of a Single Customs Territory with a Common External Tariff and effective elimination of internal tariffs for goods meeting Rules of Origin – there is still work to be done.
“Customs valuation procedures have also varied across the region, despite the approval of the EAC Customs Valuation Manual,” he observed.
In her remarks, Hon. Jesca Eriyo, the EAC Deputy Secretary General (Finance and Administration), said that the Community had made significant progress in the areas of trade, financial and macroeconomic integration as well as building institutions necessary to support the integration process.
“The integration process is benefiting the East African people through increased trade, efficiency and productivity and enhanced financial integration. The recently established Single Customs Territory continues to deliver significant benefits to East Africans, including reduced transit times from port to destinations and fewer documentary requirements,” said Hon. Eriyo.
Hon. Eriyo revealed that financial integration in the EAC was deepening and that free movement of labour was becoming a reality, partly aided by the Mutual Recognition Agreements among professional associations including those for architects, accountants and veterinary officers.
She said that to ensure macroeconomic convergence ahead of the monetary union, convergence criteria pertaining to inflation, foreign exchange reserves, fiscal deficits and public debt would have to be achieved and observed.
“The purpose of the convergence process is to ensure that countries enter the monetary union without major disequilibria that could threaten its stability. However, convergence is not an automatic process. The experience of the Euro area shows that a set of mechanisms involving institutions and the use of incentives and corrective procedures to deal with deviations from pre-determined paths, have been needed to achieve convergence and keep union members aligned,” said the DSG.
The conference is being attended by international economists, leading policy makers from the region, ministers of finance, central bank governors, and senior treasury/finance officials, regional capital markets regulators, academics, senior staff from international financial institutions, senior representatives from other monetary unions and civil society organizations, and private sector leaders from the region.
The Secretary General of the East African Community, Amb. Liberat Mfumukeko today took over the Chairmanship of the COMESA-EAC-SADC Tripartite Task Force (TTF) over the next year from Dr. Stergomena Tax, the SADC Executive Secretary, who oversaw the work of the Tripartite from July 2015 to October 2016.
Addressing Hon. Members of the Council, Directors and senior officials from the COMESA, EAC and SADC Member States at the hand-over ceremony held at the Hilton Hotel in Nairobi, Kenya, Amb. Liberat Mfumukeko, commended Dr. Stergomena Tax for the exemplary leadership during the period of the Tripartite, especially given the resource constraints which have delayed the launch of Phase II negotiations and the implementation of other important activities.
The Secretary General noted that there were many hurdles to be overcome in meeting the clear priorities the Tripartite Council had set and he prioritized resource mobilization: finalization of studies for phase II negotiations whereby EAC will work closely with COMESA Secretariat on the necessary actions to be taken; Tariff Offer Negotiations to always be on the agenda of the relevant Policy Organs; and lastly Ratification of Tripartite Free Trade Area. He disclosed that EAC has pledged to ratify and deposit instruments of ratification by the end of February 2017 and urged all Member/Partner States to ratify the Agreement before the end of June 2017.
At the hand over ceremony, which was also attended by Dr. Stergomena Tax, the SADC Executive Secretary, Dr. Kipyego Cheluget, the COMESA Deputy Secretary, and Mr. Peter Kiguta, the EAC Director-General, Customs and Trade, the Secretary General pledged to work towards the attainment of the Tripartite Free Trade Area by June 2017.
The main focus during the SADC Chairmanship (July 2015 to October 2016) was to lead the TTF to facilitate Member/Partner States implement the directives of the 3rd Tripartite Summit following the launch of the Tripartite Free Trade Area on 10th June 2015 in Sharm el Sheikh, Egypt, namely: expeditious operationalization of the COMESA-EAC-SADC Tripartite Free Trade Area; finalization of outstanding issues on the COMESA-EAC-SADC Tripartite Free Trade Area Agreement in relation to Annex 1 on Elimination of Import Duties, Annex 2 on Trade Remedies and Annex 4 on Rules of Origin and the legal scrubbing of completed Annexes; and commencement of Phase II negotiations covering trade in services, cooperation in trade and development, competition policy, intellectual property rights and cross border investments.
