East Africa's heads of state met in Arusha on Friday as a dark
cloud of unresolved longstanding trade spats, tariff and non-tariff
barriers and crippling financial challenges hang over the bloc.
For
Kenya and Tanzania, talks on trade in sugar and tobacco hit a dead end
after the EAC Secretariat was accused of failing to resolve the
outstanding issue over the past seven months.
Rwanda
has recently experienced simmering diplomatic tensions with Burundi and
Uganda over long-running security concerns that threaten to spin out of
control.
Kenya’s President Uhuru Kenyatta and his
Tanzanian counterpart John Magufuli were expected to revisit the
persistent trade spats between their bureaucrats since they directed
that the differences be ironed out at the last summit in Kampala in
February last year, with little or no progress achieved so far.
Uganda’s
President Yoweri Museveni handed over the chairmanship to Rwanda’s Paul
Kagame and they are expected to ease tensions between the two
countries, amid incidents that have only exacerbated their differences.
One such incident was the deportation of Rwandan national Annie Tabura, a
senior executive at MTN, on charges of compromising the country’s
national security.
Integration
At the Council of Ministers meeting which concluded on Thursday,
it emerged that the region only managed to implement 16 out of the 78
directives issued last year, pointing to a creeping lethargy in
executing integration programmes.
Nairobi and Dar es
Salaam are still engaged in a spat over Kenyan confectionery to which
Tanzania has denied duty-free access into its market, over a dispute on
rules of origin.
“During the meeting of November 16,
2018, Tanzania expressed reservations on the findings of the
verification mission and further submitted that the duty-free sugar
imported by Kenya in August 2017 still has an impact on locally
manufactured goods and therefore all confectionery transferred from
Kenya to Tanzania shall be subjected to external tariffs,” notes a
report by the Council of Ministers.
Nairobi now wants
Dar es Salaam to accord Community Tariff Treatment to confectionery from
Kenya as per the findings of the verification report without further
hindrance or condition. Kenya has also rejected attempts by Dar es
Salaam to hold a second verification.
In May 2018, the
EAC also directed Uganda and Tanzania to undertake a verification
mission on sugar by June 24 ,2018. In July, the Secretariat communicated
the findings of the verification, and requested partner states to
accord Community preferential treatment to confectioneries, provided
they meet origin criteria.
This year’s meeting also
revisited the perennial question of budget funding, with some members
taken to task over their commitment to submitting their contributions to
the Secretariat.
Poor funding has seen various EAC
organs, including the legislative assembly, halt their activities. In
November last year, it emerged that Kenya, Rwanda and Uganda have been
sustaining the operations of the Secretariat by submitting more than
half the contributions in the current financial year.
The
regional countries were given up to the end of last year to pay up
their outstanding budgetary contributions for the financial year
2017/2018. So far, it is only Kenya, Tanzania and Rwanda which have made
this full payment, with South Sudan and Burundi still having more than
$12 million of their expected remittances for 2017 budget pending.
South
Sudan still owes the EAC Secretariat $7.37 million in 2017 budgetary
contribution while Burundi’s arrears stand at $4.4 million. Uganda has
arrears of $54,495.
At the May 2018 meeting, the
regional countries were asked to disburse at least half of their
budgetary contributions for the 2018/19 financial year by end of
September, to enable the EAC organs and institutions discharge their
mandates.
From this directive, Nairobi has so far
disbursed 80 per cent or $6.68 million, while Uganda has disbursed 53
per cent or $4.46 million. The other regional countries have not met
this request, with Tanzania disbursing 26 per cent, while Kigali sent
$2.09 million. South Sudan and Burundi are yet to disburse any funds to
the secretariat.
“Uganda, Rwanda and Tanzania informed
the meeting that part of the contribution was being processed with the
view to pay in full by end of December 2018. Burundi informed the
meeting that the arrears would be fully paid before end of this year,”
the Council report said.
The Ministers are now considering sanctions against defaulters in a bid to enforce timely remission of funds.
“The
session further discussed the experience of the African Union where
reference to sanctions against member states with arrears has resulted
in improvement of the disbursements performance. There is need for fast
tracking the consideration and approval of sanctions mechanism at EAC,” a
final communique from the ministers said.
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