EAC's invisible walls: Why intra-trade remains stubbornly at 15pc?
The EAC Sectoral Council of the Ministers of Trade, Industry, Finance and Investment (SCTIFI) says the number of non-tariff barriers (NTBs) within the bloc increased from 10 in November 2024 to 48 in May 2025, reflecting the challenges member states are facing trading with one another.
This has left the intra-EAC trade stagnant at 15 percent.
NTBs have impacted trade in various goods and services, including sugar, milk, soft drinks, beer, cement, clinker, road user charges, paints and varnishes, fish, and forest and timber products, according to disclosures by the council.
Read: Ugandan traders bemoan erratic road fees on EAC trade routesThe ministers blamed the resurgence of NTBs in the region on the continued enactment of discriminatory laws and regulations by member states.
This has led to violations of the national treatment principle and the non-notification of such breaches and the partial implementation of partner states' commitments to EAC integration, including non-resolution of NTBs and the imposition of new ones, which contravenes EAC laws.
Other major causes are non-harmonisation of policies and regulations among partner states, especially fees, levies and charges and the non-timely resolution of reported NTBs.
Read: EAC is not treating us well, say Rwandan tradersThe meeting noted that of the 48 NTBs, 18 were resolved, 22 are at various stages of resolution, two were operational and were referred to the relevant committees for consideration, and that six were not bona fide.
By November 2023, 269 NTBs had been resolved, leaving only nine were outstanding.
The resurgence of NTBs raises concerns about the partner states' commitment to regional integration and the promotion of intra-EAC trade.
Domestic taxesThe EAC Secretariat says intra-EAC trade has remained low, largely due to NTBs.
EAC's total trade with the rest of the world increased by 2.37 percent to $80.6 billion in 2023 from $78.7 billion in 2022, while intra-EAC total trade grew by 13.1 percent to $12.1 billion from $10.6 billion in the same period.
However, the percentage share of intra-EAC trade to bloc's total trade was 15 percent in 2023.
NTBs have been a major hindrance to the free movement of goods as enshrined in the EAC Customs and Common Market protocols.
Ordinarily, NTBs refer to any obstacles to international trade that are not import or export duties and may take the form of import quotas, subsidies, customs delays, technical barriers, or other systems preventing or impeding trade.
According to the ministers, the number of NTBs were attributed to domestic taxes such as excise duties and other charges of equivalent effect and that a number of reported NTBs were operational related to service delivery and could be addressed through Trade Facilitation Committee rather than describing them as NTB.
The council took note of the 18 resolved NTBs and directed partner states to refrain from enacting laws that impose fees, levies and charges of equivalent effect on goods originating from the bloc and to refrain from imposing quotas on goods originating from the bloc.
It also directed the partner states to make budgetary allocation to undertake activities related to the resolution of NTBs and that the EAC Secretariat should convene and coordinate the bilateral engagements among partner states on specific NTBs as they occur in order to resolve them promptly.
Customs UnionThe council also directed partner states to treat goods from the region as transfers and refrain from enacting discriminatory laws that treat EAC originating goods as imports and that partner states should timely notify the EAC Secretariat in a timely manner of any new measures that would affect trade.
The Customs Union is the first pillar of the EAC regional integration that provides for free movement of goods and services in the region by eliminating trade barriers and fostering a competitive environment for goods produced within the region.
Under the region's revised four-band Common External Tariff (CET), which took effect on July 1, 2022, finished products imported from countries outside the bloc attract a 35 percent duty, intermediate products available in the EAC 25 percent, intermediate products not available in the region 10 percent and raw materials and capital goods attract a zero percent import duty.
Additionally, there is a list of sensitive items, such as sugar, wheat, rice and milk, which attract a duty of more than 35 percent, to protect local industries from competition.
