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Kenyan manufacturers still cannot export their merchandise to the region without hurdles even in the wake of a fully fledged Customs Union.
Most products manufactured in Kenya for instance are still taxed by customs officials at border crossing points in total disregard of the principle of free trade as encrypted in the customs union.
Asked about this anomaly, the East African Community (EAC) Deputy Secretary General in-charge of Integration and Political Federation Mrs Beatrice Kilaso admitted that the secretariat lacked the necessary capacity to implement the requirements of the customs union. She said it depended on the political will of individual countries to ease trade hurdles among them, non-tariff barriers for the region to realise free flow of trade.
“We realise that the customs union is dogged by a number of key challenges. As a secretariat however, we do not have the capacity to enforce the free trade policy. It all depends on the goodwill of the governments involved,” said Mrs Kilaso.
A spot check at the boarder point of Namanga into Tanzania reveals a backlog of trucks carrying exports from Kenya to Tanzania which have not been cleared due to the impasse in regard to taxation. Among them were new trucks assembled in Kenya by leading car maker General Motors East Africa meant for export to Tanzania. They were however restricted entry into the country by defiant customs officials who instated on a 25 percent tax, in total ignorance of the zero taxation policy.
“Sometimes we have to spend even a week negotiating on various taxes and levies with the Tanzanian customs officials. They always insist on a 25 percent levy while it was made clear that under the customs union, we are not supposed to pay a cent,” said Mr Michael Odongo the driver of one of the GM East Africa trucks.
The situation could derail the soon to be implemented EAC Common Market Protocol that has already been assented to by the five regional heads of state. This is supposed to come into force on July 1 this year. All indications however point reluctance to accept the principle of free trade by a section on the member countries.
As a way forward, Mrs Kilaso suggested that the secretariat be given the powers to enforce all the resolutions of the EAC summit. She said this should be modeled along the lines of the European Commission (EC) which has been successfully empowered to enforce resolutions of the European Union (EU). “We need to be given the political mandate to enforce these policies on the regional governments instead of relying purely on goodwill that sometimes tends to drag the whole process of integration,” she said. She said the non tariff issues being levied by some member countries was an issue on serious concern to the secretariat which must be handled with utmost caution.
The signing of the EAC common market protocol on November 20 last year marked the second phase of regional integration with the trading bloc also marking ten years since it was revamped. The first stage was the customs union.
The EAC is expected to develop into a monetary Union by 2012 which means that the region will have a common currency just like the Euro of the European Union (EU). This will however be another hurdle to cross given the huge disparity in the value of currency of the region countries.
The integration process is expected to culminate into a political federation with the five countries having one centre of political power. Each country will be represented by a head of state. This development will be interesting to watch especially in light the fact that countries cannot agree on free movement of goods and services under the customs union.
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