Fresh move to curb services trade restrictions in EAC

Arusha. The East African Community (EAC) has embarked on addressing hurdles impacting trade in services.

 In that vein, a mechanism has been put in place to identify and monitor removal of the most nagging hurdles.

This was announced by EAC secretary-general Peter Mathuki last weekend during his 'State of the EAC' address.

The removal of trade in service restrictions is being carried out within the framework of the Common Market Protocol.

The protocol signed in November 2009 and enforced in July 2010 is one of the four pillars of the EAC integration.

Trade in Services refers to the sale and delivery of an intangible product called a service, between a producer and consumer.

EAC partner states have committed to scale up trade and investment in services sectors through guaranteeing free movement of services.

Originally under the EAC Common Market Protocol, partner states made commitments to liberalise a total of 144 sub sectors and seven priority sectors. These are business, communications, distribution, education, financial, tourism and travel and transport.

The EAC partner states further agreed to make additional commitments, at a future date, to liberalise the following additional service sectors not covered by the initial commitments.

These are energy services, environmental services, health and social services, construction and related services and recreation, cultural and sporting services.

Dr Mathuki said in order to facilitate the free movement of services, the Community adopted and is implementing a Mechanism for Removal of Restrictions in trade in services.

Right of establishment is one among several components of Common Market Protocol that has been ratified by the partner states.

It would be embraced through implementation of the EAC Private Sector Development Strategy - to catalyse investment and business promotion in the region.

The matter was discussed during last year's EAC Heads of State convened at the Community headquarters in Arusha.

The summit identified several areas that need to be prioritised to ensure that the Common Market is fully operational.

These include among others One Network Area (ONA) and an Open Skies policy.

Dr Mathuki said already five out of the seven EAC partner states have commenced the issuance of the EA e-Passport to facilitate the free movement of persons across the region.

He added that the High-Level Retreat will precede the coming summit of the regional leaders whose date and venue has not been announced.

On the Monetary Union Protocol, the SG said that several bills on the proposed new institutions to support the move are awaiting assent by the EAC presidents.

These include the one on the establishment of the East African Monetary Institute (AMI) which would later be transformed into the East African Central Bank.

Others are Bills for the establishment of the EAC Bureau of Statistics, the East African Surveillance, Compliance and Enforcement Commission.

Also included is a legal draft for the establishment of the East African Financial Services Commission.

The bills for the proposed legislations have been passed by the East African Legislative Assembly (Eala) at different times in recent years.

The 43rd Ordinary Meeting of the Council of Ministers that met in Bujumbura early this year adopted the revised roadmap for the realisation of the East African Monetary Union.

While the roadmap has 2031 as the year for the adoption of the EAC single currency, the ministers are encouraged to revise it to the next three years.

Dr Mathuki said that the implementation of the Single Customs Territory, which is a stop gap measure towards the realisation of a fully-fledged Custom Union in the EAC, was progressing well.

This has seen a reduction in the turn-around time from an average of 21 days to four (4) days along the EAC corridors.

“About 95 percent of the EAC Customs regimes, including imports and exports, have been operationalised with transit being piloted. The average transit time from the main EAC Ports of Entry (Dar es Salaam and Mombasa) to the exit borders reduced from 86.16 hours (3.59 days) to 81.84 hours (3.2 days) in 2022,” Dr Mathuki said.

To fast-track that, a comprehensive review of the EAC Customs Management Act, 2004 has been finalised and that it would enhance the operations of the Single Customs territory.