The Eastern and Southern Africa Higher Education Centers of Excellence Project (ACE II) – which seeks to strengthen 24 competitively selected centers to deliver quality, market-relevant post-graduate education in Eastern and Southern Africa – was launched in Nairobi by the Inter University Council for East Africa (IUCEA) and the World Bank.
The five-year project will work to build collaborative research capacity in ο¬ve regional priority areas: industry (Science, Technology, Engineering and Mathematics), agriculture, health, education and applied statistics. The $140 million project is financed by the World Bank in form of credit to eight participating countries. These include Ethiopia, Kenya, Malawi, Mozambique, Rwanda, Tanzania, Uganda, and Zambia. IUCEA, an East African Community institution responsible for coordinating the development of higher education will facilitate and coordinate the project.
Hon. Fred Matiangi, Kenya’s Cabinet Secretary for Education, in his remarks to the participating country delegates, thanked the World Bank for its support for the education sector. He also called on all governments to end bureaucratic delays that slow project implementation.
“We don’t get any useful results from being bureaucratic. Governments should not be a hurdle; they should be a facilitating entity.”
Dr. Sajitha Bashir, World Bank’s Practice Manager for its Education Global Practice, said that the Bank sees this as a broader effort to build technical and scientific capability for Africa’s socio-economic transformation.
“Without these highly specialized professional skills and without that critical mass, we don’t think that Africa can transform itself,” she said.
Over the project’s duration of five years, the selected ACEs are expected to enroll more than 3,500 graduate students in the regional development priority areas, out of which at least 700 would be PhD students and more than 1,000 would be female. It also plans to facilitate publication of at least 1,500 journal articles, launch more than 300 research collaborations with the private sector and other institutions, and generate about US$30 million in external revenue.
Prof. Colletta Suda, Principal Secretary, Higher Education, Kenya, noted the great need for training in science and technology in the region, which currently lags behind in generating sufficient graduates in these fields.
“We have a shortage of graduates in engineering, manufacturing and construction, which translates to fewer skilled professionals with specialized knowledge in areas like oil and gas, energy and railways industries,” she said. “The scale of the need for highly skilled and specialised labour in the region is so large that it is unsustainable to send most of our post-postgraduate students abroad for training.”
Suda added that it makes sense to pool the Eastern and Southern Africa region’s existing human and financial resources into a few specialized centers that would have the explicit mandate of offering quality education and relevant research to serve the entire region’s needs.
All centers of excellence (ACEs) were selected through an objective, transparent and merit-based process. Out of the 92 eligible proposals submitted, 24 were selected from universities across the eight participating countries. Each ACE will receive US$4.5 – $6m to implement its own proposal.
It is envisaged that at the end of the project the centers will have developed sufficient capacity to become sustainable regional hubs for training and research in their specialized fields, capable of leading efforts to address priority development challenges and improve lives in the region.
IUCEA, the ACE II regional facilitation unit, will provide forums for the private sector and ACEs to share knowledge on collaborative research ideas. It will also supervise a competitive scholarship program in which 30 regional students in STEM will be financed for two years to attain a Master’s degree in any of the ACEs.
Prof. Alexandre Lyambabaje, Executive Secretary of IUCEA said the institute values this new partnership with governments in the region.
“We value this new partnership to improve the quality of training and research in higher education, and reduce the skill gaps in key development priority areas.”
The Secretary General of the East African Community, Amb. Liberat Mfumukeko yesterday paid a courtesy call on His Excellency Yoweri Kaguta Museveni, President of the Republic of Uganda, in State House, Entebbe, Uganda.
