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06 - 13 September 2006 
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EAC Should Be People Centered

I completed 100 days in office recently.  This is too brief a time to behave as if I know everything in the East African Community; I do not.  Yet in management, a new Chief Executive Officer is often evaluated on the basis of what he or she accomplishes in the first 100 days.  It is said that the first 100 days constitute the litmus test of what one seeks to achieve.  If you fail to use those days to chart out a path you believe in and begin to seriously get other key people in the organization to walk that path, you blow away the unique opportunity to effect needed change.

First and foremost, I wish to underline that the key driver of any organization is its human resource.  However, these resources do not emerge from or operate in a vacuum.  They have to be well organized.  This task demands developing a well conceived organization structure that fits the strategy to be implemented.  Yet whilst the EAC has made some headway in implementing the objectives of the Treaty, its organization structure has remained largely static representing the EAC mandate as it was determined in 1996.  Today, not only is the EAC as a whole too thin on the ground human resource-wise, but its key people are also overworked, underpaid and in an acute state of low morale and productivity.  A mechanistic operating environment has crept in undermining creativity, new thinking and strategic management.  Today, as we await the approval of an ambitious 3rd EAC Development Strategy, we are confronted by this passive environment that has fuelled diversionary pursuits centred in travels to conferences, seminars and workshops, often of little value to the realization of EAC’s objectives.  One is thus not surprised about the general disenchantment over EAC’s performance in terms of producing tangible results. 

It cannot be equitably argued that Partner States lack resources to fund the EAC’s budget to meet higher staff compensation when these same States separately pay, for instance, their diplomats in East Africa more than what they pay EAC staff.  If anything, the EAC staff should be better paid if the EAC is to attract the best and the brightest of East Africans.

The second priority, which defines EAC’s credible and plausible prospect, relates to giving the EAC greater visibility in East Africa and abroad.  This measure crucially involves branding the EAC as a viable and robust economic community able to transform the East African region into a competitive and prosperous region in Africa whilst sustaining peace and stability.  But as earlier observed, the vision and mission of the EAC is yet to be shared by most East Africans.  Merely to say that the formulation of the EAC Treaty involved many East Africans is not sufficient for the vision to be a shared one.  The EAC as a project has to be effectively sold to the people of East Africa in terms of its goals, programmes, strategies and dreams.  East Africans have to be informed, sensitized, mobilized and galvanized about EAC’s lofty objectives.   

The third priority, in tandem with the first and second, is the challenge to promote close linkages between the organs of the Community. It is a rude reality that there have been serious fractures in relations among the EAC organs and especially between the Secretariat and East African Legislative Assembly (EALA). This would not be the first time I pronounce that such estrangement is a recipe for divorce.  I have made a commitment to bring about a radical change in relationships, not out of populism but in the genuine belief that EALA is a pivotal organ in promoting EAC’s interests.  So is the role of the Court of Justice.  Specifically, it is critical that the legislation programme of EALA is deepened.  Until recently, there has been some ambivalence about the role of Protocols vis-a-vis Legislative Bills, leading to unnecessary misunderstandings between EALA and the executive arm of the EAC.  The recent Sectoral Council on Legal and Judicial Affairs has charted out an objective path that better clarifies which EAC matters would be covered by Protocols and which matters would fall within the ambit of Bills. 

The fourth priority will centre on the consolidation of the Customs Union, notably its full implementation.  There are two related issues in this important pillar of the EAC.  First, is the task of harmonization of laws relating to the Customs Union and the Customs Management Act, 2005. The need for accessible, predictable and transparent laws at both national and EAC levels is imperative if an enabling environment that spurs optimum private sector participation in business and economic development is to emerge.  The 3rd EAC Development Strategy has identified this legal issue as of strategic priority and the EAC is working closely with the World Bank to effect appropriate interventions. The second issue is connected with the removal of non-tariff barriers, adopting centralized collection of duties, elimination of internal taxes and negotiating as a bloc.  The latter issue, that of negotiating as a bloc, is particularly worrisome as pressure mounts on conclusion of the EU Economic Partnership Agreements and as the WTO deadline on membership of Customs Union being restricted to one membership draws close.  In April 2002, the EAC had taken a bold decision that it shall negotiate regional and multilateral agreements as a bloc.  The Nanyuki Series have taken bold stands on this issue to the extent of calling on the EAC Partner States to disengage themselves from other trading blocs like COMESA and SADC.  Which way forward remains a puzzle or was Shakespeare right when he wrote that it is darkest before dawn?   

An important question that is connected with consolidation of the Customs Union is the centrality of promoting productive investments.  Investments drive trade in the globalisation era, not vice versa.  Consolidation of the Customs Union thus hinges on how the East African economies are best able to attract both domestic and foreign investments.  Today, about 30 percent of East Africa’s economic competitiveness is eaten away by high costs of doing business – across all sectors of the economy.  Unless serious attention is focused on improving physical infrastructure: roads, telecoms, ICT, railways, ports and harbours and, above all, energy, the Customs Union will be more of a shell than a vibrant market promoting vehicle.  

It is important that we attach greater importance to the regional projects under EAC, namely, the Lake Victoria Development Programme, East African Power Master Plan, East African Road Network Project, East African Railways Development Master Plan and East African Submarine Cable System (EASSY) Project. Our serious concern with development infrastructure would also focus on soft infrastructure whereby equal emphasis would be put on human resource, health, HIV/AIDS and Information Communication Technology (ICT) projects. It is crucial that these projects be made open to private sector participation as well as to public-private partnerships.

The role of the private sector in deepening economic integration in East Africa cannot be overemphasized.  The EAC Treaty recognizes this role in stating that the EAC shall be “market driven”.  During the last five years, the cross-listing of stocks in the three East African stock exchanges has fertilized a new development in the form of mergers and acquisitions.  Though Tanzania is yet to liberalise its capital account fully to allow free movement of capital in East Africa, Kenya and Uganda have taken the lead.  The creation of East African companies as opposed to Kenyan, Ugandan or Tanzanian irrespective of national ownership, is a psychological mindset booster to those that cry wolf about one country “swallowing” another.  When you have a Kenyan company, for example, East African Cables acquiring Tanzania Cables and transforming it into East African Cables (Tanzania) Limited, then proceeding to improve its technology, create new jobs, train and pay the workforce better, where would the fear of being swallowed emerge from?  I believe that Shelly’s of Tanzania, a Tanzanian pharmaceutical giant has also acquired a leading Kenyan pharmaceutical company making Shelly’s (part of the Sumaria group) the largest pharmaceutical company in East Africa.  Uganda’s Casements Ltd has also acquired a Mombasa-based Casements company. These cross border mergers and acquisitions must be bolstered and the full liberalization of the capital account in Tanzania will be a shot in the arm for Tanzanian firms seeking to invest in East Africa. 

The question of putting the East African people at the heart of EAC’s agenda is critical.  We cannot simply be rhetorical about the EAC being people-driven when the people occupy the backseat of the bandwagon.  

By Ambassador Dr. Juma Mwapachu
East Africa Community
Secretary General

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