Recovery beckons as East African leaders meets in Arusha

Arusha. The East African leaders are meeting here today to take stock of trade challenges amid signs of recovery.

They will specifically assess the implementation of a protocol enforced 12 years ago but not entirely successful.

The East African Community (EAC) Common Market Protocol envisages free movement of goods, persons, labour, services and capital.

The agreement also carries the Right of Establishment and Residence,a segment often contested by some partner states.

The Summit of the EAC Heads of State is taking place with visible signs of recovery of the regional economies from Covid-19.

Recently the African Development Bank (AfDB) projected the region will recover at an average of 4.9 percent this year.

However, the figures meant little for the business leaders and the EAC officials who have been meeting here since Wednesday.

Trade barriers and other hurdles continue to reign large in the region which recently admitted the resource-rich DR Congo.

Business experts say there were more trade challenges facing the EAC than before the protocol was crafted, many of them non-tariff.

Even hours before the EA presidents started their High Level Retreat at 2 pm yesterday, the company CEOs were still meeting to hammer out their concerns.

“We should not create barriers.Let’s maximise on what is in the EAC,” stressed the CEO of the East African Business Council (EABC) John Bosco Kalisa.

He said at a breakfast meeting of company CEOs that 12 years down the line, the Common Market Protocol has not achieved much.

“The discriminatory barriers are still there,” he said, citing double taxation of goods traded within the region that has not been fully addressed.

Multiple business barriers are blamed for the low intra-EAC trade now standing at only 20 percent.

However, Mr Kalisa implored the EA countries to avoid blame game and instead collaborate in addressing the hurdles.

The combined Gross Domestic Product (GDP) for the seven nation EAC is currently estimated to be $ 280 billion.

This is after the recent entry of the giant DR Congo. Other member states are Tanzania, Uganda, Kenya, Burundi, Rwanda and South Sudan.

Trade barriers and stagnant growth of intra-regional trade withstanding, the summit is taking place without any contention that the region has withered its worst storms.

During the height of Covid-19, the East African bloc posted only a 0.4 percent growth in 2020, rising to 4.1 percent last year.

The assessment by the Abidjan-based pan African bank, however, did not cover the giant DRC which joined the bloc in March.

The rapid economic recovery for the region has been attributed to Covid-19 containment measures and control in public spending.

Others are improved performance of the agricultural sector and the EAC’s shift toward a more service-oriented economy.

The report projects “full recovery” from pandemic-related slump from next year (2023) after the recovery of the global economy.

That will have to go alongside rising commodity prices and increased roll-out of the vaccines and stabilizing of the public debts.

Seven months down the line, signs of recovery can be seen as projected in some member countries of the bloc like Tanzania.

Mr Kalisa, who is an expert in international trade,said although it is still too early to judge the recovery, statistics do not lie.

He cited the Quarterly Report of the Bank of Tanzania (BoT) 2022 indicated Tanzania’s growth was expected to be around 4.5 to 5.5 percent.

Projections by the central bank show that the growth can reach six percent over the medium term as exports and domestic demand recover.

Tanzania’s GDP growth is projected to range between five to 5.6 percent during the period largely due to improved performance of tourism.

In Rwanda,the growth is projected at nine to 10 percent, according to the country’s central bank report for the first quarter of 2022.

In the same vein, the tiny country’s GDP will grow between 6.9 to 7.9 percent for 2022 and 2023.

Rwanda’s rapid recovery is attributed to picking up in external demand and the private sector support through the SMEs.

Today’s summit will be the first to be attended by the EAC Heads of State physically in three years due to Covid.19.

The last such one took place here on February 1st, 2019 and ever since at least three summits have been held virtually.

The main highlights is the handing over of the EAC Chair to President Evariste Ndayishimiye of Burundi by the current Chair President Uhuru Kenyatta of Kenya.

Before the summit, the leaders will open a 42 kilometre Arusha Bypass or commonly known here as the East Africa road that skirts the city on its western and southern fringes.