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East African Community

Uganda is one of the founding members and a signatory to the East African Community (EAC) treaty. EAC is a regional intergovernmental organisation of six Partner States namely: the Republics of Burundi, Kenya, Rwanda, South Sudan, the United Republic of Tanzania, and the Republic of Uganda. The work of the EAC is guided by its Treaty which established the Community. It was signed on 30 November 1999 and entered into force on 7 July 2000 following its ratification by the original three Partner States - Kenya, Tanzania and Uganda. The Republic of Rwanda and the Republic of Burundi acceded to the EAC Treaty on 18 June 2007 and became full Members of the Community with effect from 1 July 2007. The Republic of South Sudan acceded to the Treaty on 15 April 2016 and become a full Member on 15 August 2016. The EAC is home to 150 million citizens, with a land area of 1.82 million square kilometres and a combined Gross Domestic Product of US$ 146 billion.

The EAC operationalizes the Treaty through medium-term development strategies. The 1st Development Strategy covered the period 1997 -2000 and focused on the re-launching of the EAC, a period usually referred to as the confidence building phase. The 2nd Development Strategy covered the period 2001 -2005 and mainly focused on the establishment of the EAC Customs Union and laying the groundwork for the Common Market. The 3rd Development Strategy (2006 – 2010) prioritized the establishment of the EAC Common Market and while the 4th Development Strategy covering the period July 2011 to June 2016 mainly focused on the implementation of the EAC Common Market and the establishment of the EAC Monetary Union.

The Customs Union

This is first regional integration milestone, and became fully fledged in 2010. Under this pillar, EAC Partner States agreed to establish free trade (or zero duty imposed) on goods and services amongst themselves and agreed on a Common External Tariff (CET), whereby imports from countries outside the EAC zone are subjected to the same tariff when sold to any EAC Partner State.  Goods moving freely within the EAC however are expected to comply with the EAC Rules of Origin and with certain provisions of the Protocol for the Establishment of the East African Community Customs Union.

The following are recent achievements associated with the Customs Union Protocol:

  • The coverage of goods under the Single Customs Territory Programme has expanded to include all intra-regional trade within EAC. As a result, there has been a high reduction in the period it takes to clear goods.  It now takes three (3) to four (4) days to clear goods on the central corridor from over 20 days; 21 days to four (4) days from Mombasa to Kampala; and 18 days to six (6) days to Kigali, on the Northern Corridor
  • 13 out of the 15 borders earmarked to operate as One Stop Border Posts (OSBPs) have been completed and were operational as of March 2019. The OSBPs have reduced transit costs incurred in cross border movement by combining several activities undertaken by both countries’ border Organizations and Agencies at a single location and in each direction. Besides operationalization of the OSBPs, responsible personnel have also been trained and this  has greatly reduced the average time taken to clear travelers and trucks at the borders from days to about 1.5 minutes to 30 minutes respectively

The Common Market

The second regional integration milestone, came into force in 2010.  It requires EAC Partner States to maintain a liberal stance towards the five Freedoms of movement for all the factors of production and two Rights between themselves. These Freedoms and Rights include:

  • Free Movement of Goods
  • Free Movement of Persons
  • Free Movement of Labour / Workers
  • Right of Establishment
  • Right of Residence
  • Free Movement of Services
  • Free Movement of Capital

However, there has been slow implementation of the Common Market Protocol by the Partner States.  The EAC Scorecard 2013 identified at least 63 non-conforming measures in the trade of services and 51 non-tariff barriers affecting trade in goods.  Similarly, in terms of capital movement, only 2 of the 20 operations covered by the Common Market Protocol were free of restrictions in all of the EAC Partner States.

In 2015, EAC started prioritizing the harmonization of tax regimes in the region to promote coordination of taxation systems and prevent any national tax measures that could negatively affect the functioning of the Common Market. To further advance the benefits of a common market, in 2016, countries under the EAC framework took a decision to procure their textile and footwear requirements from within the region, where quality and supply capacities are available competitively. Furthermore, the new international East African e-passport was launched and became effective on 1st January 2017.

The East African Monetary Union

This is the third regional integration milestone, which came into force in November 2013. It lays groundwork for a monetary union within 10 years and allows the EAC Partner States to progressively converge their currencies into a single currency in the Community. In the run-up to achieving a single currency, the EAC Partner States aim to harmonise monetary and fiscal policies; harmonise financial, payment and settlement systems; harmonise financial accounting and reporting practices; harmonise policies and standards on statistical information; and, establish an East African Central Bank. EAC Partner States are still committed and are on course to attaining the target of a single currency by the year 2024. In that regard, the Partner States are currently undertaking key programmes for the harmonization of Capital Markets and Payment Systems. So far, EAC Partner States have harmonized the critical policies that are essential for a sustainable Monetary Union. The East African Legislative Assembly has so far enacted the East African Monetary Institute Bill, 2018 and the East African Statistics Bureau Bill, 2018.

In FY 2015/16, the EAC launched its long term planning framework – Vision 2050 – at the 17th Ordinary Summit of the EAC. EAC’s Vision 2050 projects the EAC bloc as a prosperous, competitive, secure, stable and politically-united East Africa.  It is envisioned that by 2050, the bloc will have transformed into an upper-middle income region within a secure and politically united East Africa based on the principles of inclusiveness and accountability. The development is a welcome enabler for development planning and economic management in Uganda.  It provides a concrete regional roadmap, against which the relevant national and local authorities in the country can assess and reexamine their plans and strategies.