EABC NEWS FLASH - NOVEMBER 2004

In this issue:

KENYA'S MINISTER LAUDS EABC LOBBY EFFORTS, URGES IT ON

A meeting that was expected to shed light into the status of ratification of the protocol for East African Community Customs Union by Kenya, turned out to be a rare score for EABC when the Minister for East Africa and Regional Cooperation, Mr. John Koech, hailed EABC for its results-oriented lobby activities, which he said kept the political leadership of the three EAC-partner states on their toes.

“We are happy with the role EABC is playing in the integration process,” Mr. Koech told a delegation of EABC officials who had paid him a courtesy call on November 23, 2004 in Nairobi. “The more you push us, the faster we move. What we need to do is join forces.”

The delegation was led by EABC Chairman, Mr. Hirji Shah, and included six members of the EABC Executive Committee and Chief Executives of EABC member organisations. They were; Mr. Keli Kiili of BAT, Mr. Arun Devani of Kenya Association of Manufacturers, Mr. Kaushik Shah of Mabati Rolling Mills, Mr. Tom Mshindi of The Standard Group, Mr. Vimal Shah of Bidco Oil Refineries and Mr. Gayling May of The Eastern Africa Association.

To EABC, this was a timely morale-booster, coming three days before the 6 th Summit of the Heads of States Meeting, which was held at the EAC Headquarters in Arusha. At the Summit, president Kibaki of Kenya, Yoweri Museveni of Uganda and Benjamin Mkapa of Tanzania, reiterated that the operations of the EAC Customs Union would commence in January 1, 2005, and agreed to convene an extra ordinary summit in March 2005 to discuss the report of the Committee of Fast Tracking East Africa Federation with a view to giving direction and the way forward.

“We want to assure you that Kenya will ratify the protocol in time for the implementation in January, 2005,” said Mr. Koech.

The delay by Kenya to ratify the EAC CU protocol, especially given that the other two sister states had already ratified the protocol, was one of the three key issues contained in a memorandum presented by the EABC to Kenya's minister for East African and Regional Cooperation, Mr. John Koech. The other two were the application by EABC to become an institution of EAC and issues contained in the memorandum that had earlier on been presented to the Fast Tracking Committee of Fast Tracking East Africa Federation.

“The people who benefit most from the negotiations are the business people,” said Mr. Shah. “We want to be party to discussions at the regional level to help move things,”

Mr. Koech promised to act on the issues and asked the two sides to meet again after the Summit to concretize the action plan. Please see memorandum.

JANUARY 2010 DATE SET FOR EA FEDERATION

The three EAC partner-states are to coalesce into a Political Federation in January 2010, with a Federal president and a Cabinet.

In a landmark decision reached at the end of the 6 th Summit of the Heads of States Meeting, held at the EAC Headquarters in Arusha on November 26, 2004, president Kibaki of Kenya, Mr. Yoweri Museveni of Uganda and Mr. Benjamin Mkapa of Tanzania also agreed that the Customs Union should come into force on January 1, 2005. The bulk of EABC's recommendations to the Committee on Fast Tracking East Africa Federation were incorporated into the decisions that were finally arrived at.

The three heads of state also agreed that the basic minimum requirements for the Common Market and Monetary Union necessary for the realization of a Federation should be compressed and should run in parallel within the five-year period from January 1, 2005. President Domitiene Ndayizez of the Republic of Burundi and the Prime Minister of the Republic of Rwanda at the invitation of the Chairman of the Summit, President Benjamin Mkapa, also attended the summit.

Negotiations on the Protocol on Free movement of persons, labour and services and right of establishment and residence is scheduled to commence in January 2005 and is expected to be concluded by June 2006 while deliberations on the Protocol on Establishment of a Common Market is slated to start in January 2005 with the conclusion expected to come later in December 2007.

The Summit also fixed July 2005, as the date when entry permits and work permits for citizens of the three states should be standardized.

The heads of state also agreed to set up a constitutional Commission is to be appointed in July 2005 to make a draft of a new federal constitution, which should be ready by December 2007.

By December, 2006, there should be East African Identity cards for all citizens of the three East African countries.

In 2008, a constitutional forum of representatives from Parliaments of the Partner States and members of the East African Legislative Assembly should debate and approve the constitution.

The three states will also have a single currency by December 2009.

Please see the Joint Communiqué issued at the end of the Summit Meeting and Speech of the Chairman of the EAC Committee on Fast Tracking East Africa Federation, Mr. Amos Wako, by clicking on the links:

Speech by the Chairman of the Fast tracking Committee
Communique issues at the end of Summit Meeting

EA CUSTOMS MANAGEMENT BILL TO BE ENACTED BY DECEMBER 16

THE East Customs Management is to be enacted by December 16, 2004. The bill, a critical document required for the implementation phase of the EAC Customs Union, was presented to the region's law making body, East African Legislative Assembly, and went through the first reading on December 1, 2004.

