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EAC and Customs & Trade

While the objectives of the East African Community cover almost all spheres of life, the main goal of the Customs Union is the formation of a Single Customs Territory and the implementation of the Common Market Protocol. It is within this context, that internal tariffs and non-tariff barriers that could hinder trade between the Partner States have to be eliminated in order to facilitate cross-border trade through the formation of single market and investment area. Similarly, policies relating to trade between the Partner States and other countries, such as the external tariffs must be harmonised. Within a Customs Union, Partner States acting as a Single Customs Territory and trading bloc will be able to enjoy economies of scale, with a view to speed up economic development and growth in the region.

EAC-GIZ SUPPORT

Standards and Customs Processes


Despite the immense opportunities offered by the EAC’s regional market, the share of intra-regional trade remains at a low of 10%, leaving 90% to external trade partners. This has been partly attributed to lack of or failure to implement harmonised standards and customs procedures. The 6th EAC Development Strategy 2021-2026 envisions attainment of a fully functional Customs Union through implementation of the Single Customs Territory, enhanced ICT systems for customs administrations and other key players. Furthermore, it aims at the elimination of trade barriers, promotion of SMEs, participation in intra-regional trade and market access expansion to facilitate legitimate trade and investment in the EAC as well as safeguard government revenues. Additionally, the EAC region aspires to improve regional trade and value addition by harmonising standards for the most traded EAC products. Harmonised standards boost productivity by reducing costs of trade through avoiding duplication in testing and inspection, streamlining operations and eliminating restrictive regulations.

Projects:

Objective: Strengthening regional industrial value addition in selected priority sectors (pharma, leather, and fruits & vegetables).

Approach: SEAMPEC contributes to improving the framework conditions for increased trade, investment and value addition by supporting the EAC to implement harmonised standards and customs procedures in selected priority sectors (pharmaceuticals, leather, fruits & vegetables). Specifically, SEAMPEC supports the implementation of simplified customs procedures for perishable goods, awareness creation among all key stakeholders and human capacity development on customs procedures. A special focus is on ensuring that the private sector’s recommendations regarding the improvement of relevant framework conditions are considered in the policy decision-making processes of the EAC and its Partner States. This part of SEAMPEC is implemented by GFA Consulting Group.

Find more information on SEAMPEC here.

Objective: Contribute to economic development in the EAC region by increasing the value of both extra and intra-regional agricultural exports of selected products in the agricultural value chain, with a focus on intra-EAC trade and exports towards the European Union.

Approach: MARKUP improves sector standards and sanitary and phyto-sanitary (SPS) measures for coffee, tea, cocoa, spices and avocado and other horticultural products. Based on an assessment of prevailing gaps in regional SPS measures and national implementation of existing SPS measures, new regional standards for the EAC are developed and existing ones harmonised. So far, harmonised standards for products in the cocoa value chain and for pre-packaged foods were developed and are in the process of being adopted by the EAC.

MARKUP, through its partner International Trade Centre (ITC), supports the establishment of a Regional Trade Information Portal and a Quality for Trade Platform to help East African Companies find out the quality and standards requirements when exporting their products within the EAC and internationally.

Find more information on MARKUP as part of the SEAMPEC programme here.

Objective: A basis for the development of trade in seed potatoes in the EAC is provided.

Approach: In the EAC, phytosanitary requirements for seed potato differ between the Partner States, which limits the possibilities for regional trading. While there is in fact a coordinated seed standard in the EAC, it has not yet been implemented on country levels. Well-regulated trade in seed potatoes between the Partner States would provide a crucial incentive for the private sector to step up its investments in seed potato production. FABI provides support to create a conducive environment for effective agreements related to seed potato requirements (national and regional).

Measures include:

  • Consultations in the strategy development processes and facilitation of an EAC-wide harmonisation of standardisation processes.
  • Improvement of testing infrastructure and of audit methods.
  • Establish a platform for seed potato stakeholders to facilitate the harmonisation of standards across the EAC Partner States.

Find more information on FABI here.

