Truly Integrated Market Would Bring Benefits to East Africa

East African Community has achieved a lot in its first decade

But important nontariff barriers remain between community members

Integration process calls for giving up sovereignty to supranational entities

Speaking February 27 at a conference that assessed the benefits of regional integration in the decade since the five-nation grouping was established, Shinohara said the community had achieved a lot in its first 10 years. Existing members had achieved strong economic track records, and more countries had applied to join.

But there seems to be a long way to go toward better implementation of the community’s customs union and common market, Shinohara said. “Important nontariff barriers remain between East African Community member countries. Without a truly integrated market, the community is not likely to see the full benefits of improved productivity, competitiveness, and welfare.”

East African Community Secretary General Richard Sezibera noted that the community’s secretariat had identified removal of nontariff barriers as a major work priority in 2012. “Removal of restrictions on capital flows should serve as a catalyst for capital market development and for the provision of long-term and risk capital most needed to spur economic development,” Sezibera said.

More than 30 think tanks, civil service organizations, and media representatives participated in the February 27–28 conference, which was held in the Tanzanian city that hosts the East African Community’s headquarters. The organization comprises Burundi, Kenya, Rwanda, Tanzania, and Uganda.

Larger common market

Shinohara noted that the community comprises countries with a combined population of more than 130 million. With further expansion a real possibility, the grouping faces the question of finding the optimal pace of integration. “The challenge is how to balance the prospective benefits of a larger common market against the greater complexity that comes with a more diverse membership,” Shinohara said.

Countries benefiting from rapid productivity growth and improving living standards will be more ready to tackle the adjustment challenges involved with membership in a common market, Shinohara stated. He noted that IMF analysis shows a gap between the countries experiencing rapid productivity growth, such as Tanzania, for example, and slower growing countries.

“This is worrisome, as a widening income gap is opening up between some of the EAC countries. One issue here may...