CHALLENGES AND PROSPECTS OF AFRICAN REGIONALISM: THE EAST AFRICAN EXPERIENCE BY STEPHEN TUMWESIGYE KASHURE THIS DISSERTATION IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AW ARD OF THE MASTER OF ARTS DEGREE IN INTERNATIONAL AFFAIRS. LEGON NOVEMBER 2004 DECLARATION 1, Stephen Tumwesigye Kashure, hereby declare that this dissertation is the result of an original research conducted by me and that it has not been submitted elsewhere, wholly or partially, for any other purposes. References'1O other materials have been duly acknowledged. Stephen Tumwesigye Kashure Prof. K. Boafo-Arthur (Student) (Supervisor) . ~ .............. . ..... ~ ....... . Signature Signature Date ?-I It ~(QS- ij DEDICATION TO My parents Sezi Kashure and Jairesi Numwobaruga, my brother Obed, wives Kemba and Dorah. and finally my sweet children Stephen Onr) JJ, Philip, Timothy, Kiki and little Elijah (Jiija). iii ACKNOWLEDGEMENTS I wish to acknowledge all those who assisted me in one way or another to complete this dissertation. First of all, I wish to thank the leadership of the Uganda Peoples' Defence Forces (UPDF) for giving me an opportunity to come to Ghana to study, which has enabled me to pursue this Master of Arts degree course. I pay my tribute. I am highly indebted to my supervisor, Prof K. Boafo-Arthur for being available to me all the time and tirelessly working with me in spite of his other commitments. Sir, you have been a parent to me. My sincere thanks go to the leadership and administration of the Ghana Armed Forces Command and Staff College (GAFCSC), for allowing me to stay at the College for the whole period I was conducting research and writing this dissertation. I ani grateful for the library facilities extended to me at the Kofi Annan International Peace Keeping Library. To my parents, Sezi and Jairesi, I say thank you for your prayers and encouragement. Wilbert and Jennifer Kaahwa, thank you so much for sending me vital EAC material even when you did not know me. God bless you. I cannot find words to thank Obed who shouldered the burden of my family for more than a year while I was away studying. All those who missed me, I thank you, most especially my children and their Maamas. I thank you for the support you gave me throughout the long period. The ultimate responsibility for any faults is entirely mine. '\.~~ .. ~. i~~ iv ABSTRACT The contemporary international system is characterised by a heightened tendency of state units to gravitate towards some degree of integration. Regionalism is gradually being inextricably linked to economic development. The establishment of the European Economic Community in 1957 has resulted in the mushrooming of cooperative arrangements the world over including the North American Free Trade Area (NAFTA), the Association of South-Asian Nations and the Caribbean Free Trade Association, among others. The strategy of regionalism in Africa was given new vitality in April 1980 with the adoption of The Lagos Plan of Action (LPA) and the Final Act of Lagos (FAL) in which leaders hoped to create an independent African economy through sub regional and regional organisations. An African Economic Community is expected to be in place by 2025. This study explores the challenges and prospects of the East African Community (EAC) as one of the building blocks of the African Economic Community. The EAC is taken as an illustration of efforts to establish effective regionalism in Africa, the problems along the way and what the future holds for African integration. It concludes that regionalism is, indeed, an imperative for African development especially now that even the industrialized world is embracing integration as a strategy for further development. Africa risks irreversible marginalisation if its small and poor countries remain fragmented. The hope is in pooling markets, populations and resources to tap economies of scale. v TABLE OF CONTENTS Page Title Page ..................................... ·.· .. ······· ............. .. Declaration .............................................................. . ii Dedication ................ , ... , ........ , ........... , .................... . iii Acknowledgement ............... '" .................................. .. iv Abstract ................................................................ .. v Table of Contents ........................................................ . vi - viii CHAPTER ONE: RESEARCH DESIGN 1.1 BACKGROUND TO THE PROBLEM 1.2 STATEMENT OF THE PROBLEM AND SCOPE OF THE RESEARCH 4 1.3 OBJECTIVES OF THE RESEARCH 6 1.4 RATIONALE OF THE RESEARCH 6 1.5 HYPOTHESIS 6 1.6 THEORETICAL FRAMEWORK 6 1. 