BML 3205 REGIONAL INTERGRATION – WBA

1) Using east Africa economic, evaluate the various stages/modes of regional integration that
it has undergone on the economic-political integration continuum.

Regional Integration is a process in which neighboring states enter into an agreement in order
to upgrade cooperation through common institutions and rules. The objectives of the agreement
could range from economic too political to environmental, although it has typically taken the
form of a political economy initiative where commercial interests are the focus for achieving
broader socio-political and security objectives, as defined by national governments. Regional
integration has been organized either via supranational institutional structures or through
intergovernmental decision-making, or a combination of both.

The enthusiasm of the EAC to facilitate trade among its members is enshrined in Article 5 (2) of
the Treaty establishing the East African Community which states that the first stage of EAC
integration will be the formation of a Customs Union, skipping the earlier stages of Preferential
Trade Area and Free Trade Area. The EAC Customs Union Protocol came into force in January
2005. The Customs Union has four major elements:

(1) The establishment of a Common External Tariff (CET);

(2) The establishment of EAC Rules of Origin (RoO) criteria, including Certificates of Origin
and Simplified Certificates of Origin;

(3) The internal elimination of tariffs for goods meeting the EAC RoO criteria

(4) The elimination of Non-Tariff Barriers (NTBs).

The primary objective of the Protocol establishing the Customs Union is to facilitate inter and
intra-regional trade in goods. The Treaty establishing the East African Community then names as
subsequent stages of EAC integration the establishment of a Common Market, then a Monetary
Union and ultimately a Political Federation.

Achievements of the East African Community

The strides taken by the EAC to have a Customs Union Protocol in force and a Community Law
– the Customs Management Act — made it attractive to other countries such Rwanda and
Burundi to accede the Treaty in 2006. The latter two countries became fully fledged members of
the EAC in July 2007, and started to implement the Customs Union in 2009. The Republic of
Southern Sudan has applied to join the EAC and the process of evaluating her admission is
ongoing. Currently the EAC is recognized globally and representatives from various countries
and international organizations have submitted their credentials to the Secretary General of the
East African Community. There are other countries envying to join the regional bloc, as the
Summit of EAC Heads of State and Government have said in their 2011 Communiqué. The
region has increased both inter- and intra-regional trade, and has also witnessed an increase in
intra-EAC Foreign Direct Investments (FDI) as well as in FDI from outside. The East African
Legislative Assembly (EALA) has passed several community laws and the Council of Ministers
has established various Sectorial Councils to oversee policy issues in the regional integration
progress. There -is mutual recognition of standards marks across the region where the bureaus of
standards have developed an EAC catalogue of Standards. In pursuit of facilitating trade the
EAC has embarked on a mission to establish One Stop Border Posts that have already been
articulated within the auspices of the Community Law. Finally, the EAC Council of Ministers
has recently approved the ‘EAC Customs Valuation Manual’ – a document which provides
guidelines on how to implement and uniformly interpret EAC Customs valuation provisions
within the Community and therefore helps overcome challenges in this respect

Challenges in implementing the EAC Customs Union

Despite these progress made throughout the years, some challenges remain noteworthy when it
comes to the implementation of the EAC Customs Union.

Implementing the CET has been challenging to the Partner States. Customs valuation procedures
have been varying, resulting in different computed values for taxation. Since 2005, Uganda has
produced a list of industrial products that are exempted from the CET. A similar list of industrial
inputs is in place for Rwanda and Burundi. Moreover, the United Republic of Tanzania, as a
member of both the Southern African Development Community (SADC) and the EAC, has taken
integration commitments in both regional contexts, thereby having to implement two CET, one
being for EAC and the other for SADC. Likewise, the remaining four –members of the EAC are
also members of the Common Market for Eastern and Southern Africa (COMESA), thus facing
similar challenges as the one encountered by Tanzania in terms of multiple commitments taken
in the contexts of various integration agenda.

Rules of origin implementation has been largely successful in the region, except for a number of
challenges where disputes have arisen and verification missions were constituted to address the
problems. In the wheat industry, we have for instance observed protectionist tendencies which
have been justified using rules of origin-related arguments. Moreover, efforts in
sensitization/awareness-raising seem to have been too limited to allow relevant stakeholders
realize the opportunities they could draw from EAC integration.

Internal Tariff Elimination is an area where the EAC Partner States have scored one hundred
percent in implementation, and it is our anticipation that this achievement will be a yardstick to
influence the others.

