Key hurdles still stand in the way of business in East Africa

Needless charges and regulations as well as closed skies are bottlenecks to cross-border business in East Africa, a lobby has said.

The East African Business Council (EABC) now wants the regional parliament to fast-track the removal of these barriers to boost trade.

The council executive director Lilian Awinja said the slow pace of opening up the borders exposes local traders and professionals to cutthroat competition from importers and consultants servicing individual markets directly.

“The private sector is concerned that despite the commitments of the EAC partner States at the international level as evidenced by concerted efforts to integrate East Africa into a single market, domestic air transport remains over-protected, thus translating into less accessible and unaffordable for potential local users,” she said in a statement.

Commuter air services within the East Africa Community comprising Kenya, South Sudan, Uganda, Tanzania, Burundi and Rwanda, face hurdles as some routes remain unserved.

Most travellers from one country to another have to fly to Nairobi’s Jomo Kenyatta International Airport to catch a connecting flight. For example, East Africa Legislative Assembly Speaker Daniel Kidega’s endured a 10-hour flight from Arusha in Tanzania to Kigali in Rwanda.

“As I came here from my home in Arusha, I took a flight to Zanzibar, then to Nairobi, from there to Bujumbura and then on to Kigali. It took me close to 10 hours from Arusha to Kigali. That is an unacceptable way to do business,” he said.

READ: Uhuru pushes for removal of EAC trade barriers

Reciprocal flights

Ms Awinja said despite Kenya, Uganda, Rwanda and South Sudan opening up their respective skies for reciprocal flights, laws are yet to be enacted to effect the deal.

But analysts fear the deal could favour Kenyan-based operators which have larger fleets compared to other EAC countries.

The traders’ lobby called for harmonisation of all fees charged so that all airlines are treated equally when providing cross-border services.

EABC said a study it commissioned on the costs and benefits of open skies will be unveiled in April when it hosts regional MPs for a workshop to discuss ways to fast-track the process.

Mr Kidega said they were yet to receive a progress report from the EAC Civil Aviation Safety and Security Oversight Agency on efforts to open up the airspace.

The Kigali meeting also discussed progress made on non-tariff barriers, harmonisation of standards and free movement of labour in the economic bloc.

READ: NJOROGE: Convergence can curb EA telecom trade barriers

Mr Kidega said the deliberations will be forwarded to the Assembly’s Committee on Communications, Trade and Investment for further examination pending presentation before the House for debate.

On the commercial front, the meeting heard that though business, education, finance, communication, tourism and transport sectors were liberalised in 2010, the gains have not been fully realised since negotiations on some key issues and regulations allowing liberalisation were yet to be initiated.

On the high cost of telecommunication, EABC urged Tanzania and Burundi to join Kenya, Uganda, Rwanda and South Sudan to create One Network Area (ONA), which will see rates reduced to a uniform charge for calls and text messages thereby eliminating cross-border levies.

ONA is currently under implementation under the Northern Corridor Integrated Projects framework which will see a series of infrastructural projects — including the Standard Gauge Railway project — implemented linking East Africans via roads, air and railway.

The move has seen Kenya Uganda and Rwanda introduce a single tourism visa enabling tour companies to formulate inter-country products.

“Partner states should move with speed to remove taxes on roaming, as on other ICT services and equipment, harmonise VAT and excise taxes that impact on cost of telecommunication, progressively harmonise costs of spectrum, licence fees, universal access fund, numbering fees and cost of bandwidth,” Ms Awinja said.

EABC vouched for further negotiations in the coming Heads of State Summit where further concessions are expected on the remaining service sectors, notably construction, environment, health and social, culture and sporting services.

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