7 LITERATURE REVIEW 8 1.8 CLARIFICATION OF CONCEPTS 15 1.9 SOURCES OF DATA 18 1.10 ARRANGEMENT OF CHAPTERS 18 1.11 LIMITATIONS OF THE RESEARCH 19 CHAPTER TWO: THE EAST AFRICAN COMMUNITY 23 2.1 INTRODUCTION 23 2.1.1 PROFILE 23 2.1.2 PHASES OF THE INTEGRATION PROCESS 24 2.1.3 HISTORICAL OVERVIEW 25 vi 2.2 THE RELEVANCE OF REGIONAL INTEGRATION TO EAST AFRICA 28 CHAPTER THREE: 37 CHALLENGES AND PROSPECTS OF THE EAST AFRICAN COMMUNITY 3.1 INTRODUCTION 37 3.2 CHALLENGES TO EAST AFRICAN INTEGRATION 39 3.2.1 EXTERNAL CHALLENGES TO EAST AFRICAN INTEGRATION 41 3.2.1.1 COLONIAL LEGACY 41 3.2.1.2 INTERNATIONAL FINANCE INSTITUTIONS 44 3.2.1.3 FALLACY OF TR.ANSPOSITION 45 3.2.1.4 THE CHANGING GLOBAL ENVIRONMENT 47 3.2.2 INTERNAL CHALLENGES TO EAST AFRICAN INTEGRATION 49 3.2.2.1 LACK OF COMMITMENT FROM GOVERNMENTS 50 3.2.2.2 LOSS OF REVENUE 52 3.2.2.3 OVERLAPPING MEMBERSHIP 56 3.2.2.4 LACK OF ECONOMIC CONVERGENCE 59 3.2.2.5 COMPENSATION ISSUES 60 3.2.2.6 LACK OF PRIVATE SECTOR PARTICIPATION 61 3.2.2.7 LACK OF POLITICAL CONVERGENCE 62 3.2.2.8 CHALLENGES OF DEVELOPMENT IN EAST AFRICA 63 3.2.2.8.1 Economic Challenges 63 3.2.2.8.4 Technological Challenges 63 3.2.2.8.5 Challenges Identified in the Development Strategy 2001-2005 64 Institutional Inertia 64 Decision Making Process 64 Sequencing of Activities 64 Resource Constraints 65 Restructuring and Privatisation 65 Managing Distribution of Costs and Benefits 65 3.3 PROSPECTS OF THE EAC 66 vii CHAPTER FOUR: SUMMARY OF FINDINGS, CONCLUSIONS AND 76 RECOMMENDATIONS 4.1 SUMMARY OF FINDINGS 76 4.2 CONCLUSIONS 83 4.3 RECOMMENDATIONS 85 Investment by Local Entrepreneurs 85 Political and Economic Stability 85 viii CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE PROBLEM There has always been a desire to unite Africans at home or in the Diaspora. Pheko states that following the dark cloud of slavery and colonialism in Africa, visionary African leaders realised that it was imperative that all Africans - wherever they might be - should unite to end their "holocaust" which began with the 'European Renaissance' in Italy in 1400. In 1900, Sylvester Henry Williams, a lawyer of African descent, named this coming together of Africans 'Pan-Africanism'. According to Pheko, Pan-Africanism as a movement began in 1776. He adds that it was the fifth Pan-African Congress held in Manchester, England, in 1945 that advanced Pan-Africanism and applied it to the decolonisation of the African continent politically. Some African leaders involved in this noble cause were giants such as Kwame Nkrumah, William du Bois, Jomo Kenyatta, Robert Sobukwe and Patrice Lumumba. I Regionalism, like Pan-Africanism, is among several efforts by Africans to come closer to one another as a people of common ancestry, similar aspirations and a shared destiny. In agreement with Pheko's view, Cleland states that by the 19th Century, the nationalist stirrings in Africa had culminated in the convening of the first Pan-African Conference in 1900, in London which was attended by Africans mostly living in Europe. Serious attempts at continental unity commenced from the late 1950' s through the 1960s.2 Ihonvbere points out that the theme of African unity has been the same theme for all the Pan- African conferences since 1900 and it was the theme of countless meetings and conferences organized by the OAU and other bodies. Yet, Africa and Africans are very far from the goal in spite of thousands of pages in declarations and the adoption of 3 countless charters. Towering figures including Edward Blyden, George Marcus Mosiah Garvey, George Padmore, Obafemi Awolowo, Peter Abrahams and others relentlessly championed Pan-Africanism but this ideal has remained elusive. Nye aptly sums up that 'unity' is a short word for a long process. He cites a popular slogan in East Africa 'Uhuru na umoja,' which is Swahili for 'Freedom and unity.' Most politically minded people in . . 4 East Africa professed belief in Pan-Africanism as an ideology 0 f mtegration. Cleland further points out that towards the latter part of the 1940s the nationalist tempo had become more pronounced with African leaders turning their attention away from pan-Africanism to the struggle for independence within their colonial boundaries. He points out the emergence of different groupings namely the Monrovia Group led by Nigeria and Liberia against the Casablanca group championed by Ghana and Guinea. This complicated the initiatives towards unity.s The former group were the 'gradualists' while the latter group advocat,?d a continental government right away. Adedeji observes that the vision of Pan Africanism has always been very popular in Africa as it makes good economic and political sense. The lack of political commitment by the African leadership has, however, been the main impediment.s Political liberation in Africa was the harbinger of economic integration and union which found eloquent articulation with the emergence of Ghana as the first black independent state in sub-Saharan Africa in 1957. After independence, one of the options for the sovereign, independent countries to work together was through regionalism or integration as the two terms are used interchangeably. The two terms are not the same though. Babarinde asserts that, Africa should pursue a pan-African regional economic integration, not as an alternative to, but as a facilitator of its development. Economic integration of the continent is a sine qua non for the development of Africa. According to this view, such a holistic strategy would alleviate some of the burdens of Africa and provide the basis for the development of the continent. The culmination of that discourse was the commitment by the Organisation of African Unity (DAD) and its members at the Abuja Summit to establish an African Economic Community (AEC) in a matter of 34 years. 