Nairobi: The inaugural EAC Secretary General's Chief Executive Officers' (CEOs) Forum was held today at a breakfast meeting at the Nairobi Serena Hotel in Kenya. The EAC Secretary General Amb. Dr. Richard Sezibera, who officiated at the function, challenged the business community to take an active role in the formulation and harmonization of regional business policies and regimes rather than leaving the process to government bureaucrats and technocrats.
The SG's CEO Forum, attended by over 80 CEOs of private businesses and government agencies in Kenya and supported and facilitated by the East African Business Council and Trademark East Africa, provided a platform for the Secretary General and CEOs of regional businesses in the Community to discuss key challenges impacting the private sector in the context of regional integration and to chart a way forward on resolving the identified bottlenecks.
The Secretary General urged the business community to get more involved in finding solutions to some of bottlenecks hindering doing business in the region, saying “please push us on this agenda, keep the voice up and take part in EAC meetings so that we move forward the integration agenda together”.
Amb. Sezibera assured the CEOs that he would endeavor to invite them to attend some of the policy formulation meetings especially those that touch on doing business in the Community whenever they are convened.
The Secretary General informed his guests that the Council of Ministers had already considered a framework for structured dialogue between the EAC, private sector organizations, civil society and other interest groups within the requirements of the Treaty.
“This Framework will be dynamic and capable of adapting to key principles forming the charter of good practice for public-private dialogues. We are also about to conclude a Public-Private Partnership Framework for the EAC, which will also go a long way in enhancing private sector participation in public enterprises,” asserted Amb. Sezibera.
The Secretary General was gratified to note that the EAC trade and investments had registered average annual growth rates of 20-30% for all the EAC Partner States and the international trade and foreign direct investments continued to grow accumulating to over 60% for the years 2008-2011. EAC intra-region trade also rose to 23% of total value of exports, the highest of all the African regional economic communities.
He said the benefits of regional integration were cemented, as the EAC economies were able to overcome the shocks of the global economy and held their position among the fastest growing regions of the world.
“In 2011, EAC countries sustained on average 5% GDP growth against the world average of 3%. All performance indicators depicted significant growth trends, including Foreign Direct Investment inflows, which increased from USD 683 million in 2005 to USD 1.7 billion in 2011,” noted Amb. Sezibera.
He said the ratification, launch and implementation of the Common Market Protocol in 2010 triggered a new momentum in the process towards the establishment of the East African Monetary Union and the Political Federation of the East African States.
The Secretary General noted that attainment of the Monetary Union and a single currency, on the basis of transparency, equitable development, fiscal discipline and prudent management of macroeconomic factors; and taking advantage of the economies of scale, would further strengthen the operations of the EAC Common Market.
He noted that the proposed establishment of a Grand Free Trade Area (GFTA) of the three major African regional economic communities (EAC-COMESA-SADC) comprising 28 African countries, with a combined population of 527 million, GDP of USD 624 billion under the Tripartite arrangement will further boost EAC's market advantage and strength.
At the same occasion, the Chairman of Kenya Association of Manufacturers and Director of EABC, Mr. Jaswinder Bedi disclosed that Kenyan exports to other Partner States increased from Kshs. 53,049 Million in 2006 to Kshs. 101,312 Million in 2010 while at the same time imports from EAC region increased from Kshs. 6,065 Million in 2006 to kshs. 20,351 Million in 2012.
He said intra-EAC Trade went up from 10.5% in 2007 to 12.2 in 2009 and dropped slightly to 11.1% in 2010. EAC trade with the rest of the world accounts for 88.9%. He noted that within African countries, more exports go to EAC region than the rest of COMESA and Africa and that Kenya's export to EAC accounted for 53.6% in 2010.
He said Kenya imports more goods from the rest of Africa than from EAC Partner States and the rest of COMESA member countries and imports from EAC accounted for 17.7% in 2010.
The Chairman of Kenya Association of Manufacturers identified various priority interventions necessary for the implementation of a fully fledged Customs Union namely; formation of Single Customs Territory which means coming up with common legal framework, common systems and procedures, common institutional framework and non application of rules of origin.
It will further entail shifting inter Partner States customs border controls to outer borders of EAC Partner States, collection of taxes at the first point of entry into the EAC region, free circulation of goods, harmonized domestic tax regime and formation of a strong EAC body to administer taxes matters in the EAC.
Secondly the need to apply the EAC Common External Tariff uniformly by all Partner States to ensure level playing field for all players in the region. Thirdly is harmonization of ICT systems for effective timely exchange and delivery of data amongst the Partner States. Fourth is the need for legal framework to force the removal of Non Trade Barriers (NTBs) and fifth is the issue of standardization, quality assurance, metrology and testing framework.
He noted that although the EAC Treaty recognizes the importance of standards and quality assurance in facilitating trade, standards related issues remain a key impediment to doing business across the region in spite of the presence of an SQMT Act. He observed that reduction of standards related barriers to trade as well as the mutual recognition of standards as provided for in Article 24 of SQMT Act were key.
Mr. Rajesh Shar a partner at the PricewaterhouseCoopers Kenya noted that harmonization of the domestic tax regimes were critical in all the four stages of the EAC integration and added that harmonization was necessary to facilitate the free movement of goods, services, labor and capital, while Mr. Gilbert Langat, the CEO of Kenya Shippers Council called for a comprehensive and integrated approach towards reducing the complexity and cost of trade transactions and ensuring trade related activities take place in an efficient, transparent and predictable manner, based on internationally acceptable standards within the region.
He recommended among others, a single harmonized manifests-carnets that are used by country of origin and at border posts, harmonized transit bond and licensing regimes, and that transit should be looked at as a nationally harmonized procedure, rather than a transnational procedure initiated and discharged by a customs agency within a customs territory.
Mr. Langat also called for the Customs authorities to have an information system that is real-time and harmonized, using single entry documents across the region.
Comprising five national forums and one regional forum annually, the SG's CEO Forum will be hosted by the East African Community Secretariat in partnership with East African Business Council (EABC) and TradeMark East Africa (TMEA), based on the three organizations' shared objectives of fostering the interests of the business community in the integration process.
Today's event kick started the activities of the SG's CEO Forum and it is hoped that similar events will be held in Dar es Salaam, Tanzania; Bujumbura, Burundi; Kampala, Uganda; Kigali, Rwanda; and will culminate in the regional forum around November 2012 before the EAC Heads of State Summit.