The EAC has undergone great efforts to eliminate Non-Tariff Barriers. Similar efforts have been
undertaken at the SADC and COMESA levels, where national and regional structures to monitor
and curb NTBs are in place; and have attracted a genuine cooperation between the public and
private sectors. There are however a number of NTBs remaining in the EAC as well as in
COMESA and SADC: while some have been eliminated, others are mushrooming up.

The EAC is yet to have a Single Customs Territory despite having the protocol in place. Other
notable challenges include challenges emanating from Special Economic Zones (SEZs) and
Export Processing Zones (EPZs) regimes as well as those of Investments Promotion Authorities;
the delayed adoption of the EAC Industrialization Policy and Strategy, and the long overdue
EAC Sanitary Phytosansitary (SPS) Protocol.

2) Citing specific examples evaluate Africa’s peculiar challenges to effective regional

integration (15marks)

1. Selfishness and Parochialism of the ruling class:

Many authors were blunt to observe that majority of our leaders just pay lip services to the African
integration plan. Core among their fears is their unwillingness to mortgage their political dynasty.
Few countries on the continent seem to be prepared for the partial surrender and the polling of
sovereignty which is critical to the success of any regional integration scheme. Obviously, if the
leaders that should be at the fore front of positive movements for regional integration are not fully
out to stake all it takes for more fruitful venture, then it must be a proper calculation to say that
something is frankly wrong. This is a good case of a house divided within it, and a core issue which
must be addressed urgently. As national governments of Africa are not willing to completely
support and accommodate regional integration, they also make the integration not bearable in the
region.
2. Technological Dependency
is another monumental challenge that must be taken seriously. In this respect, African nations are
just consumers and not in any way producers of communication hardware and software. As a debt
to the shaky nature of her economy, procurement of state of the art technological devices for
production and distribution purposes remains an uphill task. On the angle of communication, the
gadgets and the technical knowhow are glaringly lacking, making it impossible for the
communication sector to be strong enough to cope with the challenging environment.
Owing to this, big and industrialized nations take serious advantage of Africans by converting her
weaknesses into their advantage. The development of the internet is another landmark achievement
that compounded the state of things in the State media government funded and government
controlled have not delivered the free democratic press the continent requires. However both the
latter two models, public and private have drawbacks. The publicly funded media require mature,
stable and accountable government to fund apolitically and without interference. Even in
established democracies, publicly funded media have not always been able to resist pressure from
the above.
Public, independent media, while probably ideal is a fragile enterprise. In the case of privately
funded media, independence can be compromised by the private or corporate interests, by pressure
from potential advertisers and by the demand of the market itself.

3. Cultural issues like Language Multiplicity

Is a peculiar attribute of the African continent? Language is an issue of identity as anything else
and in the complex reality of contemporary Africa; language identity further complicates media
design and development. Given that Africa has several distinct regions, many states, hundreds of
distinct tribal and ethnic groupings, the issue of media language and identity becomes particularly
pertinent. The greatest challenge here lies in the fact that effective information dissemination in
this setting requires dissemination using local media and different local languages.

5. High incidence of conflict and political instability

Is another serious factor. Without peace and political stability, all other efforts are militated
against. Very often notice is taken of wars; if not in Somalia, it is in Mali and other countries alike.
Military incursion on political terrains is currently an African identity, when such issues are
Raised among rival nation just like countries in the Middle East. Conflicts distort natural peace
and retards integrative development, as it places an effective check on economic and social
activities, destroying infrastructure and constituting a serious barrier on the flow of business and
investment.
6. Economic instability
It is a big obstacle for regional integration. As we refer to the poor state of economy in Africa, the
issue of debt shows itself as a case in point. South Africa has $25 billion in foreign debt; Angola
Owes about $10 billion to countries that were involved in the cold war, while Democratic Republic
of Congo $2 billion, (Jubilee, 2000). According to Minter, (2004), Mozambique owes about $56
million to foreign creditors per annum. To curtail the inconveniences of this litany, we say that
almost all African countries are owing one thing or the other and their debt service ratio is quite
precarious. Apart from the above, currency exchange rates is another issue that give an
Average mind in Africa concern. The ever increasing inflation is ridiculous and the persistent
decline of the continent’s GDP indicates real danger of economic instability. In the midst of these
uncertainties, much money is needed to initiate and sustain the integration dream.

7. Inadequate Infrastructure
Apart from the human and institutional capacity for regional cooperation and integration, an
improvement in physical infrastructure demands serious and urgent attention. Amenities such as
power, water, roads, transportation, and communication services are earnestly requesting serious
attention. Governments of African countries, non-governmental organizations
And groups need concerted efforts to ensure that infrastructural amenities receive due attention.