7 Article 4(2) (a) of the Abuja Treaty provides for the 'strengthening of existing regional economic communities and the establishment of other communities where they do not ~xist.' This shows the realisation by the leaders that a pan-African economic community IS not easy to achieve; rather, it will be the sub-regional groups such as the Economic 2 Community of West African States (ECOWAS), the Common Market for Eastern and Southern Africa (COMESA), Arab Maghreb Union (AMU) or the East African Community (EAC) that will build the larger entity. Asante recognises that one of the prominent features of the contemporary international system is the heightened tendency of some states to gravitate towards some degree of regional integration. He observes that nowhere in the world today do policy makers and economists tackle any problem of economic development without first taking into consideration theories of integration both at home and abroad. Quoting Haberler, Asante refers to the post -World War II period as the 'era of integration'. Developing his argument, Asante links the concept of regionalism with development and emphatically states that the process of regionalism is now inextricably linked to that of economic development. He continues that against this background, the 1950s and the 1960s saw the idea of political and economic integration becoming attractive to political leaders of the Third World. Progress towards integration is linked to the post-World War period, which culminated in the establishment of the European Economic Community (EEC) in 1957. In emulation, regional cooperation movements have mushroomed in Latin America, Africa and Asia. 8 Among the numerous regional movements in Africa referred to was the East African Community which came into being in 1967 to formalise the common arrangements that 9 had existed in East Africa. The Community's objectives, on signing of the Treaty, were ambitious and challenging: widening and deepening economic and social integration with the ultimate aim of creating an East African political federation. lo The East African Community collapsed in 1977 due to, among others: the variability of economic policies then pursued by the member states, the change of Government in Uganda in 1971, the continued perception of disproportionate sharing of benefits accruing from economic integration and the lack of adequate compensation mechanisms to address the situation, and the exclusion of civil society and the private sector from participating in co-operation activities. I I 3 Regionalism is recognised as being an imperative to Africa's development but the expen.e nce, as seen m. th East Africean sub-re,gion has not been rosy. The challenges facing the coming together of African people are enonnous but not insunnountable. Nassali happily notes that, on November 13th 1993, the three countries signed an agreement for the establishment of a Tripartite Commission for Cooperation. The East African Community was revived on 30 November 1999 when a treaty re-establishing it was signed in Arusha, Tanzania. The Treaty for the East African Community came into th force on July 7th 2000, and the revised institution was officially launched on January 15 2001. 12 Yet again, the leaders were "convinced that cooperation at the sub-regional levels in all fields of human endeavour will raise the standards of living of African peoples". 13Such is the background to the problem under study. 1.2 STATEMENT OF THE PROBLEM AND SCOPE OF THE RESEARCH The Food and Agricultural Organisation (FAO) reports indicate that despite their multiplicity, African regional groupings have not been very effective. Cited among them are those fonned under the Lagos Plan of Action (LPA) and those which do not fall in the LPA arrangement. 14 Yet Goldstein and Ndung'u show that regionalism is now widespread in sub-Saharan Africa with the hope of addressing common challenges like improving economic policy, reducing poverty, and managing the process of Iiberalisation. They make a case for pooling fragmented markets and promotion of intra- regional trade as a vehicle for economic growth and development. They see attempts to revive the EAC as a way of supporting industrialisation and economic refonns that may spill over to neighbouring countries. IS Khabele writes, ..... one of the key aspects of the social science discourses in Africa has revolved mainly around regional cooperation in the continent. At the heart of this debate that still rages today is precisely how the continent can reposition itself strategically in such a manner that regionalism becomes 4 one of the engines of sustainable development for states concerned and how then