EAC Secretariat needs powers to punish errant partner states

By Ismail Musa Ladu

East African Business Council (EABC) was established to foster private sector interests in the East African Community. But over the years, this task has proven tougher to chew. Prosper’s Ismail Musa Ladu interviewed the director Madhvani Group and chairman Uganda Sugar Manufacturers’ Association, Mr Jim Mwine Kabeho, who last month completed a one-year term (2017/18) at the helm of EABC. Excerpts below.

How would you account for your time at the helm of EABC?
During the one year, I concentrated on promoting local content. This is because currently, all partner states are carrying out mega projects in oil and gas, mining, building dams and bridges, construction of roads, railways and establishing airports and harbours. All these need materials such as cement and steel which can be sourced locally. Even skills, food and labour can all be sourced domestically.

But because we do not have an EAC Content Bill for the region, contractors, most of whom are foreigners, are taking advantage of that gap and importing all materials outside East Africa. This is not acceptable!
I also advocated for increased agricultural sector funding. I encouraged women in business programmes and made a call for businesses in the region to embrace innovation and technology, let alone getting involved in climate change mitigation measures.

Issues of Non-Tariff Barriers (NTBs) remain a challenge for private sector in the region. How did you handle this perennial problem?
Over the 12 months, we massively fought Non-Tariff Barriers (NTBs). This was done by trying to harmonise positions which we agree on as a region (EAC) but which keep shifting from time to time.
I tried to see that agreed position in EABC protocols are observed across the EAC partner States. For example, trade, especially of goods and services agreed upon in the EABC protocols keeps changing. We have also seen individual member country’s interests over running the regional commitments.

Suspension of taxes has become a common feature, hindering smooth regional trade in favour of importing products outside the region.
According to the Common Market Protocol, which gave birth to the Customs Union, we (EAC countries) agreed that there should be free movement of trade in goods and services but that isn’t completely the case when it comes to practice. Actually, it is easier for goods outside East Africa to pass through our customs points than our own goods manufactured in the respective regional countries.

Just last month, we recalled hundreds of tonnes of sugar that we had sent to Tanzania. It was stopped from entering in Mwanza and after one month when we realised that the sugar could get spoilt because of absorbing water there, we shipped it back.
Remember this happened after the February Summit where President John Pombe Magufuli and President Yoweri Museveni resolved that we should be sending sugar to Tanzania. But the officials there refused to grant access. So, these are challenges which keep coming up and part of my work was to harmonise these positions.

What does that mean in the grand scheme of things?
We don’t know. But that tells you the task ahead. If as EAC we cannot go about our issues the way we should, then how can we perform well in the expanded Common Market for Eastern and Southern Africa (Comesa). How shall we relate in the Southern African Development Community (SADC). How shall we play in the continental trade bloc?
10 years ago, our integration process was lauded as the model for Africa. But lately that may not be the case. In the last five years, we have been dealing with things that the Protocol clearly spells out. That shouldn’t be the case. We should be moving forward.

How can this be sorted out without derailing the regional integration
We advocate for transfer of power and dispute resolution from national partner states to EAC Secretariat. We also want to see the regional Courts of Justice and EALA get more involved in matters regional.
Currently, individual states make decisions on issues that have wider implications on the integration process without extensive consultations. This is why we are seeing situations where an investor is made to believe that there is a market of 160million people, only to realise after investing that they cannot freely move their goods across the region.
We have seen milk, rice, sugar and steel among other commodities being denied access across the region, yet they are locally or regionally manufactured goods.

What is the way forward here?
The solution begins with us leaders. We don’t have to shy away from these challenges. We need to candidly discuss them with a view of finding a lasting solution. There is also need for the political good will. The political goodwill at the top level should ensure that the protocols are respected. It is important for the regional countries to realise they cannot have their cake and eat it. So the power to decide on regional matters shouldn’t remain in the hands of the individual countries. The other point is implementing local content. Without it we have nothing. The enforcement should begin now. There are some huge projects going on across the region which normally happen once in a life time. So, if we cannot supply our steel now, then when shall we do it and when shall we get the skills?

You seemed to have done well as the chairperson of the EABC. What was your magic bullet?
I have received a lot of support from my company and the Sugar Association where I am the chairman. I have also been EABC board member for a while now so I understand the nature of problems we struggling with. I tackled issues of visibility in each country by creating strong private sector programmes, including in South Sudan where there is no organised private sector. We brought them together and empowered them on advocacy issues.
Importantly, I had to mobilise our leaders in each chapter across EAC member states. We also created business awards which we gave to businesses that possessed regional touch. We also held entrepreneurship conference in Dar-es-Salaam, did the women in business meeting in Nairobi, resulting into a platform for women in businesses.
We teamed up with Germany to create what we call business perspective. It is about matching businesses in East African countries with German companies. Among other things they share experiences, network, exchange ideas and innovations. Actually, it is a two-year programme and about 15 companies from here should be involved.

In a scale of one to 10, how can you rate your performance while at the helm of the EABC?
That is not for me to judge. But if I must, I had a very good year.


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