Economic bloc poised to be Africa’s largest
Thursday marks a milestone as the East African Community graduates into a common market.
With a combined GDP of Sh5.6 trillion ($70 billion) and estimated population of 120 million, the EAC is clearly set to become Africa’s most advanced economic bloc.
That the five countries have agreed to sign up is by far the clearest indication that the political will to see the common market take off is strong.
Sceptics will, of course, downplay the impact of the event with the criticism that the countries have announced a common market before accomplishing the free movement of people across the region.
Indeed, and despite the pomp and fanfare, the common market being proclaimed on Thursday does not guarantee some freedoms. Apart from Rwanda, no member state has lifted work permit regulations.
The parties have not agreed on the rights of establishment which should allow citizens of the region to set up businesses without restriction.
The parties also did not agree on land issues. Full liberalisation of capital controls will only be implemented in phases after Thursday. Which is why the impact of the coming into being of the common market protocol will not come with a bang.
Customs union
In terms of impact on the ground, what is happening on Thursday is not going to be comparable to what happened when the customs union took effect in 2005.
The day a customs union was unveiled, member states had to charge the same level of duties and apply common rules of origin and tariffs on inter trade were zero-rated.
Still, the symbolism of the event remains a powerful indication that the political leadership of the region is prepared to move regional integration beyond elimination of tariffs.
