Kenya: EA’s Most Unstable Economy
Kenya is East Africa’s most vulnerable country to political and social upheaval that is expected to arise from a long drawn-out global recession. London-based Economist Intelligence Unit (EIU) says the level of risk in East Africa’s biggest economy has been heightened by rapid population growth, high levels of inequality, and widespread poverty that is expected to deepen with the global downturn.
A stalled constitutional review process, rampant corruption in government and a general breakdown in the rule of law has deepened Kenya’s exposure to social and political tension putting at risk the stability of the coalition government.
Kenyan Exporters Face New Barriers in Africa
A new wave of protectionism is sweeping through Africa making it difficult for Kenyan manufacturers to export to the regional market. Many countries are giving in to internal political pressure for protection from import competition to protect jobs as the global financial crisis drives most employers into a squeeze, threatening millions of jobs.
The moves are particularly painful for export-oriented economies such as Kenya adding subdued demand to the burden of production costs that manufacturers are facing locally. Most manufacturing executives have put on hold key projects until a clearer picture emerges of what the impact of the global downturn will be on the Kenyan economy.
Limited Role in EAC Talks
Negotiations to establish the Common Market Protocol of the EAC enter the last lap amid concerns in the Uganda business community that they do not have enough of a say in the process. Uganda’s private sector has only two representatives at the High Level Task Force – the Private Sector Foundation of Uganda (PSFU) and the Uganda Manufacturers Association (UMA).
The government has officials from the Ministries of EAC Affairs, Finance, Trade, Tourism and Industry as well as Gender and Labor, Agriculture, Land, Education, Justice, the Central Bank and the Uganda Revenue Authority. Once the negotiations are concluded the coordination committee will receive the Draft Protocol, which it will then forward to the Council of Ministers to give further guidance on its adoption, before the Protocol’s implementation is launched in 2010.
Tough Stance at Regional Trade Talks
Tanzania takes hard lines in the East African Common Market Protocol Negotiations in Kisumu. Kenya and Uganda urged their partner states to relinquish some of their sovereignty to other organs of the community to speed up integration. Kenyan and Ugandan counterparts defiantly declared that they were ready to go ahead with the move to a common market without Tanzania.
Tanzanian head of delegation reaffirmed his country’s commitment to the spirit of East African integration citing that they would never consider pulling out of EAC because of the shared interests, which are more than the differences people have been focusing on. Land legislation and use of national identification is the main concern for Tanzania’s integration process. Tanzanian delegation clarified that these differences should not act as obstacles in the commencement of the Common Market by 2010.