Trade in Services


On average, Trade in Services contributes around 59% to overall GDP in the EAC Partner States. The economic impact and contribution of services within the region cannot be overstated. Furthermore, services link to other industries. They add value to manufacturing and contribute to SME development through financial services such as mobile money. In short, services are key for the economic growth of the EAC Partner States. The free movement of services and service providers therefore further strengthens competitiveness, productivity and employment within the EAC region. The liberalisation of Trade in Services in the EAC is anchored on provisions and obligations within the Articles of the Common Market Protocol, which provides the legal basis for implementing commitments to services within the Community.

Projects:

Objective: Facilitation of the regional movement of EAC services and services providers through the removal of restrictions and barriers such as laws, regulations and cumbersome administrative procedures.

Approach: SEAMPEC supports the Partner States, through the EAC Secretariat, in the development of interventions and measures that improve framework conditions through elimination or reduction of barriers and restrictions that otherwise impede the free movement of services and services providers. These can be regulatory in nature such as domestic laws that either discriminate or otherwise prevent EAC services provides from accessing the respective markets, or de facto and cumbersome administrative processes that are costly and complicated.

Already achieved milestones include:

  • EAC Partner States have committed to provide Market Access and National Treatment to EAC services providers, across all modes of supply in seven services sectors (Education, Distribution, Business Services, Communication, Financial, Transportation and Tourism Services).
  • Development of draft regulations on the free movement of services and service suppliers.
  • Increased private sector participation and engagement in Trade in Services liberalisation processes.
  • Development of roadmaps for Mutual Recognition Agreements implementation.

In the context of SEAMPEC and moving forward, EAC-GIZ will support the identification and removal of Trade in Services barriers and restrictions in the priority sectors of Tourism, ICT and Business Services. This will involve the following:

  • Development of joint proposals between private and public sector, for regulatory reform in the sectors with respect to the Common Market Protocol.
  • Development of minimum standards for registration and licensing requirements for tour guides and tour operators.
  • Advancement of the One Network Area to to all Partner States and developing guidelines on mobile money regulations in the EAC.
  • Harmonisation of accreditation and registration requirements for engineering professions to implement Mutual Recognition Agreements.

Find more information on SEAMPEC here.

Operationalisation of One Stop Border Posts


Fast and safe clearances at border crossing points drive the EAC integration process. One Stop Border Posts (OSBPs) introduce the concept of coordinated border management to reduce the time taken at EAC’s internal borders in pursuit of facilitating, movement, integration and trade via open and safe borders. So far, the EAC has completed the construction of twelve OSBPs. In cooperation with EAC-GIZ and other development partners, the EAC developed the regional OSBP curriculum and jointly trained border officers from the different border agencies of neighboring states on how to efficiently and effectively cooperate to operate OSBPs for the goal of enabling EAC integration through coordinated border management.

Projects:

Objective: Establish efficiently and smoothly operating border crossing points via coordinated border management.

Approach: By enabling the operationalisation of the OSBPs within the EAC, the region fosters coordination among agencies and between agencies of neighboring States to speed the clearance processes of people and goods at borders. Following the adoption and construction of OSBP buildings at 15 EAC internal borders, EAC cooperated with GIZ-AUBP to develop the capacities of border officers (customs/revenue authorities, immigration, police, port health, bureau of standards, phytosanitary services, and private actors such as clearing agencies) to enable them to operate the concept of OSBPs. An inclusive approach involving capacity development officers and institutions of EAC Partner States was adopted to create a regional curriculum and disseminate trainings at all border posts. Furthermore, the electronic version of the training has been availed to all officers.

Find more information on GIZ-AUBP here.

AFCFTA


The African Continental Free Trade Area (AfCFTA) is the Pan-African instrument to boost intra-African trade. It aims at creating a single African market by deepening the economic integration of the continent. AfCFTA will aid the movement of capital and people as well as facilitating investment, thereby moving Africa towards the establishment of a future continental Customs Union. Accelerating intra-African trade and boosting Africa's trading position in the global market by strengthening Africa's common voice and policy space in global trade negotiations is being facilitated in the EAC with support of EAC-GIZ.