the continent could respond effectively to globalisation through pooling sovereignty as well as driving the development agenda through supranational institutions.,,16 This passage fairly summarises the problem under study. East African leaders like elsewhere in Afiica, as Nye puts it, differed only on when they expected to see Africa united, not on whether Afiica would be united. He goes ahead to show how they were not very sure of how they would unite: Obote saw East Africa as "a part of a bigger body of alJ Africa"; Nyerere described Afiican nationalism as "meaningless, anachronistic and dangerous ifit is not at the same time Pan-Africanism.,,17 Nye goes on to show that the nature of unity to be achieved is not particularly clear. In Kenya, Fred Kubai, a parliamentary secretary, felt it would mean a common market with political cooperation; Solomon Eliufoo, Tanganyika's Minister for Education aspired to a federation of Afiica while George Magezi, Uganda's Minister of Housing and Labour felt that success depended on "quick acceptance of a timetable for joining states." Mwai Kibaki saw areas where it was best to start with all Afiica as a unit but it looked quite obvious to him in promoting the 'political unification' of Africa the regional federation approach was the most practical. 18 This is just like the uncertainties that preceded the OAU. Leaders seem not to be sure of what unity they are working towards; whether it would be a common market, a federation or something else. This study looks at regionalism as being, indeed, crucial to African development but at the same time explores the East African experience to illustrate that the road to achieving effective regionalism is rather bumpy. As leaders and scholars alike advocate for greater regional organisations, they need to pause a moment to digest what has so far transpired on the continent before they embark on new ambitious integration. Whereas it is not purely smooth for regionalism, there is a silver lining to the cloud of disintegration. That is why the East African states found it worthwhile to come together again despite having falJen apart in 1977. The study sets out to identify what it is that attracts countries in 5 Africa to gravitate towards each other in spite of the chequered history regionalism has had in Africa. 1.3 OBJECTIVES OF THE RESEARCH This study sets out to attain the following objectives; a. To show how events in the international arena have given rise to the increased drive towards greater integration in Africa. b. To critically analyse the argument that regionalism is indeed crucial to economic growth and development in Africa. c. To identify, highlight, and examine the challenges and prospects of the EAC over the years. d. To come up with recommendations as to how best Africa can embark on effective regionalism. 1.4 RATIONALE OF THE RESEARCH This research is being undertaken to contribute towards the ongoing efforts at perfecting regionalism in Africa. More particularly, the research is motivated by the desire to see the EAC succeed as a move towards an integrated Africa. 1.5 HYPOTHESIS Despite the challenges confronting regionalism in Africa, it still remains one of the most viable options to re-Iaunch development and improve the economy on the continent. 1.6 THEORETICAL FRAMEWORK This research is guided by the theory of Liberalism which first emerged in France in the 17th century. It is associated with thinkers like Francois Quiesney (1694-1774) and A.R.J Turgot (1727-1781). They criticised mercantilist policies that involved heavy taxes, price 6 fixing and policies aimed at maxl.l m.s,m g t h e excess of exports over imports on the . wth 19 grounds that they stifled free initiative and hindered economic gro . Today regionalisation of Africa appears to be an aspect of a process towards liberalising of markets.2o The Theory of Liberalism explains growth of a nation's wealth as a natural process which does not require management by the state. The goal of the East African Community is ultimately to make the three countries borderless. Mwai Kibaki the current Kenyan Head of State said, " ... regional integration is made a myth by our detractors but we shal1 overcome al1 doubts, and we will make it easy for our people to cross borders to trade and socialise.,,21 In a related spirit, Yoweri Museveni of Uganda urged the East African countries of Kenya, Uganda and Tanzania to expedite economic and political integration in the region by means of removing the "cultural mutilation" brought about by colonial boundaries. He added, "as long as the boundaries still exist, we shall respect them, but we political leaders are capable of removing them. ,,22 This is in agreement with Adam Smith's conviction that national wealth would naturally keep growing provided that economic processes are allowed to operate freely, without the interference of such artificial barriers as govemmental1y imposed limitations, among others.23 Nagle says Smith belonged to the Manchester liberalist school and reviews his Wealth of