Suspicion clouds dawn of East Africa’s common market

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Elizabeth Kinyanjui stands on the Kenyan side of the border with Tanzania and points to a no man’s land full of parked trucks and cars. The Kenyan businesswoman accuses the people on the other side of holding up people and goods, frustrating the goals of an east African common market embracing Kenya, Uganda, Tanzania, Rwanda and Burundi, in effect from today.

“When you look at Uganda, Rwanda and Burundi, at least for a Kenyan, there is no threat. But when you go to Tanzania, they sort of discriminate,” she says. “I don’t know whether it’s being afraid or they are not competitive enough, so they feel we are a threat … It’s a good idea but the countries are not on the same level.”

Regional leaders revived the East African Community (EAC) in the 1990s after it collapsed in 1977 amid economic and political disagreements between its founder members, Tanzania, Uganda and Kenya. On the Tanzanian side of Namanga, a busy border town which lies under a range of hills three hours’ drive from Nairobi, there are echoes of the disagreements of the 1970s among the people.
“It seems Tanzania is going to be the dumping ground because if Tanzania does not have enough industries, then countries like Kenya will bring their industries and all sorts of goods here,” said trader Said Ali, standing outside a small shop full of goods made in Kenya.

Busia and Malaba, along western Kenya’s border with Uganda are the other two busy border crossings in the region. Whereas Kenya exports plenty of finished goods like batteries, food and detergents through Namanga, Tanzania exports timber and other farm produce into Kenya.

Chris Abongo, a lecturer at the Institute of Diplomacy at the University of Nairobi, said sentiments like those expressed by Ali are caused by a lack of clear information about the process of integration. “It doesn’t mean that come Thursday the borders will collapse, like switching off a light bulb,” he told Reuters. He said the benefits of regional integration outweigh people’s fears about it. “Had we not broken up in 1977, we would be many miles ahead by now,” he said.

Asked if there was a risk that disgruntled voters in a country might turn against a government that is perceived to be moving too fast towards integration, Abongo said that was a possibility. “We can’t rule it out, but there isn’t enough political consciousness leading to agitation, so it may not amount to that,” he said.

To Vimal Shah, a Kenyan industrialist who invested $10 million in 2008 to expand his production capacity ahead of the inauguration of the new market, economic progress across the region is likely to trump any political upheaval. “That risk always exists and that could happen but I guess these economies have grown to such an extent that even if there is political upheaval it will not reverse the EAC,” Shah said.

Kenya’s growth averaged 5.5 percent in the half decade leading to its bloody post-election crisis in early 2008, while Tanzania and Uganda managed growth rates of above 5 percent last year despite the global downturn. “At this time when the world is in recession, and other areas are seeing negative growth, east Africa is a serious growth area,” Shah said. Some in the Ugandan capital, Kampala, did not share Shah’s optimism.
“People are not prepared because the launch of the East African common market was not preceded by adequate sensitisation,” said Issa Sekito, spokesman for the Kampala Traders Association. “We don’t expect much in the way of a day-to-today impact because we are not anywhere near the sort of conditions that would make us ready to benefit,” Sekito added.

Kenyan firms, which are better established by virtue of being part of the region’s most advanced economy, are widely expected to put pressure on companies elsewhere in the region. “Competition is healthy and normal. What Ugandan businesses and manufacturers need to do is maintain quality standards, so quality assurance is key for us to hold our own against new competitive pressure,” said Ssebagala Kigozi, executive director of the Uganda Manufacturers Association.



But Uganda does have one ace up its sleeve. It expects to start commercial production of oil soon — a first in a bloc that mainly relies on agriculture.