Statement by the Director General, EAC Directorate of Customs and trade, Mr. Peter Kiguta 

The end of the transitional period in December last year was one of the most important landmarks of EAC integration process.



The transitional period of five years from 1st January 2005 to 31st December 2009, saw the establishment of a Free Trade Area among the member countries and a single Customs territory.

The end of the transitional period in December last year was one of the most important landmarks of EAC integration process. The successful elimination of internal tariffs among Partner States was a show of commitment by the people of East Africa to the objectives of the community.

Under the fully fledged Customs Union, goods manufactured in one partner State shall move to another Partner State without any import duties. Goods imported into the Customs Union shall, once modalities for collection and accounting for Customs Revenue are worked out, move freely from one Partner State to another once they enter the Customs Union.

However, like any other new undertaking, this may not be working perfectly right now. However, we are now engaged in carrying out activities aimed at thrashing out some of the sticking challenges, as stipulated in the Roadmap adopted by the Council during its meeting in November 2009.

The new phase has a number of implications on the business landscape of the region for both the private and public sector. At the outset, goods will circulate more freely in the Customs Union than ever before. Indeed, with the implementation of the Common Market protocol, it is expected that there will be free movement of persons and capital.  

Partner States administrations are also expected to selfishly guard their commitments to the Customs Union and to refrain from activities that are protectionist, such as imposing taxes and levies of equivalent effect to tariffs. 

In order to encourage trade, Governments are urged to liberalize public procurement procedures to support intra regional trade. To the greatest extent possible, Governments should endeavor to purchase goods manufactured within the Customs Union.

Although intra regional trade has grown over the years, there is still a lot of room for further growth. For instance, intra-regional trade to total volume of trade in EAC is merely 13%. This is very low compared to Europe at 60% and Asia at 40%. The key to unlocking this potential lies with the private sector. The sector shall do this by:

Taking advantage of new market opportunities created by the Customs Union

 

Reviewing their strategies and structure to take a regional approach

Adopting best practices so as to compete effectively against imported goods

Pursuing expansion of markets rather than lobbying for territorial protection

Embracing and owning the Customs Union.