Comesa treaty greeted with cloud of EAC bloc challenges
Posted Tuesday, January 22 2013 at 02:00
Overcoming obstacles. The challenge Uganda has is to get people to understand this opportunity and help the private sector sustain the market.
Despite the hurdles that have denied Uganda the benefits that accrue from regional economic blocs, the year 2012 closed with a ray of hope.
After seven years of wriggling on whether Uganda was ready to compete within the Comesa Free Trade Area or not, this – Uganda becoming a Comesa FTA member – finally came to fruition when the government accepted to sign the treaty.
This was a good move for the private sector, consumers and country–because it created a bigger market of more than 400 million people.
Already the Comesa was Uganda’s leading exporting destination with a market worth $1.3 billion as of 2011 up from $795 million in 2010. Comesa FTA means that Ugandan goods and services will access a market of more than 400 million people without paying import tax.
Private Sector Foundation Uganda’s executive director, Mr Gideon Badagawa, who lauded the move however, said Uganda needs to take up the advantages of this opportunity.
“The challenge Uganda has is to get people to understand this opportunity and help the private sector sustain the market,” Mr Badagawa said, adding: “Let the private sector pay much attention to quality of the produce and standards, and increase volumes to take advantage of this opportunity.”
He further challenged the government to collaborate with the private sector to boost production while government handles the regulations, standards and research.
Fears over Comesa FTA
Some people have mixed reactions over Comesa FTA deal saying that it is likely to block the achievements earned thus far by the East African Community (EAC). However, experts say this will instead boost its operations.
In 2012, the EAC celebrated 12 years since its re-establishment when the original three member states of Kenya, Tanzania and Uganda signed the protocol in 2000 and later Rwanda and Burundi joined in 2007.
It’s this same year that East Africans were supposed to witness the signing of the Monetary Union (Common Currency) protocol in December but some thorny issues still stand in the way.
Responding to this issue, Mr Badagawa said EAC leaders are not in a hurry to endorse decisions having realized that they need to move in unison.
He said that everybody is refocusing: “We have just realised that as far as the Monetary Union is concerned, we do not know what we were talking about.”
The Secretary General also noted one of the reasons which led to the collapse of the former EAC, was a lack of participation of the civil society and the private sector.
Two years into the fully fledged Common Market which allows freedoms like that of movement; it’s unfortunate that there is still very little realised as far as the implementation of this protocol is concern.
This has been witnessed especially under the provision on free movement of labour.
Despite the EAC’s facilitation of mutual recognition agreements of professional qualifications among engineers, accountants and architects to enable them to practice anywhere in the region, free movement is not guaranteed.
The passing of a Bill for one stop border posts (OSBPs), this year is expected to lower transaction times for businesses and travelers alike by merging operations of borders.
Uganda Revenue Authority Commissioner Customs, Mr Richard Kamajugo, says a one-stop-border points ease clearing of goods and also saves time.
“We have also linked our IT systems to see that there is ease in the collection of revenues so when goods are declared at the Kenyan border we are able to see the movement in our systems and avoid smuggling,” Mr Kamajugo adds.
Last year, the EAC presidents agreed to adopt the “destination model” for collecting customs duties as part of the planned single customs territory. This means taxes on goods going to Uganda for example, would be collected at Mombasa or Dar and not Malaba or Busia, translating into faster clearance of goods and curbing tax evasion.