Manufacturers Cite Priority Areas to Drive Forward the EAC Integration Process

Kenya Should Champion Engagement at the EAC to Drive Kenya’s Industrialisation Agenda

Kenya Association of Manufacturers (KAM) has today held a meeting with members of the East African Legislative Assembly (EALA), Kenya Chapter to review pertinent issues that are hindering the smooth flow of the EAC integration process.

KAM represented Kenya’s manufacturing sector interests during the negotiations of the EAC Customs Union Protocol in 2002 and witnessed the commencement of the implementation of the Customs Union Protocol from 1st January 2005 to December 2009. EAC has a harmonized customs legislation and procedures and the question that begs is why there has been no uniformity among the Partner States in applying the common law in the Customs Union Management.

When the Common Market Protocol was launched in July 2010, the industry was very optimistic that the EAC has now entered a very important stage of the EAC integration and was really moving towards a single market for goods, services, labour and capital, common taxes and common trade laws.

With now over 11 years since implementation of the Customs Union and 6 years since the Protocol on Common Market was launched a lot is still wanting. Though there has been some milestones, businesses in the region have and still witness a number of frustrations while trading with each other. This is mainly due to lack of honoring the agreed Protocols like rules of origin, Standardization, Quality Assurance, Metrology and Testing (SQMT) Act, Sanitary and Phytosanitary (SPS) protocol and non-tariff barriers imposed by various regulatory authorities from various Partner States.

Addressing the meeting KAM Chief Executive, Ms. Phyllis Wakiaga said, “Industry has been identified as the engine of economic growth among member states and in East Africa. It is therefore important to have enabling business environment and policies in EAC which will nurture the existing investments and attract new investments, create jobs and bring prosperity for East African people.”

Echoing her sentiments Hon. Nancy Abisai, Chairperson, EALA Kenya Chapter called on the Government of Kenya to champion engagement at the EAC level while remaining cognisant of Kenya’s industrialisation agenda. “Kenya needs to be at the forefront and aggressively lobby for policies that will support the Kenyan industry inasmuch as this will be done in the context of the spirit of integration.”

The East African Legislative Assembly (EALA) has a mandate of legislation as well as budget approvals for the EAC. EALA is therefore a very important institution in the development process in EAC. KAM is optimistic that this engagement will be key in creating an enabling environment for the manufacturing sector to expand and contribute to rapid economic growth in the region.

EAC transition to the Common Market level of integration provides a suitable environment for Kenya’s economic agenda to be achieved and indeed those of EAC member states. For instance, the Kenya Industrial Transformation Programme (KITP) seeks to increase manufacturing share of gross domestic product (GDP) to 15 per cent and exports to EAC region would play a critical role in this transformation.

Further, the Fourth East African Development Strategy (2012-2016) seeks to conclude the customs union and also implement the common market protocol. This would allow, in part, the right to establishment, free movement of labour, free movement of capital, and free movement of people. In addition, the EAC Industrialization Strategy (2012-2032) seeks to promote industrialization among East African Member States, in part, through value addition, regulatory reforms, expansion of market access for manufactured products, facilitating the development of micro, small, and medium enterprises (MSMEs), and enhancing access to affordable finances.

KAM through her Manufacturing Priority Agenda (MPA), 2016 champions the above policy directions with a view to create a competitive manufacturing sector. “We believe that this partnership between KAM and EALA will go a long way towards realization of both national and regional goals.” added Ms. Wakiaga.

The meeting agreed to develop a clear engagement framework and to hold regular consultative forums that will enhance deeper collaboration. These platforms will provide for exchange of information and promotion of regional initiatives that would position industry to continue being the pillar of economic growth and development both in the medium and long term. KAM proposals to EALA forms part of such regional industrial transformation agenda.