Nations in which Smith describes the 'invisible hand' of the market place. In interpreting the book, Nagle says Smith called for limited government, one that could guarantee the sanctity of contracts, maintain law and order and a stable currency, but little else. The affairs of the economy were best left to the judgement of entrepreneurs and consumers; two of the characteristics of liberal democracy in capitalist economies have historically been the separation of political rights, and the reluctance of government to infringe on the rights of property. Through the 'invisible hand' of the market place, the aggregation of individual self-interest ends up to be the optimal social outcome as well.24 It is in this Liberal theoretical framework that the study is being conducted. "All the three member states now ascribe to economic policies that are pro-market, pro-private sector and pro- liberalisation. In the social area, the three countries are also encouraging participation of their peoples in decision making. This commonality of both economic and social policies 7 of the member states is in confonnity with the current international trend which is supportive of regional co-operation.,,2S 1.7 LITERATURE REVIEW This research reflects on the challenges and prospects of African regionalism with East Africa as an illustration. Asante tackles the subject of regionalism in Africa's development in the light of expectations, reality and challenges. In his introductory remarks, he notes that regional integration is not new. He indicates that interest in regionalism has been revived in both developed and developing countries. He attaches renewed interest in regionalism to the Uruguay Round which precipitated a world trade system that is gravitating towards regional trade blocs aligned around the European Union (EU), the United States and Japan (the triad). He argues that if trading blocs become a reality, poor non-member countries like those of Africa will suffer. He recognises that a global consensus has emerged on the need for closer regional cooperation and integration in Africa if the continent is to face up to the contemporary challenges.2s Asante traces the first wave of regionalism to the creation of the European Economic Community (EEC) in 1957. The background to this was the European Coal and Steel Community (ECSC) established in 1951. Following this, the 1960s and 1970s recorded the mushrooming of free trade areas and customs unions in Africa and Latin America. He identifies the motive behind regionalism in developing countries as the search for industrialisation through import substitution. Asante further notes that the increase in intra-regional trade was merely modest and it actually declined in the 1970s leading to stagnation in the 1980s. Ambitious industrialisation plans could not be implemented. 26 Clearly, regionalism in Africa got off to a difficult start and what is said here is true for East Africa too. The second wave of regionalism in Africa came on the scene in the 1980s despite the . . 27 negative expenences. Trade remained the main element of integration. Asante argues 8 that regionalism was back "with a vengeance" because it provided protection of the interests of smaller nations, particularly those of Africa. Africa risked being swept completely aside by the fast moving current of world growth and structural transformation. Asante does not believe that fragmented, balkanised, independent and sovereign entities can be taken seriously as important and effective partners in the global economy. He sees integration in Africa as the way forward to enable the continent meet s the challenges of "the brave new world ofregionalism".2 Asante explores the experience of African regionalism over the years and identifies some "interlocking problems" responsible for "the disappointing results of the process of economic integration in Africa".29 He questions the appropriateness of market integration in Africa. Asante argues that integration in Africa must start with the recognition that Africa lacks most of the prerequisites necessary for integration to take place. These include economic homogeneity, sustained economic growth and political commitment. African customs unions were based on the European experience of market integration which was inappropriate. 3o One of the reasons that led to the break up of the EAC in 1977 was absence of homogeneous economies. Nye writes, "Tanganyika had a sense of economic backwardness and comparative disadvantage in relation to Kenya".31 Other problems that Asante highlights are related to the management of regional economic integration. Governments do not offer the commitment required to drive regionalism forward. He recognises the primacy of African governments in implementing the treaties. Member countries independently develop their own strategies with regional cooperation hardly reflected in them. Regional schemes are not a result of economic viability but merely for the sake of political alliance and friendship. He illustrates this point by referring to the failure of the Senegambia Federation and the collapse of the EAC after the coups d'etat in Gambia and Uganda respectively. Lack of political commitment affects budgetary contributions and explains low level of participation in meetings as well as failure to implement protocols. Associated with this are inadequate institutions and mechanisms needed to cater for integrative activities at the national and regional levels. Asante identifies lack of participation of interest groups or the private 9 sector as a serious impediment to regionalism. Unlike in the EU, regional integration in Africa is propelled by governments and not the interest groups like the steel workers or the postal unions. 