The proposed East African Federation might not be realised due to failure by the governments to educate their citizens on its merit. Scanty information on the federation is the main reason why the establishment of a unitary government covering Kenya, Uganda, Tanzania, Rwanda and Burundi may not occur by the 2012 deadline.
The setting up of a unitary East African government would be preceded by the establishment of a common currency. It is perceived that monetary union tends to favour those countries with weaker currencies than those with stronger ones. Land ownership, issues of identity cards and permanent residency remains the sticking points that Tanzania has demanded resolutions on before the common markets can be put in place.
EAC Unity in Sight
The EAC Court of Justice says there is nothing wrong with some member countries moving faster than others on regional integration. This means that the EAC Common Market might come into force much earlier than anticipated, without “pending issues” necessarily being resolved first.
In a ruling on an application by the EAC Council of Ministers, through the Community’s counsel, the First Instance Division of the Court said such flexibility is consistent with the Treaty on the Establishment of the EAC. The council comprises member country ministers in charge of the EAC affairs from Kenya, Uganda, Tanzania, Rwanda and Burundi. Variable geometry is a principle in regional integration whereby some community members can move faster than others on some matters.
Time to Move and Trade Freely
The launching of the CU for the Common Market for Eastern and Southern Africa (COMESA) is good news if the policy makers have in mind a new economic model. If the plan is to simply transform tiny markets of economic spectators into a giant 400 million strong prison of poverty; then Africans ought to be very cautious.
Kenyans are aware of the pyramid scheme type of economy, which leaves thousands on the queue waiting for bailouts that will never come their way. The CU will only be of benefit to Africans if governments of the 19 member states proactively seek to increase the productivity of their populations by eradicating archaic policies.
Experts Lay Ground for Tax Deal
The EAC has convened a meeting of experts in Arusha to discuss a taxation deal said to be critical to the successful launch of a common market in January 2010. Top on the agenda is preparation of a double taxation agreement for signing off by the EAC summit in September 2009 to reduce the cost of doing business in the region and ensure companies involved in cross-border transactions are not taxed twice.
The tax experts from the five EAC member states are also expected to come up with policy proposals that will deepen ongoing efforts to harmonise the national tax regimes. The double taxation treaty – negotiated by a tripartite team from Kenya, Tanzania and Uganda before Rwanda and Burundi became EAC members – will allow companies with cross border operations to be charged tax once.