Union of Interests

　　The cost of doing business in the East AfricanCommunity (EAC) has dropped by 20 percent sinceNovember 2013， thanks to the implementation andsubsequent signing of the Single Customs Territory(SCT) in Kampala on January 1， 2014. When fullyimplemented， the agreement will boost cross-investmentand trade among the member countries， andshould help the region’s economies grow by about 30percent.

　　Confirming the game-changing agreement， JohnNjiraini， Commissioner General of the Kenya RevenueAuthority， said that with implementation of the protocol，goods from Kenya will be able to clear customsin Uganda in just 40 minutes. Before the agreement， ittook days.

　　“This means that prices of goods may go downin the long run for consumers as the suppliers arecharged less. Time means money for many businesspeople. Already the process has kicked off well inKenya， Uganda and Rwanda， the countries that havesigned the agreement so far，” Njiraini said.

　　Under the SCT， assessment of goods imported bytraders from the three countries will only be conductedat the first point of entry and trucks weighed onlyupon crossing the border.

　　Revenue collection will also take place at the firstpoint of entry and revenues will be remitted to thedestination partner states， subject to some preconditions.

　　All the roadblocks between Mombasa and Kigaliwill be eliminated and the weighbridges reduced fromnine to three at most， meaning faster clearanceof goods for traders.

　　Njiraini said that Tanzania and Burundi， theother two countries in the EAC， would sign theagreement within the next three months. South Sudan，currently not an EAC member state， is alsoexpected to sign the agreement. Njiraini saidthat while the price of clothes， electronics andfood stuffs will drop under the agreement，services will also become cheaper， and withless checks on goods at border posts， businesspractice will become more efficient.

　　“Issues such as health and bankingcosts are expected to go down as theeconomies in the EAC region continueto merge. We expect the single currencyunion to ease the pressure [on consumers]in the next two years once fully inplace，” Njiraini said.

　　“It’s true， more foreign investors will be attractedby the environment in the EAC， with all these burdensreduced. So far， the Chinese have invested more than$14 billion in health， education， technology， miningand aviation in the region. I cannot tell you thatinvestments have gone up [throughout the region]since November， but they have improved by a marginof 3 percent in Kenya and Uganda since then，” hesaid， confirming that the process is already going wellin Mombasa Port， especially in the importation of oiland fresh fruits.

　　“The [decreased] prices of fruits can be partly attributedto the quick clearance of the goods. Fruits havegone down in price by 10 percent，” Njiraini said.

　　Transporting goods from Mombasa in Kenya toKigali in Rwanda is now taking nine days instead of 20days， as there are less checkpoints and weigh bridgesalong the route.

　　Germano Mwabu， an economics professor atthe University of Nairobi and a veteran World Bankeconomics consultant， said that economic growth inthe region is expected to go up by the end of the year.

　　“You can expect a combined Gross Domestic Productof more than $140 billion in five countries by the endof 2014 compared to the current $78 billion.” Mwabusaid. “Kenya will be the biggest beneficiary with morethan 70 percent of the region’s economy represented.”

　　Mwabu said that the biggest foreign investors sinceJanuary have been Chinese， British and EAC membersin the health， banking， manufacturing， food processingand clothing industries.

　　“The [Single Customs Treaty] meeting inKampala brings many economic opportunities.

　　The trade in agriculture products， goodsand services is proving essential. In the nexttwo years， we expect inflation to go downby 10 percent and the economies of the fivemember countries to increase. This will attractforeign investors as well who want to do businessin a friendly environment，” Mwabu said.

　　The agreement also means that travelersnow need just a national ID card to enterthe member states and not a passport.

　　Uganda， Kenya and Rwanda are alreadyimplementing this move as the other countrieswait to sign the agreement in the nextfew months.