News Round-up

Hard Times for Uganda
Economists have predicted harder times for Uganda as the Bank of Uganda (BoU) moves to limit the acquisition of loans from local banks. The Central Bank, which regulates the financial markets, increased it lending rates up to 16 percent, from 14 percent, in August 2011, signalling a further increase in interest rates by other commercial banks. The surge in the central banks rate (CBR) by two percent points is expected to be replicated by major lenders to businesses and individuals in the economy.

EAC Treaty to Make Political Union
The EAC leaders may have skipped crucial steps in the integration process in the enthusiasm to form a monetary union and a political federation. Without clearly spelling out the nature of political federation and Monetary Union in the EAC Treaty, these two stages of integration are a minefield that could throw the partner states into disintegration again.

During the EAC Annual Governance Conference held in Kampala, experts argued that provisions of the current treaty were not clear on how to attain political federation. Mainly because this was a matter that required partner states to cede their sovereignty, as opposed to earlier stages of regional integration, the customs union and common market.

EAC to Increase Fight on NTBs
The EAC has been urged to establish an agency to deal with the increasing number of non-tariff barriers. There are too many road blocks and weighbridges along central and northern corridors. For example, a transit truck using central corridor from Dar es Salaam to Rwanda is required to pass 28 road blocks in Tanzania and one had to stop at nearly all of them, even when carrying transit cargo which has customs seals. Indeed, experts have acknowledged that these barriers have acted as an inhibitor in intra-regional trade, a year after the Common market protocol came into force.