The Secretary General briefed the President on various integration matters including progress on consolidation of Customs Union, Common Market, Monetary Union, and Political Federation. The Secretary General also updated the President on the progress and roadmap on the integration of the new Partner State; South Sudan into the Community’s projects and programmes.
On his part, the President commended the EAC Secretariat and the Partner States for fast-tracking the joining of the Republic of South Sudan into the Community, which he emphasized, was a great gain in the integration agenda. He noted that this has enlarged the region’s political and economic space.
H.E Yoweri Museveni urged the Secretary General to fasten the process of Political Federation, adding that his dream was to see a United Africa and not only East Africa.
President Museveni, who is the Mediator of the Inter-Burundi Dialogue, informed Amb. Liberat Mfumukeko that it was important and necessary to engage all stakeholders in the dialogue that is geared towards attaining lasting peace in Burundi. He emphasized that there was need for peace in Burundi for the country to participate and benefit fully in the regional integration process.
Uganda’s Minister of State for EAC Affairs, Hon. Julius Wandera Maganda, accompanied the Secretary General to meet the President.
The second EAC Common Market Scorecard (CMS) 2016 which evaluates implementation of the EAC Common Market Protocol was launched yesterday in Kampala, Uganda by the EAC Deputy Secretary General in charge of Finance and Administration, Hon. Jesca Eriyo. The Scorecard 2016, which measures Partner States’ compliance to the free movement of capital, services, and goods, was developed by the World Bank Group together with Trade Mark East Africa at the request of the EAC Secretariat.
The Scorecard was developed over a period of 18 months under the supervision of the EAC Secretariat and Partner States. The areas of capital, services and goods were selected for scoping as they are fundamental to the operations of the Common Market.
Addressing the participants at the launching, the EAC Deputy Secretary General stated that “a number of reforms have been undertaken since the 2014 CMS. These have brought the total number of non-conforming measures (NCMs) down from 63 in 2014 to 59 in 2016.’’ While this shows progress it should be noted that all EAC Partner States remain largely non-compliant in their services trade liberalization commitments, added Hon. Jesca Eriyo.
Hon Eriyo disclosed to the participants that In CMS 2016 all Partner States were given full marks for compliance. Subsequent scorecards should consider assessing implementation of these commitments.The Deputy Secretary General informed the participants that the Scorecard is well aligned with the EAC’s implementation priorities. "It fosters peer learning and facilitate the adoption of best practice in the region”.
“The Scorecard will contribute to strengthen the regional market, grow the private sector and deliver benefits to consumers,” stated Hon. Eriyo.
She said the implementation in terms of recognition of certificates of origin, an issue repeatedly identified as a significant non-tariff barrier (NTB) in 2014, Burundi continues to earn full points and Kenya continues to score 90 percent. Tanzania’s recognition of certificates of origin has improved from 50 to 60 percent; Rwanda and Uganda’s scores have both declined, indicating a worsening performance in terms of recognizing certificates of origin of other EAC Partner States. Most countries improved their score on applying tariff equivalent charges, though such charges persist as barriers to intra-EAC trade, stated the EAC official.
Hon Jesca Eriyo disclosed to the participants that the EAC average of resolution of new NTBs for the 2016 period was about 54 percent, better than the 38 percent rate for CMS 2014. The EAC Deputy Secretary General called for greater information sharing regarding the Treaty and Protocol provisions in the Partner States. Some members of the private sector, including private sector apex bodies, were unfamiliar with the Protocol or with the commitments affecting their operations. Hon Eriyo urged Partner States to strongly engage and inform the private sector on the implications on these reforms on their day-to-day operations across the region and develop a private sector reform champions who could help push for implementation.
Catherine Masinde, the Practice Manager, East Africa, Trade and Competitiveness, World Bank Group, said, EAC Partners have done a commendable effort in removing barriers to free movement of capital, services and goods, but more needs to be done.
She said the EAC Scorecard provides transparent, rigorous, unbiased and client-led data on the key implementation gaps to the integration of the region’s economies. It also highlights possible reform areas to improve compliance to the Common Market Protocol”.