Projects:

Objective: Framework conditions for implementing the African Continental Free Trade Area are strengthened.

Approach: EAC-GIZ’s AfCFTA component is supporting the EAC in strengthening the EAC preparedness in AfCFTA processes with a focus on:

  • Development and finalisation of the tariff offers for trade in goods and positions on request and offer for their respective schedules of commitment in five sectors – Tourism, Business, Communications, Financial and Transport Services.
  • Negotiations on Phase II issues (Investment, Competition, Intellectual Property Rights) and Phase III issue (Digital Trade).
  • Stakeholders engagement – awareness creation and capacity building for private sector particularly SMEs, traders, young entrepreneurs and civil society as part of the preparation of the implementation of the AfCFTA which started in January 2021.

Find more information on AfCFTA here.

Objective: IRTF supports the private sector in the EAC in its initiatives to promote intra-regional trade and value addition. 

Approach: Projects funded by IRTF promote the engagement of EAC civil society in the AfCFTA by providing improved information about the AfCFTA processes and mobilisation of stakeholders in the EAC to develop their own positions and inputs into the AfCFTA discussion.

Examples of supported projects:

  • The Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) in Uganda is engaging civil society on the AfCFTA in a project to ensure wide-ranging feedback and advocating for a final version of the AfCFTA agreement considering the interests and concerns of farmers, women, the private sector, academia, trade unions and other stakeholders.
  • The Consumer Unity and Trust Society – Centre for International Trade, Economics and Environment (CUTS-CITEE) Nairobi is working to integrate the voices of civil society organisations in EAC Intra-Regional Trade into the AfCFTA.

Find more information on IRTF as part of the SEAMPEC programme here.

E-Commerce


With the AfCFTA, the African Union’s Digital Strategy and the Smart Africa Alliance, African countries have laid the basis for boosting digital transformation and e-commerce on the continent. However, African SMEs have not yet taken up the opportunities of digital transformation and trade. Essential requirements for participation in cross-border digital trade need to be strengthened or established, e.g. e-payment solutions, consumer trust in e-commerce, availability of suitable platforms and coherent regulatory framework conditions. As a result, access to digital trade is still limited and economies of scale have not yet been achieved by producers of African products on a national, regional or Pan-African level. A powerful digital trade ecosystem in East Africa and beyond with its interdependent and mutually empowering determinants will enable companies to efficiently procure and sell goods and services across borders.

Projects:

Objective: Improving the framework conditions for SMEs to participate in cross-border digital trade in selected African countries.

Approach: PeCI aims to improve the ecosystem for companies to participate in cross-border e-commerce. In combination with integrated and harmonised market and trading systems, the necessary trust among consumers will be created to purchase products and services via the respective e-commerce channels. So far, the EAC Secretariat has undertaken an assessment of what is existing in the East African region. This study informs the development of the EAC’s Regional e-Commerce Strategy which is supported by EAC-GIZ. Additionally, PeCI facilitates the development of a regional cross-border Business-to-Business Platform in a sector to be selected to boost digital trade in the region. The programme liaises with SEAMPEC in this regard. EAC and EAC-GIZ are collaborating with UNCTAD which is providing e-trade readiness assessments of EAC Partner States.

Find more information on PeCI here.

RESULTS OF CUSTOMS AND TRADE

Border-crossing points are more efficient, coordinated, and user-friendly, reducing clearance time by nearly 30% for people and goods due to improvement and simplification of customs processes
Engineers, accountants and veterinarians from the EAC can work in Partner States due to Mutual Recognition Agreements
A comprehensive assessment of the cross-border E-commerce ecosystem in the EAC has been compiled depicting opportunities for economic growth
Trading pre-packaged foods across EAC borders is increased following the approval of harmonised criteria for registering and certifying granting them unhindered access to any other EAC Partner State
Preparatory steps for AfCFTA implementation have been conducted including development of EAC AfCFTA offer and regulatory audits

SECTORS