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International community should back efforts in East Africa to bring together the economies of 5 states.
BUNGOMA, Kenya — Travelers crossing from Kenya to Uganda by road face a daunting line of trucks and cars at the border post at Malaba. Kenyan businessman who want to do business in Tanzania, Rwanda and Uganda must contend with buying goods and services in four different currencies with fluctuating exchange rates.
There is widespread agreement among businesspeople in East Africa that regional integration would lower the cost of doing business. But until recently, there was limited political momentum behind implementation. Though it has largely been ignored outside the continent, East Africa is making serious strides toward unification.
Under the East African Community, the five countries of East Africa — Kenya, Uganda, Rwanda, Tanzania and Burundi — have officially formed a free trade area and a customs union. A common market, the next step on the route to full economic integration, is set for establishment this year; it will allow the migration of businesses and people across borders. The bloc plans to move to a common currency, the East African shilling, by 2015.
East Africans are already benefiting from the move toward integration. The clearing of goods for regional traders at ports in Kenya and Tanzania has been expedited through online processing. Tanzania has removed restrictions on the flow of capital outside its borders, so that Tanzanians can invest outside the country.
Some improvements have been led not by governments, but by the private sector. Seacom International launched its undersea fiberoptic cable, which connected East Africa to high-speed internet, in July 2009. Kenyan universities are opening branches in Rwanda, and public relations firms are expanding to cater to regional companies. Nakumatt, the Kenyan supermarket chain, is opening eight additional branches in Rwanda. Public- and private-sector efforts toward integration are monitored by business newspaper The East African in its weekly “Integration Tracker.”
There will be challenges along the way to unification, of course. Rwanda plans to move from being a French-speaking country to an English-speaking one, but this transition will take years as English is only being taught in school starting this year. Tanzanians worry that Kenya’s stronger economy will dominate the bloc. Infrastructure in all five countries is lacking, and will take years, if not decades, to improve.
The biggest immediate challenge, however, is the lack of support for regional integration from international donors. What is strange about this is how much rhetoric these same donors have devoted to praising regional integration in the West.