Egos, unfair trade shake EAC as DR Congo eyes entry

 Along came a series of happenings, including trade wars and political disagreements, partly exacerbated by egos between Uganda and Rwanda, Rwanda and Burundi, and now Kenya and Somalia, which is also seeking entry into the bloc. Then the endless trade wars.

It became monotonous to follow and the bloc became a floating object. Some members started defaulting on their financial commitments and the secretariat soon ran of cash to run operations. The 2019/2020 financial year was the worst, with delays in remittance of contributions to the bloc resulting in just 43 per cent absorption of funds by the bloc.

The idea of the bloc having an economic integration dates back to a customs union between Kenya and Uganda in 1917, which the then Tanganyika joined in 1927.

 This was followed by the East African High Commission between 1948 and 1961, and the East African Common Services Organisation between 1961 and 1967, and then the first East African Community started in 1967 but collapsed in 1977 over former president Amin’s bullying of his peers.

The East African Co-operation was revived in 1993 and paved way for EAC in its current form with the first heads of state summit convened on January 15, 2000, in Arusha, Tanzania.

Last weekend’s 21st heads of state summit, attended by Uganda’s Yoweri Museveni, Rwanda’s Paul Kagame, Kenya’s Uhuru Kenyatta, South Sudan’s Salva Kiir, Burundi’s Evariste Ndayishimiye, and Tanzania’s vice president Samila Suluhu, was held virtually owing to the Covid-19 pandemic and its limitations.

The summit, according to a joint communique, among others received the progress report of the council of ministers on implementation of project for the period February 2019 when the heads of state last met to 2021, considered a report on adopting French as a language used in the community, and swore in Kenya’s Peter Mathuki as new secretary general for the EAC Secretariat, and judges of the East African Court of Justice.

The principals also considered an application by neighbouring DR Congo to join the bloc, and further received a progress report on a subject too grandiose but fostered especially by President Museveni—the constitutional development of the East African political federation. They directed the council of ministers to expedite the constitutional development process.

With the ever shifting tectonics in regional economic integration, what are the odds that a political federation is easily attainable in our lifetime?

Political federation, provided for under Article 5(2) of the treaty establishing EAC, according to the secretariat, is the ultimate goal of the EAC regional integration, and the fourth step after the customs union, common market, and monetary union.

President Museveni, who during the 20th ordinary summit of heads of state in 2019, was tasked with overseeing the political federation, often and has variously called for the federation to “start with those who are ready.” 

But as he seeks to extend his hold on power to 40 years, it is not farfetched to think that his desire for a federated EAC is quietly met with both mistrust and disdain.

On shaky ground
Retired ambassador Harold Acemah, a former deputy head of Uganda’s diplomatic mission in Brussels, Belgium, told Sunday Monitor that EAC is not in good health. 

“Some EAC presidents are not on talking terms. The common market is not functioning as planned. Free flow of goods, services and people within EAC is a far cry, unlike during the 1960s and early 1970s when the spirit of being East African was palpable. I believe that there is lack of commitment to East African integration on the part of political leaders of the region,” he says.

Experience from regional blocs elsewhere has showed that functional economic integration is the gateway to possible federating politically. However, with a myriad of problems—political conflicts, including wars, poor infrastructure, anaemic economies surviving mostly on foreign aid—functional integration remains a far cry in the developing world, including Africa.

Forty four African countries in March 2018 signed the Africa Continental Free Trade Agreement (AfCFTA) at the 18th AU summit in 2012, to create a single continental market for goods and services with free movement of business persons and investments, and pave the way for accelerating the establishment of the continental custom.

With 44 countries, AfCFTA is currently the world’s largest free-trade areas but it has a million hurdles, including commitment of members. However, it is hoped that once the free trade area succeeds, it could be a cornerstone for a United States of Africa in the distant future.

Research published by TradeMark East Africa last July detailed that the value of intra-(EAC) regional trade had increased by 60.75 per cent from $3.72b when the common market protocol was kick-started in 2010 to $5.98b in 2018.

TradeMark partly attributed the exponential growth in trade to member countries’ increased predilection to trade with each other to offset tumbling demand for the region’s products in US and European markets.

The research showed that Uganda’s trade jumped by 21.2 per cent to $2.05b from $1.69b; Kenya’s increased by 4.7 per cent to $1.95b from $1.86b in the same period; Rwanda’s increased by 13.4 per cent to $638.8m from $563.2m; and Tanzania’s trade within EAC increased by 14.6 per cent to $811.3m from $707.7m.
But not without major friction. 

Uganda and Kenya have for a while been locked in a trade war in which the latter imposed non-tariff barriers to curtail exports from neighbouring countries. Tanzania reciprocated swiftly, which compelled Nairobi to fall back in line, while Uganda, which has over the years been a supermarket for Kenyan-made products, is cautious to act.

The trade barriers, which contradict the common market commitments, have cost Uganda in excess of $480 million (about Shs1.7 trillion), according to local manufacturers, yet Kenyan exports into Uganda increased from $1.1 billion in 2017 to $1.2 billion in 2018 and 2019.