The Committee on Trade is scheduled to start discussing the bill from December 6- 10, 2004. To make the document all-inclusive, the Committee is inviting views and opinions from interest groups in the three EAC partner-states, before the plenary sit on December 14, to wrap-up the document.

CUSTOMS UNION - BAT POSITIONS ITSELF TO BENEFIT FROM ENLARGED MARKET

BRITISH American Tobacco (BAT) has taken a definitive step to position itself in the regional market in readiness for the customs union regime, slated for launch in January 2005. The cigarette manufacturer, which in January 2004, rationalised its organizational structure in along the lines of East African Community, was in Arusha on November 16, 2004, to gain first hand knowledge of the operations of EAC and EABC at the regional level.

The team met with EAC and EABC officials at the EAC Headquarters.

At the heart of this move is what the BAT Managing Director and General Manager for East African Community, Mr. Simon Welford believes is a strategy that will enable the organization work closely with EABC to reap maximum benefits from the wider EAC market. “We are investing heavily in tobacco growing and processing in East Africa,” said Mr. Welford. “We have contracted 90,000 farmers in the region and we want to continue growing BAT to fit within the EAC integration.”

The Chairman of BAT Mr. Evanson Mwaniki said the three EAC partner-states had shown a great deal of goodwill towards the integration process and as such it was important that the private sector played their part. “We at the BAT will be your crusaders,” he said.

The EAC Deputy Secretary General in Charge of Projects and Programmes, Mr. Kipyego Cheluget, lauded BAT's contribution in the integration process saying it was among the most active partners of EAC. “We are grateful especially for the support we are receiving from BAT in sponsoring Jua Kali/Nguvu Kazi Exhibitions. When we came up essay competition, BAT again was at hand to assist,” he said.

The Executive Director of EABC, Mr. Elly Manjale said EABC had launched a study on Non-Tariff Barriers to identify and institute a mechanism for monitoring them with a view to eliminating them. “We want to ensure that the Customs Union once it comes to force will be truly operational for the benefit of the business community,” said Mr. Manjale. “We want to appeal to the business community to keep us posted of any non-tariff barriers that they encounter in the process of plying their trade.”

On the movement of people, he said, EABC was working through employers' associations to prod EAC partners to actualise the protocol.

Among the projects lined up in the short to medium-term by EAC are the linking of the three sister states with road and railway networks, the air routes and power. And to lend credence to the decision to fast track East Africa Community Federation, the three countries are also working on a common foreign and defense policy, said Mr. Chelluget.

30 FIRMS TO ATTEND KAMPALA EXPORT WORKSHOP

THE East African Business Council, in collaboration with the International Council of Swedish Industry and Uganda Export Promotion Board have organised a workshop to discuss ways of how exporters from Uganda can benefit more from the European market.

The event dubbed Export Competence Development Workshop , scheduled to run for two days – from December 7-8, 2004 – will be held in Hotel Africana, Kampala, and is expected to attract professionals in specific businesses that have the capacity to exploit the vast European market. A total of 30 firms are expected to attend.

“The workshop will be a forum for discussing issues of relevance to exports to the European Union in general and to Sweden in particular,” said the Executive Director of EABC, Mr. Elly Manjale. “It will be highly participatory and will be conducted by experienced experts within the different fields. Practical training and case studies as well as comprehensive background information on trade and market preferences which will be made available, will provide an excellent opportunity for firms to develop their understanding of the European market.”

It is being held under the aegis of Gateway East Africa, a networking project launched in January 2004 to create business links between firms in East Africa and those in Sweden.

The workshop has been structured into two sessions: The first session will be held on Tuesday, December 7, 2004, and will introduce and elaborate on the issues of opportunities, challenges, demands and requirements that need to be met by firms targeting the European market. The session will also attempt to evolve ways through which the challenges can be overcome.

The second session will focus on the role of export firms, areas of comparative advantage and what valued-added activities the firms could introduce in their value chains.

COMESA TO FOCUS ON COMPETITION ISSUES

Trade ministers from the 20 nations that comprise COMESA trading bloc have agreed to focus on opening protected markets and eliminating monopolies. EAC is a fast track of Comesa and both Uganda and Kenya are also members of Comesa.

A meeting held in Cairo, Egypt, on November 23, 2004 resolved that the recommendations regarding competition policies and steps would be debated in Zambia in December.

"Draft legislation guaranteeing free competition and outlawing monopolies will be discussed at the next COMESA summit in Kigali," said Egyptian Foreign Trade Minister Rashid Mohammed.

COMESA boasts a population of 385 million, a combined gross domestic product of US$388 billion and annual trade of about US60 billion. Its

members include Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe, but notably excludes regional economic powerhouse South Africa.

Late last month, it released trade figures, which showed intra-Comesa trade reached US5.3bn in 2003, and is expected to grow by 20 percent in 2004. COMESA Secretary General, Mr. Erastus Mwencha, said the organisation was working hard at removing barriers to trade and investment in the region. The creation of the Customs Union, he said, was an opportunity to promote economic development by making trade free, less distorted and fairer.