During a regional private sector session held on Wednesday, July 20, a day before the East African Community (EAC) Leaders’ Meeting in Arusha, Tanzania, from July 21 to July 22, highlighted five key issues that the business community wants leaders to address in order to improve the business environment.
On Thursday, July 21, EAC leaders will hold a high-level retreat at the Common Market. They are expected to, inter alia, take stock of the progress of the implementation of the EAC Common Market Protocol; adopt strategic measures to unblock delays and bottlenecks in the establishment of the Common Market; and agree on a roadmap for the full realization of the Common Market.
The Common Market Protocol is the second pillar of the bloc’s integration program. Later on Friday, July 22, the Heads of State will hold the 22nd Ordinary Summit at the Arusha International Conference Center, Arusha.
According to John Bosco Kalisa, CEO of the East African Business Council (EABC), here are the five key questions they want leaders to address:
Summit to direct the EAC Council of Ministers to amend the Common Market Protocol to provide regional laws for each freedom and right. The common market, which is in line with the provisions of the EAC Treaty, provides for four freedoms; free movement of goods; work; services; and capital.
The four freedoms were meant to boost trade and investment and make the region more prosperous, but often encountered challenges – ranging from political disputes between partner states to unpredictable situations caused by climate change as well as the Covid-19 pandemic – this meant the block integration program slowdown.
The Protocol on the Establishment of the EAC Common Market entered into force in July 2010, following its ratification by all five then Partner States: Burundi, Kenya, Rwanda, Tanzania and Uganda. This was long before South Sudan and DR Congo joined the bloc.
The business community also wants the Summit to direct the Council to develop a regional sanctions law to address the slow pace of ratification, implementation and enforcement of protocols, policies, regulations and guidelines.
They also want the heads of state to give a deadline for the ratification and deposit of the protocols – double taxation, extension of the competence of the EACJ in matters of trade and investment. Particular emphasis is placed on Article 24(2) relating to the Trade Remedy Committee.
Another demand is that the Summit direct Partner States to implement the Single Network Area (ONA) on data and voice fully, immediately and without further delay.
Regarding the issue of telecommunications and broadband internet, the regional business group notes that while Rwanda, Kenya, Uganda and South Sudan are implementing the ONA model, Burundi and Tanzania are not have not joined the ONA, “making the cost of telecommunications and high-speed internet prohibitive because of roaming charges.”
High telecommunications and high-speed Internet tariffs and taxes increase the cost of doing business and limit the competitiveness of businesses in the region. High licensing and dialing fees, unharmonized inter-operator tariff rates, and non-adoption of ONA in the region increase the cost of doing business.
Finally, they want the Summit to direct the Council to prioritize the harmonization of domestic and air taxes and levies by the end of 2022.
Meanwhile, business leaders also want Burundi and Tanzania to ratify the EAC agreement to avoid double taxation and prevent tax and revenue tax evasion by the end of 2022.
In 2018, the EAC Partner States adopted a national tax harmonization policy. The objective was to create a clear regional approach on the harmonization of income tax, value added tax and excise duties. This policy stipulates the roles and responsibilities of partner states on the processes and implementation of national tax harmonization in an efficient, cost-effective and consistent manner.
Identify areas where development partners can contribute
According to the EAC Secretariat, regional leaders will also identify key areas where development partners can contribute to the realization of the Common Market.
Last month, the EAC General Secretary, Peter Mathuki said The new times this it was high time “that we take stock and reflect on whether [EAC Common Market Protocol] is working properly and what we need to do so that ordinary people in the region can better benefit from it. »
Despite the difficulties, regional leaders have always maintained or reaffirmed the commitment of the Summit to the EAC integration process.
About 300 participants from Partner States, private sector, civil society and development partners traveled to Arusha to attend the High Level Retreat and the 22nd EAC Summit.
“At their 22nd Ordinary Meeting, the EAC Heads of State will, inter alia: consider the report of the Council to the Summit; assent to bills passed by the East African Legislative Assembly; consider the report of the EAC Common Market High Level Summit Retreat, and; appoint the judges to the East African Court of Justice,” reads a statement from the EAC Secretariat.
It is also to be noted that on Friday, July 22, Heads of State are expected to launch the 42.4 km Arusha Bypass Road.
The bypass is part of the multinational Arusha – Holili /Taveta – Voi road project.
The bypass was co-financed by the African Development Bank (AfDB), the Africa Trade Fund and the governments of the United Republic of Tanzania and the Republic of Kenya to the tune of $173.86 million.