Progress of the EAC Integration Process
Over the last 22 years, the EAC has made significant progress on its journey towards EAC integration. The agenda is far from finished but it is clearly on the right path despite various challenges. This journey commenced in 2000 and is underpinned by three main protocols: the Customs Union (2005), the Common Market (2010), and the Monetary Union (2013) which once fully implemented should pave the way toward the ultimate goal of a Political Federation.
The Customs Union Protocol (2005)
The establishment of the Customs Union in January 2005 kick-started the new era of the integration process. The Customs Union Protocol became fully operational in 2010. The main objective is to further liberalize intra-regional trade in goods on the basis of mutually beneficial trade arrangements among the Partner States; to promote efficiency in production within the Community; to enhance domestic, cross-border and foreign investment in the Community; and to promote economic development and diversification in industrialization in the Community.
The key aspects of the customs union include a Common External Tariff (CET) on imports from other countries outside the EAC; duty-free trade between the Partner States; and the adoption of common customs procedures.
With effect from 1st July, 2022 the EAC Common External Tariff (CET) will be structured under four bands of:
- 0% for raw materials and capital goods;
- 10% for intermediate goods not available in the region;
- 25% for intermediate goods available in the region; and
- 35% for imported finished products available in the region
Other key achievements of the Customs Union include the reduction of non-tariff barriers and enriching the business environment in the region. For example, the introduction of the Electronic Single Window System (ESWS) significantly reduced the time of clearing goods by an estimated of days. Single Customs Territory helped transit goods to be cleared at the first point of entry in EAC, weighbridges removed, police and customs checkpoints reduced, computerized clearance introduced and electronic cargo tracking systems in place. Most importantly transit time was reduced from 21 to 5 days from Mombasa to Kigali, for example, the cost of hiring a truck to convey cargo from Mombasa to Kigali was reduced by about US $1000 from $5,200 in 2010 to $4,200 in 2014.
EAC Common Market Protocol (2010)
In accordance with articles 76 and 104 of the Treaty for Establishment of the East African Community, the EAC Partner States concluded a Protocol on the Establishment of the East African Common Market and it came into force on 1st July 2010. The overall objective of the EAC Common Market is to widen and deepen cooperation among the Partner States in the economic and social fields for the benefit of the Partner States and their citizens. The common market facilitates the free movement of Goods, Persons, Labour; Services, and Capital and introduces the Right of Establishment and Residence.
The main achievements include the use of IDs/student cards as travel documents, removal of visa and work permit fees for East Africans, the right of establishment and Residence and East Africans have one common East African Electronic Passport from January 2017. Establishment of One Network Area (ONA) for both calls and data by the removal of roaming charges in the region, making it easier to facilitate the exchange of information, business and best practices. Several infrastructural projects are underway such as OSBPs, Roads; standard gauge railway (SGR), and oil pipelines/refineries.
The Monetary Union Protocol (2013)
On 30th November 2015, the Summit approved and signed the protocol on the establishment of the East African Monetary Union and directed the Council of Ministers to implement the 10 years roadmap to a single currency to establish the institutions necessary for the implementation of the protocol. The institutions are: - i) the East African Monetary Institute; ii) the East African Statistics Bureau; iii) the East African Surveillance, Compliance and Enforcement Commission; and iv) the East African Financial Services Commission.
The Council of Ministers is in process of developing Bills for eventual enactment by EALA establishing the said institutions to implement the EA Monetary Union protocol.
Political Federation
Political Federation is the ultimate stage of the EAC integration with the overall purpose of uniting the Partner States into a Federal State into a unified political authority with the capacity to coordinate their policies, address common political, security, social and economic challenges, for sustainable growth and development in the Community.
In 2004, a committee (“the Wako Committee”) comprised of eminent persons from the Partner States was established with a mandate to examine ways and means of fast-tracking the East African Political Federation.
Later, between 2007 and 2009, national consultations were undertaken in the Partner States to obtain the citizens’ attitudes towards the integration and political federation. In 2010, the Council constituted a team of experts to undertake detailed studies on the concerns raised and challenges identified by the Political Federation during the national consultations with a view to proposing means of addressing them. The team of experts then developed various proposals including the Model of the Structure of the East African Political Federation.
The 33rd meeting of the Council of Ministers held on 29th February 2016, adopted a Confederation as the Model of the East African Federation. The Confederation model will be gradual, incremental collaboration in specified areas where the Partner States will pool their sovereignty. The Council of Ministers has appointed a team of constitutional experts to develop the constitution of the Confederation.
The Democratic Republic of Congo formally joins EAC
On 8th March 2022, in Nairobi Kenya, the Democratic Republic of Congo (DRC) formally joined the East African Community (EAC) after the signing of the Treaty of the Accession into the EAC. The Chairperson of the Summit of EAC Heads of State, H.E. President Uhuru Kenyatta, signed the Treaty of Accession with the President of DRC, H.E. Félix-Antoine Tshisekedi Tshilombo, at State House, Nairobi. DRC now has up to 29th September 2022 to undertake internal processes to ratify the Treaty and deposit the instruments of ratification with the Secretary General.
The signing of the Treaty of Accession marked the formal entry of DRC into the EAC after satisfying all the conditions under Articles 3 and 4 of the Treaty for the establishment of the EAC.
The accession of DRC as a seventh member state of the EAC elevates the gains and strengthens the region’s economic muscle and competitiveness in the realisation of the promise of the free movement of people, goods and services across the Community. The entry of DRC increases the region’s combined GDP by 22 per cent and geographical area by 79% and not only does it boost trade but also expands the labour market and strengthens people-to-people ties thereby enabling East Africans to harness the comparative strength of each member state for the benefit of all.
The EAC Secretariat is currently working with DRC on a Roadmap to join all EAC programmes and activities in line with the four pillars of regional integration and thus for the full integration of DRC into the Community.