EAC States challenged on trade agreements
The East African Community (EAC) partner states have been challenged to increase their volume of transactions under regional and international trade agreements.
The region’s private sector trade block, East Africa Business Council, said it is imperative for the region to take advantage of opportunities such as the African Continental Free Trade Area (AfCFTA), African Growth and Opportunity Act (AGOA), Economic partnership agreement, to advance trade within the EAC.
According to the EABC chairperson, Angelina Ngalula, the region has not fully exploited the trade agreements to its advantage, due to challenges such as low productive capacity,
fragmentation and poor infrastructure.
“With the AfCFTA, there are no boundaries of doing business in Africa, so the EAC bloc should be well-prepared to export competitive professional services and skills to the continent. The regional governments should therefore come in to address some of the roadblocks in the way of achieving this,” she said.
She called upon the regional governments to create a One Stop Centre for Women in Business to ease their access to customs and trade permits.
AfCFTA is part of the African Union Agenda 2063 flagship initiative established to create an integrated continental market for goods and services and to support the movement of capital and natural persons.
Full implementation of the agreement is expected to reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.
Implementation of AfCFTA also means nationals of the 54 African states can freely move their capital and natural persons across the states for business.
The arrangement, according to experts, is expected to enhance competitiveness, promote industrial development through diversification and regional value chain development, and foster sustainable socio-economic development and structural transformation of the region.
The arrangement is also expected to boost intra-African trade by approximately 52.3% through the elimination of import duties and reduction of non-tariff barriers, which hitherto are faulted for the paltry activity on the estimated $3.4trillion continental market.
Ngalula said the EABC will create business-to-business (B2B) networking opportunities to boost bilateral trade ties and unlock Non- Tariff Barriers, both in the region, the continent and abroad, with a $7b support fund from Equity Bank.
The EABC chief executive officer, John Bosco Kalisa said although intra-regional trade is growing, the pace is still small.
He said currently intra EAC trade is estimated at 20%, far below the anticipated level, while Intra African trade stands at 18% of total exports. He said EAC exports to AGOA were valued at $5.26b while EAC exports to EU stood at $.2.67b.
According to the executive director of the Uganda Manufacturers’ Association (UMA), Daniel Birungi, trade restrictiveness and over-the- roof costs constitute the biggest challenge to trading within the African continent.