From Africa Recovery, Vol.12#4 (April 1999), Briefs page

East Africa takes further steps towards integration

Trade and investment in East Africa should receive a boost following the scheduled signature in July of a treaty on East African cooperation by Presidents Daniel arap Moi of Kenya, Benjamin Mkapa of Tanzania and Yoweri Museveni of Uganda. The treaty will establish zero tariff rates for trade between the three East African Cooperation (EAC) members states, although certain products on an agreed list will be excluded, in order to protect public revenue and infant industries. Traders will be able to levy a maximum 10 per cent surcharge on products deemed exempt from the zero tariff. All non-tariff barriers between the three countries will be removed, however. The treaty also provides for an 80 per cent preferential tariff reduction for trade between EAC countries and their Common Market for Eastern and Southern Africa (COMESA) partners.

Treaty advocates hope that cooperation among the East African countries will lead to the development of a single market and investment area, which would capitalize on the region's human and physical resources. With an eye on economic integration aims, EAC members have set ambitious macroeconomic targets, including the reduction of inflation rates to single-digit levels by 2000, budget deficits of less than 5 per cent of gross domestic product and the building of foreign exchange reserves to the level of six months of imports.

EAC membership is expected to expand with the January decision to open the way for Rwanda and Burundi to join. The two countries would add a total 13.8 mn people and a land area of 54,170 square km to the combined population of about 80 mn inhabiting an area of 1.8 mn square km that constitutes the current EAC. But some analysts predict that expanded membership will delay progress on economic integration.

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