32 Asante looks at the 'new challenges to African regionalism' among which is the establishment of larger, stronger and more cohesive trading and economic blocs. The EU is being expanded and consolidated as well as NAFTA . In Asia, similar efforts are taking place where the Asia-Pacific Economic Community (APEC) is taking shape stretching from New York to Bangkok and from Chile to China. The emergence of other regional economic blocs in North America and the Pacific Rim will diminish Africa's access to export markets. This will further marginalise Africa. He asserts that integration moves in Africa stop at rhetoric, declarations, and resolutions but do not practically translate into joint economic programming, production, or projects. The Lome Convention between the ACP and the EU is seen as a move towards perpetual dependence on former colonial masters. The Lome system, according to Asante, is obsolete and irrelevant to Africa. Decades of privileged ties have nothing much to show towards development. International finance institutions, such as the World Bank and the IMF, impose programmes which are not favourable to regionalism: one such programme is the Structural Adjustment Programmes.33 Summing up discussion on problems, Asante classifies challenges to regionalism as being internal and external. Integration of African economies involves three related dimensions according to Asante: the integration of physical and institutional structures, of production structures, and of African markets. In his discussion of the future to regionalism in Africa, he calls for opening of lines of communication between the member states. Emphasis is placed on improvement of rural infrastructure and development of road networks, railways, energy, and so on. Asante does not quite clearly show how this can or should be done. Links between the primary and secondary sectors is advocated. Agriculture and industry could be linked as well as mining and manufacturing. On markets, Asante calls for the addressing of the cumbersome tariff and non-tariff obstacles to intra-regional trade in order to liberalise and expand the market However he noted that h' . th.. " ac levmg IS IS not lO like turning on a switch. Some of those tariffs are the main sources of revenue for most African governments.34 He proffers suggestions ranging from training, harnessing information to enhancing south-south cooperation. These suggestions are good but how they can be achieved does not come out quite clearly. Looking at other authors may help us understand the subject better. Contributing to the subject of regionalism in Africa, Konings and Meilink argue that it has acquired new relevance and urgency partly because of the demise of the Soviet 3s communist ideology and the opening up of markets in Eastern Europe. They trace regional economic ties to the long-distance trade throughout Africa that existed before the Europeans arrived. They note that colonial powers organised some economic activities on a regional basis. One of these arrangements was the East African Common Services Organisation that comprised of Kenya, Uganda and Tanzania. The authors recognise Africa's failure to unite after most countries became independent. They see Nkrumah, Sekou Toure. Modibo Keita, Cheikh Anta Diop on the side of immediate integration with Felix Houphouet-Boigny, Jomo Kenyatta and Leopold Senghor on the other side of those anxious to preserve the newly acquired sovereignty. Konings and Meilink state that regionalism has been difficult to resist politically where leaders wish to act in concert in order to enhance their bargaining position.36 However, these authors note that regionalism in Africa took off from a wrong note as noted hereunder. Regional integration efforts, like. the Union Douaniere et Economique de l'Afrique Centrale (UDEAC), were based on schemes introduced by the former colonial powers. The East African Community (EAC) had its roots in the British colonial period. This promising scheme collapsed within a decade because of dissatisfaction with the distribution of benefits of integration. Tanzania and Uganda felt the arrangements benefited Kenya and the emergence of Idi Amin in Uganda disrupted the meeting patterns of the Community. Capitalist Kenya and socialist Tanzania made cooperation difficult. The ties with Britain