Syndigate.info).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
10 hours ago
- Zawya
Tanzania's Vision 2050 targets $1trln GDP growth
President Samia Suluhu Hassan has launched Tanzania's development blueprint, Vision 2050, targeting to achieve upper middle-income status by harnessing land, natural resources, demographic dividend and technology. Manufacturing, digital economy, climate adaptation and youth empowerment sit at the core of the plan, and the East African nation expects to become a regional industrial hub, with a strong and competitive economy, in the next 25 years. Implementation is set to start on July 1, 2026. Tanzania aims to use the plan to grow GDP from $85.98 billion in 2025 to $1 trillion by 2050. President Samia while launching the blueprint in the capital Dodoma, said the plan is expected to equip about 70 percent of Tanzanian citizens with digital skills with over 80 percent of government services delivered online. Other key economic sectors for development envisaged for implementation are political cohesion that would promote peace, unity, and strict leadership codes to drive an inclusive economy.'We are laying the foundation stone for the future of our people since Tanzania is rich in land and natural resources. Let us go and implement this vision in action, not just in words,' President Samia said. She then directed the Law Reform Commission, in collaboration with the Attorney-General's Office, to begin drafting legal reform proposals that will facilitate effective implementation of the Vision 2050. Planning and Investment minister, Prof Kitila Mkumbo, said the GDP per capita is expected to rise from the current $1,200 to $7,000 in the next 25 years. Officials target to raise the life expectancy for Tanzanians from the current 68 years to 75 years. Drafting of Vision 2050 began in April 2023, with a review this year. Vision 2025 focused mostly on infrastructure development. Tanzania's population is expected to double from 61 million to about 140 million by 2050, with over half of the population living in urban areas. At the launch, private sector representative industrialist Rostam Aziz criticised the government for seeking foreign firms to execute its strategic, big-ticket projects. Mr Aziz noted that large amounts of money had been paid out to foreign firms, mostly Chinese, to implement projects and pushed for local contractors to get some of those jobs to help empower the local population.'Tanzania excels in drafting plans, but we must fix our implementation. Let's support Tanzanian businesses, especially in access to capital,' he said. He further proposed the establishment of a $100 million annual Talent Development Fund to sponsor 1,000 Tanzanian youth in critical fields, including Artificial Intelligence (AI), data science and engineering. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
10 hours ago
- Zawya
Blocked in Kenya, Brookside Uganda finds lifeline in Algeria
The Ugandan authorities have secured an export window for Brookside Dairy Uganda, granting the company access to the Algerian milk powder market as it recovers from trade restrictions imposed by neighbouring Kenya. Brookside Uganda is one of four local manufacturers selected by the Algerian government and private importers to supply powdered milk. The others are Pearl Dairies (a subsidiary of Mauritius-based Maziwa), Amos Dairies, and Bennifoods. Bennifoods, the latest entrant into Uganda's dairy industry, operates a plant in Lyantonde District, about 200km southwest of Kampala. Kenya Dairy Board (KDB) in March 2023 blocked Brookside Uganda's products from the Kenyan market. To cushion the firm, Ugandan dairy authorities granted it a three-month exclusive window (May to July 2025) to export to Algeria.'Brookside had accumulated stock due to restricted access to the Kenyan market. We agreed to allocate them the first export slot to Algeria,' said Samson Akankiza, Commissioner for Dairy Development and Production. According to Mr Akankiza, Pearl Dairies will take up the next three-month window beginning in August, followed by Amos Dairies and Bennifoods. The Moroccan dairy market, estimated at $1.39 billion in 2024, is projected to reach $1.69 billion by 2030. The $500 million Algerian milk market presents Uganda with a valuable alternative while access to the Kenyan market remains blocked. The KDB has withheld milk import permits from Brookside Uganda for over 800 days, effectively shutting the brand out, despite Ugandan labels such as Lato and Dairy Top enjoying free market access in Kenya. Brookside Dairy Uganda, a subsidiary of Kenya-based Brookside Dairy, has decried the restrictions as unfair. Industry insiders suggest the ban may be politically motivated and possibly tied to tensions between former President Uhuru Kenyatta, whose family holds a majority stake in Brookside, and his successor William Ruto. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
10 hours ago
- Zawya
EAC's plan to ease cost of air travel
High taxes, fees and charges on airlines in Africa have been cited among the measures keeping air transport development on the continent aground. Air transport in Africa is still considered a luxury service, as governments tend to overtax the supply chain, leading to excessive service charges for the airlines. According to African Airlines Association (Afraa), the average amount of passenger's paid taxes and fees applied to air tickets is twice as expensive in Africa than in Europe and the Middle East. According to a study by Predictive Mobility, the elasticity price/demand for air transport within Africa vary from -2.34percent to -3.15 percent, meaning that a reduction of 10 percent on the ticket price can increase demand at continental level, from 22.3 to 30.1 million passengers annually. Thus, the reduction of taxes and charges can allow a significant stimulation of demand on the continent, help airlines to become more competitive against foreign operators, who are based in regions where the taxation