Kenya and Tanzania are habitual quarrellers, but the two countries have in the last few years reciprocated the hostility, but the Covid-19 pandemic stirred the pot, awakening the trade jabs. From sugar, milk, eggs, confectionery, wheat and other goods, Kenya and Tanzania have squared it out through blockades. 

Uganda and Tanzania have their own issues too. Until last year, Tanzania sparred with Uganda over sugar trade until a deal was reached.

“If EAC is to avoid a repeat of history - collapse of the first EAC which happened in 1977 - the principal beneficiaries of EAC, namely the people and private sector of East Africa must wake up and play an active role in deepening regional cooperation and integration and in finding political solutions peacefully to current problems in bilateral relations between Rwanda and Uganda and to a lesser extent between Kenya and Tanzania,” Mr Acemah says.

Enter DRC
It is the political disagreements that have mostly dealt a blow to the bloc. These often have a geopolitical degree and tend to complicate matters. And with DR Congo being considered to join the bloc, the fireworks will be like never before.
This geopolitics, according to development policy researcher Fred Muhumuza, is what Uganda and EAC should be concerned about.

“If it plays out well the bloc can succeed, but if it fails it will be a disaster,” Dr Muhumuza says.

In 1997, Kampala and Kigali forged a military alliance that oversaw the removal of DR Congo’s Mobutu Sese Seko, and later installed Laurent Kabila as his successor. Seeking to control him as puppet masters, a new war break out, sucking in other African nations, including Zimbabwe, Libya, Tanzania, and Angola.

Uganda and Rwanda later propped up different militia groups, which then led to clashes between the two armies between 1999 and 2001 in Kisangani over the control of strategic locations and mineral. 

The DR Congo sued Uganda at the World Court in 1999 over acts of armed aggression that it said violated the United Nations Charter and the Charter of the Organisation of African Unity, the predecessor of the African Union. 

Uganda, however, lost the case in 2005 when its legal team erred when they submitted to the court as its evidence a report of a commission of inquiry chaired by Justice David Porter, which had implicated senior government officials.

The said report confirmed pillage of DRC’s resources between 1998 and 2001, but absolved implicated top Uganda government and military officials, including President Museveni’s brother Salim Saleh whom a 2001 UN panel of experts named adversely in its report on illegal exploitation of Congo’s wealth.

According to Africa Kiiza, the coordinator for trade policies and negotiations at SEATINI, a budget and taxation advocacy group, DR Congo is not particularly a good idea when there are outstanding issues among the existing members.

“South Sudan is struggling to integrate since it was admitted, so DRC is another problem child,” Mr Kizza says.
Uganda and Rwanda feuded from mid-2017 and climaxed with the latter closing its Katuna border in February 2019. The two accused each other of compromising each other’s national security.

Attempts by Kenyan president Kenyatta to mediate was frowned upon by Kigali as not a neutral party.

 It took president João Lourenço of Angola, which is a member of International Conference on the Great Lakes Region (ICGLR), a 12-member body of countries of the Great Lakes region, together with Rwanda and Uganda, to bring the warring principals to the table.

In the period between August 2019 and August 2020, cumulative export earnings from Rwanda, according to Bank of Uganda, fell to just $5.1m (Shs19.2b) from $131.8m (Shs494b) in the same period between August 2018 and August 2019. The fall represents a Shs493b decline, which Ugandan exporters have lost within one year.

Further down south, Burundi and Rwanda are working on repairing relations but that likely has a long way to go.
 
For long spells Bujumbura has accused Kigali of training rebels and masterminding a failed coup, a charge Kigali denied and also accused Bujumbura of sheltering the FDLR rebels who are accused of committing the 1994 genocide.

From the trade angle, the entry of DRC has been heralded as a positive stride, especially for Uganda and Rwanda. In 2018 alone, available trade statistics show that Uganda’s exports, which mainly include cement, iron and steel, vehicles, beverages, among others, to eastern Congo fetched an estimated $533m with formal trade accounting for a paltry $221m, while informal trade stood at a whopping $312m (Shs1.1 trillion).

Uganda is already nursing ambitions of constructing 223km of road network inside eastern DR Congo to boost this trade and also atone for its past sins when top officials pillaged the country’s wealth, a matter that is before The Hague-based International Court of Justice. 

Attorney General William Byaruhanga told the Committee on Legal and Parliamentary Affairs in January, 2020, that although they were trying to negotiate, Kinshasa had proposed $23b (Shs85 trillion) as the reparations while Uganda was offering $150m (Shs558 billion).

Given DR Congo’s side, Paul Lakuna, a research fellow at the Economic Policy Research Centre at Makerere University, said  DR Congo’s entry into EAC is “good business,” but it also comes with the baggage of insecurity, conflict and uncoordinated poor infrastructure.

Previous experiences have showed that when Congo sneezes, almost the entire region catches a cold. With the country’s admission considered when the bloc’s tectonics are always shifting optimism and pessimism are default settings.

The silver lining, Mr Acemah says, “One cardinal lesson which East Africans learnt from the collapse of the original EAC in 1977 is that, we are better off with, than without EAC. The partner states and peoples of East Africa have more in common than their differences.”

Additional reporting by Ismail Musa Ladu