The Kenya Private Sector Alliance (KEPSA) recently hosted a crucial roundtable with the East African Community (EAC) Secretary General at the Nairobi Serena Hotel. This strategic engagement focused on driving regional economic integration, enhancing the business climate, and ensuring that the private sector’s voice is actively heard in the policymaking process.
Importance of Public-Private Collaboration
The roundtable underscored the necessity of collaboration between the public and private sectors in fostering a more integrated and prosperous East African region. This partnership is seen as vital for enhancing the ease of doing business and bolstering Kenya’s competitiveness within the region and globally. Such efforts are pivotal in ensuring that regional integration not only advances but also benefits all stakeholders involved.
Milestones in Regional Integration
The EAC has achieved several milestones in its integration efforts, including the adoption of the electronic EAC Passport as a common travel document, the removal of visa requirements for EAC citizens traveling between Partner States, and the issuance of gratis student passes. Other significant strides include the implementation of the Single Customs Territory and the adoption of a four-band structure, all of which facilitate smoother intra-regional movement of people and goods.
The region’s economic outlook remains positive, with projections indicating a growth rate of 5.1% for the current year and an increase to 5.7% by 2025. This growth is expected to surpass both the global and Sub-Saharan African averages, reflecting the region’s potential for further economic development.
EAC Secretary General’s Vision for the Private Sector
Veronica Nduva, CBS, the EAC Secretary General, highlighted the need for the regional private sector to find a common ground that aligns national interests with regional benefits. She emphasized reducing protectionism among EAC Partner States through product diversification, specialization, and value addition in manufacturing to leverage the EAC market’s potential of over 300 million consumers.
Nduva provided insights into the intra-EAC trade dynamics, noting a 14% increase in trade value to USD 12.2 billion in 2023 from USD 10.7 billion in 2022. This growth represents a 13% share of the total EAC trade with the Rest of the World, illustrating the expanding scope of intra-regional trade.
KEPSA’s Role and Proposals
Dr. Jas Bedi, KEPSA Chair, acknowledged Kenya’s significant benefits from regional integration, particularly in the service sector, which accounts for over two-thirds of total trade in services. However, he also pointed out the challenges in industrialization due to low electricity access, high costs, poor infrastructure, and protectionist policies.
To address these challenges, Dr. Bedi proposed the establishment of a regional task force to identify and resolve these bottlenecks, with input from the private sector. KEPSA is committed to collaborating with the EAC Secretariat and Partner States to address the private sector’s concerns and unlock the region’s economic potential.
Addressing Trade Barriers and Enhancing Efficiency
Ms. Carole Kariuki, KEPSA CEO, highlighted the need for alignment and integration of revenue collection processes among EAC Member States. She cited the example of importers in Rwanda and Uganda facing inconsistent levies for identical goods, which creates inefficiencies in trade. Kariuki advocated for a single window digital platform where importers and exporters can access harmonized information and guidelines in real-time, ensuring a predictable trading environment.
Future Directions and Recommendations
The roundtable concluded with several recommendations aimed at boosting regional trade and competitiveness. These include aggressive civic education campaigns to inform traders about cross-border trade rules, eliminating paper-based processes in favor of digital transactions, addressing corruption at border posts, and increasing value addition in exports.
By continuously refining integration efforts to meet the dynamic needs of the market and the aspirations of its member states, the EAC and KEPSA aim to create a more conducive business environment that benefits all stakeholders. This collaboration represents a significant step towards a more integrated and prosperous East African region.