is comparatively lower. Taxes vary within the region but, on average, constitute 25-30 percent of the ticket. For example, fares on Entebbe-Nairobi fluctuate between $300 and $350. Taxes on the route constitute about $100 for a return ticket. In East Africa, taxes and fees paid by passengers on regional departure in airports are: Kinshasa at $77.5, Entebbe ($57.2), Dar es Salaam ($54), Nairobi ($50), Mogadishu ($42), Bujumbura ($40) and Addis Ababa ($31). According to Afraa, Central and Western Africa have the best regional taxes policy, as they allow passengers to save on average $12.68 and $10.12 respectively. The initiative has been in development since 2006, with lobbies and businesses pushing for lower airfares, increased connectivity to ease travel and cargo transportation. Drafting of the framework has been ongoing under the Sectoral Council on Transport, Communications and Meteorology (SC-TCM). A report by the 18th meeting of the Sectoral Council shows efforts to domesticate the East African air space. Draft regulations for air transport market liberalisation have provided for aviation freedoms up to the fourth. But stakeholders are demanding that the region expedite the Fifth Freedom. The Fifth Freedom is the right of an airline to carry passengers and cargo between two foreign countries, as long as the flight originates or terminates in the airline's home country. The EAC draft regulations awaiting signatures from partner States allow regional air operators to 'exercise the services referred to as the first, second, third, fourth and fifth freedoms of the air within the community.''Partner states may, at their discretion, grant each other any other rights beyond the Fifth Freedom of the air,' the draft days. EAC Council of Ministers chairperson Beatrice Askul told The EastAfrican that the region was making good progress on the issue of air liberalisation.'The issue is part of our agenda as the council. We are making a lot of progress. ...there are specific ministries including Transport, Communication and Infrastructure, which are directly dealing with the liberalisation and the domestication of the EAC airspace,' she said.'Communication and consultation are still within that level of specific ministries consultation. After that, they will forward recommendations to the council to adopt, when they have all agreed on give and take.' Partner states will subsequently negotiate their regional air transport bilateral arrangements under the Multilateral Air Services Agreement,' said Ariik during the 19th Meeting of Directors General of Civil Aviation and Airports Authorities. But the partners have been reluctant to implement the Fifth Freedom, slowing down the efforts.'EAC members have been reluctant to liberalise their air services because they want to protect their airlines. Partner States think some of the routes are strategic for their national carriers so they are limiting full liberalisation on the Fifth Freedom,' said Adrian Njau, acting chief executive of the East African Business Council (EABC).'The Fouth Freedom -- the right to fly from one's own country to another -- is currently on, but it is not enough.'The freedoms of the air are international commercial aviation agreements, under the International Civil Aviation Organisation (ICAO) granting a country's airlines the privilege to enter and land in another country's airspace.'We want the EAC to grant the Fifth Freedom,' Mr Njau insists. Without an open skies regime in place, the EAC partner states have been relying on bilateral air services agreements to operate, presenting challenges of concluding multiple negotiations between several countries.'As a region we need to do away with bilateral agreements on air travel among EAC partner states because bilateral agreements are very restrictive. We want to make air travel domestic for EAC,' the EABC boss said. Part of the reason why air travel is expensive and cumbersome within the EAC and the rest of Africa is failure by countries to ratify and implement the Single African Air Transport Market (SAATM). Currently, Kenya, Rwanda, and the Democratic Republic of Congo are the only EAC countries that have fully joined the SAATM. Authorities in Kampala indicated that Uganda would join in this financial year.'We are left with approval by the Cabinet. Once that is done, we will be good to go,' said Fred Bamwesigye, director-general of Uganda Civil Aviation Authority at a meeting in Kampala early this year. To date, 34 countries have signed up to the SAATM representing over 80 percent of the existing aviation market in Africa. Even though the EAC concluded the regulations that would streamline the aviation industry, boost trade, promote tourism, and improve global connectivity, transport costs remain some of the highest in Africa.'We pay $3,000 for delegates for DRC (to fly from Kinshasa to Arusha), for instance, and less than $1000 to fly to Europe,' said Kennedy Mukulia, chairperson of the Committee on Legal, Rules and Privileges within the East African Legislative Assembly. Inside the regulations, plans are also underway to reduce fares.'The cost of airfare in the region needs to be addressed,' said Ariik. 'There is therefore a need to look into the possibility of harmonising the current regulatory fees and charges under the spirit of the EAC CMP and to consider and designate the EAC air transport market as domestic for EAC-registered operators and apply charges applicable to domestic parties and eventually lower passenger tariffs.'But a study by Africa Airlines Association in 2024, shows that airline passengers pay on average 3.5 different taxes, charges and fees for international departures, representing an average amount of $68. Taxes and fees generally represent more than 55 percent of airlines' most affordable base fares, and more than 35 percent of total ticket price. Given the low purchasing power in Africa, it is urgent to assess the issue of taxes. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