maintained by all the three countries further diminished the h f· . n c ances 0 mtegratlon. These authors attempt to show reasons for failure of regional schemes in Africa on top of what has been highlighted so far. 11 Konings and Meilink show that the World Bank in 1989 estimated official trade among Sub-Saharan African countries at only 6 per cent of total African trade. Like Asante, the authors cite lack of political commitment and administrative expertise as major stumbling blocks to regionalism. Division on major political and ideological issues, clinging to sovereignty and control of economic policies add to the body of problems regionalism is facing in Africa. What they add is that in Africa, there is proliferation and overlapping schemes which are not coordinated, resulting in duplication of functions and multiple memberships. They too indicate that African economies are not conducive to integration let alone the poor infrastructure. African economies are not complementary, producing the same range of primary commodities exported to the industrial world leaving little room for trade among themselves.38 The authors see light at the end of the tunnel in the continued efforts towards greater regional integration. The Abuja Treaty of 1991 is expected to be followed by the fonnation of an African Economic Community. The trend of regionalism is moving away from trade arrangements per se towards broader goals, including sectoral coordination, policy harmonisation and regional infrastructural frameworks. In these new trends, the ECOWAS has revised its Treaty (1993), the PTA has transfonned itself into COMESA and SADCC has changed to SADC. SADC is to move to greater trade liberalisation through tariff and non-tariff barrier reduction.39 Aryeetey and Oduro too added their thoughts to the debate on challenges and prospects of regionalism in Africa. Aryeetey and Oduro see challenges in what they call features of regional integration in 4o Africa. They decry the large number of regional units on the continent that has led to membership of individual countries in more than one regional unit, yet, there is a variety of objectives. Constraints to intra-African trade comes about as a result of deficient physical infrastructure (transport and communication), lack of institutional infrastructure (~ommoditY exchanges and clearing houses), lack of adequate infonnation on products, high uncompetitive prices of African products and instability of supply. Related to these are: payment difficulties, lack of export and trade credit facilities and inadequate 12 marketing and distribution channels. Other challenges are similar to what was discussed by Asante above. They add unclear perception about gains, border controls and lack of information within partner countries about the existence of potential buyers and sellers in other partner countries as well as inconvertibility of member currencies. These two authors do not bother to suggest the way forward which brings us to review the work of 41 Arthur Hazlewood who takes us through integration and disintegration in Africa. Most of what Hazlewood identifies as causing disintegration has already been discussed in the works we have so far seen. However, he notes that populations in Africa are extremely small with very low incomes; the market for manufactures is small in most countries. He observes, U ••• the present cash market of most African countries individually is not larger than that of a moderately-sized European town".42 Total national income is distributed over a large geographical area and the market is geographically fragmented. He mentions the duplication of productive units as a serious problem. Another difficulty arises from the tendency of the market mechanism to work in a disequalising manner. If the market forces are allowed to freely operate within a tariff- free area, the benefits are likely to be unequally distributed between the associated states. Some countries may even lose from integration, although the area taken as a whole benefits. The losers will not long continue voluntarily to adhere to such a union. On political union, Hazlewood believes that it is not possible to sustain a political association if it were impossible to sustain the more limited measures of economic association. Disagreement on non-economic issues like who will be the Commander- in-Chief of the Armed Forces might become so politically explosive as to put agreement even on a modest economic cooperation in serious jeopardy. Hazlewood does not advocate for political integration before economic integration. Hazlewood zeroes on East Africa and identifies what he sees as trends to dissolution. The year 1965 saw decisions that were interpreted as the 'death knell of the East African Common Market,.43 Because of what has been largely discussed above, one thing led to another. The common currency was dissolved with each country establishing its own central bank. In a chapter by Catherine Hoskyns, the failure of the EAC is attributed to 13 the instability of the new