On his part Vice Chairman of East African Business Council Uganda, Kassim Omary, said it is of atmost importance to measure the extent to which the EAC Parter States are translating the Common Market Protocol into policies that support actualization of free movement of people and workers, goods, services and the rights of establishment and residence within the EAC Partner States.
Mr Richard Kamajugo, Senior Director of Trade Mark East Africa in-charge of Trade and Environment, said that the TMEA Program of support to the Common Market Scorecard has been running from 2012 to march 2017,under the EAC Investment Climate Programe. He said the total budget support to the program was $ 10.4m, through IFC and EAC (technical support), under a 5 component program aimed at increasing inter and intra-regional trade and investment through investment climate reforms supporting the EAC Common Market.
A three-day meeting attended by a broad spectrum of stakeholders and experts from the Automotive Industry, Finance, Customs and Trade sectors as well as vehicle manufacturing company representatives from the East African Community Partner States has come to a close at the Sarova Panafric Hotel in Nairobi, Kenya.
The main objective of the meeting organized by the EAC and the Japan International Cooperation Agency (JICA), was to review and validate the progress report of the Comprehensive Study on Automotive Industry and provide inputs towards finalization of the same and also inform the EAC and potential private sector investors (both foreign and domestic) on policy options and modalities to promote and develop the motor vehicle industry in the region.
The EAC Industrialization Policy and Strategy (2012-2032) aims at ‘transforming the manufacturing sector in EAC through higher value addition and product diversification based on comparative and competitive advantages of the region’ and is currently under implementation.
The 16th Ordinary Summit of the East African Community Heads of State of 20th February, 2015 “directed the EAC Council of Ministers to study the modalities for promotion of motor vehicle assembly in the region, and to reduce the importation of used motor vehicles from outside the community, and to report progress to the 17th Summit.”
The Summit at their 17th Ordinary Meeting held on 2nd March, 2016 took note of the progress and roadmap towards finalization of the Comprehensive Study on the Automotive Industry in the region and directed the Council to expedite the process and to the 18th Summit.
In implementing the Summit directives, the EAC Secretariat partnered with JICA, which commissioned a consultancy study to be finalized in April 2017. The draft progress report on automotive industry in the EAC outlining the status of automotive industry in the region, and the initial policy issues emerging from the benchmarking missions was prepared. The team embarked on consultative missions to EAC Partner States to compile baseline information on the status of the automotive industry, and to Vietnam and Japan for a benchmarking exercise from 20th September to 7th October, 2016.
Japanese academicians shared their global best practices of promoting the automotive industry in the EAC region while the Partner States made presentations on the status and challenges facing the automotive industry in their countries.
It was observed that the motorcycle sector is growing rapidly in the EAC region. With the rise in number, the sales price drops due to economies of scale. Further, along with the increase of production volumes, local production is gradually initiated for parts and materials that meet the effective minimum production scale. In addition to the complete build-up unit sales itself, demands are increased for repair services and their associated areas (forward linkage effect). This sector therefore offers opportunity for rapid development and needs to be initial entry point for rapid development of the automotive industry.
The study missions to Vietnam and Japan revealed that the usage of local content was one of the drivers for the growth of the automotive sector. This is an area that EAC needs to explore further and adopt appropriate measures which will consequently spur the development of the sector.
The experts also noted, among other things, the need for policy coherence within different sectors for the progress of the automobile sector. It was also observed that for the automotive industry to grow there is need for volumes that can lead to economies of scale and therefore, a regional approach to develop the sector and leverage on the EAC, COMESA and SADC Tripartite Free Trade Area.
Having considered the mission study report and a summary of issues and observations deliberated, the meeting was declared officially closed by the Chairperson; Eng. Elli Pallangyo, Assistant Director, Ministry of Industry, Trade and Investment from the United Republic of Tanzania.
