A year before the five East African Community (EAC) members amalgamate into a single trading bloc with a common currency, the Kenyan business community wants the five governments to determine how the regional body will relate to Comesa and SADC blocs, the Kenya Association of Manufacturers (KAM) voiced the concern in a new report made available to PANA here Friday.
The report, based on a memorandum presented to members of the East African Legislative Assembly (EALA) who toured the Kenyan capital early this month, said the five EAC governments – Kenya, Uganda, Tanzania, Rwanda and Burundi – were under obligation to define how they would relate with the Common Market for Eastern and Southern Africa (Comesa) and Southern African Development Community (SADC) blocs.
“The EAC protocol provides that on 31 December, 2009, community member-states belonging to Comesa and/or SADC must pull out as EAC enters a full customs union,” the KAM report said.
It said multiple memberships to other trading blocs were a potential source of confusion and would seriously affect loyalty to EAC.
While Kenya, Uganda, Rwanda and Burundi are members of Comesa, which has a market potential of 400 million people, Tanzania on the other hand belongs to the SADC, having quit Comesa in 2000.
KAM noted, “Considering that Comesa had already began to negotiate a common external tariff structure and a customs union to be effected by the end of this year, there is concern that if Comesa becomes a full customs union before EAC, the latter is likely to be insignificant in market size.”
“This makes it imperative to make political decisions that can mid-wife a full EAC Customs Union without compromising the Comesa Market,” an EALA member Gervas Akhaabi, was quoted as saying in support of KAM.
“There is need for a seamless negotiation that expands our market outward from Kenya to EAC and Comesa customs unions without any disruption so that we can use economies of scope and scale,” Mr. Shah said.
According to the report, it was agreed that follow up meetings would be held soon to inform both the EALA and national legislatures on the prospects of local industries in the eight-year-old EAC.
Kenyan EALA legislators who met KAM officials in last week besides Mr. Akhaabi were Catherine Kimura , Safina Tsungu, Augutine Lotodo, Clarkson Otieno Karan and Sarah Godana.