Regional CEOs see growth in protocol

• The 120 million-plus population seen as potential customers of EAC companies

Regional CEOs believe a crucial window of opportunity has opened with the signing of the East Africa Community (EAC) Protocol in Arusha on Friday. The move is widely expected to spur economic growth.

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President Kibaki of Kenya, with presidents Jakaya Kikwete of Tanzania, Paul Kagame of Rwanda, Yoweri Museveni of Uganda and Pierre Nkurunziza of Burundi finally signed the protocol that had been under negotiation since April 2008 that ended in September.

It is hoped that the common market will accelerate the economic growth and development of partner states through the realisation of the free movement of goods, persons, labour, services and capital.

Under the deal which is expected to become effective July 1, 2010, partner states are obligated to guarantee free movement of persons who are citizens of other member states as well as to ensure there is not discrimination against them.

A debate bringing together top regional chief executives participating in this year’s edition of the CEO’s Most Respected Company Survey organised on Friday by regional media giant, the Nation Media Group and audit firm PricewaterhouseCoopers (PwC), agreed that the protocol’s time had come.

Patrick Bitature, a Ugandan businessman, said the signing of the protocol had actually come 10 years late for him since he has been doing business in the region since 1999.

“This opens a new era for the business community in East Africa,” he said.

The common market also provides for the right of establishment, residence, free movement of services and capital within the region.

Speed up

It is also expected to speed up integration and inject new energy for the economic development of landlocked countries such as Rwanda and Burundi.

Despite the positive outlook, some professionals from Rwanda have expressed concern over the harmonisation of tariffs, in which they say Rwanda will be at a disadvantage.

Juliana Kisimbi, an investment officer at the Embassy of Rwanda in Nairobi, said when the region’s trade tariffs are harmonised, Rwanda will be at a disadvantage given that its infrastructure is not fully developed.

But one analyst said Rwanda will be a major beneficiary as most of the taxes levied on the transport of her goods from Kenya will be scrapped or set at the minimal.

Philip Kinisu, a partner at PwC Kenya, said the EAC’s 120 million population, equal to that of Nigeria, affords numerous opportunities.

“I see opportunities for industries and companies to spring up and grow,” he said.