states, the tendency of national politics to be built around 'heroes' jealously guarding their own power, total dependence on the outside world which limited freedom of action and their economic usefulness to one another. The hope for regionalism, as seen by Hoskyns, lies in the sense of solidarity born of racial consciousness and the search for dignity fathered by pan-Africanists like Nyerere, Nasser, Nkrumah and Padmore. This leads us to review Nye's work on Pan-Africanism 44 and East African integration. Nye asks how Africa should integrate. He recalls that in much of man's history of integration, force was the answer. He had in mind experiences like that of Germany under Prince Otto von Bismarck and Italy under Giuseppe Garibaldi. He notes that Europe has captured the imagination with new methods of integration. Journalists, theorists and African leaders have all generalised from the European experience. But the heavy coat of European theory needs alteration before it can be worn in African climates. He argues that it is not applicable to East Africa. He goes on to state that integration in East Africa was driven by ideology and the elite but not the economic imperatives or interest ~oups. This made sense because in the new states, it was necessary to make decisions in a conducive ideological and political framework in which interests were guaranteed. However, it cannot be assumed that ideology is always favourable to integration; it may exacerbate divisions by accentuating differences. Indeed, this was its role in East Africa. The effects of ideology were sometimes ambiguous but one had to pay attention all the 4S same. Nye argues that East Africa could not socially integrate because the limits on the ability to communicate and respond were much greater during the abortive attempts to unify East Africa in the 1920s. Political integration was not possible because oflack of a single nationalist organisation. Failure to integrate economically is partly blamed on political and administrative problems like location of industries or offices and the failure to federate. Nye does not attempt to look at the prospects of regionalism in East Africa. This review so far shows that there is little written about the new East African attempt at integration. This study therefore is dedicated mainly to the new efforts at reviving the EAC since the early 19905. This study therefore explores the challenges the organisation 14 is likely to face, judging from earlier experiences in East Africa and elsewhere. This leads us to the clarification of some of the concepts in the study. 1.8 CLARIFICATION OF CONCEPTS REGIONALISM Regionalism is a concept that has different meanings to different scholars in different disciplines. We may get a working definition from Mark Malan: Traditionally, regionalism implies co-operation among states in geographically proximate and delimited areas for the pursuit of mutual gain in one or more issue areas. In most of the successful examples of regionalism, states that are already partners in solid political processes (based on shared and complementary values) devolve collective decisions to structures that supplement, rather than supplant, national institutions. While regionalism may lead to the creation of new political organisations over time, regionalism and state strength do not stand in opposition to one another, and states remain the essential building blocks from which such arrangements are constructed.46 Quoting Sander, Jilberto and Mommen state that, "regionalism is almost 'by definition' discriminating against non-members of a trading bloc. Regionalization can be defined as an integration process on the regional level with the help of governments".41 Asante writes, "So far no single definition of 'integration' has gained widespread acceptance among integration theorists. The concept has therefore provoked considerable discussion and debate in economic and political literature,.48. Jovanovic says, "Definitions of international economic integration are often vague and do not offer adequate tools for the easing of the process of integration among countries. . .. This all makes integration more of an evolving and continuing process than of a limited one. International economic integration is a process by which the firms and economies of separate states merge in larger entities."49This study adopts Robson's definition, 15 "Economic integration is basically concerned with the promotion of efficiency in resource use on a regional basis. Necessary conditions for its fullest attainment include: the elimination of all barriers to the free movement of goods and factors of production within the integrated area; and of discrimination on the basis of nationality amongst the members of the group in that respect".so Nye identifies political integration as "the process leading to a political community, a condition in which a group of people recognises mutual obligations and some notion of a common interest.,,51 He adds that a political union is related to power structure embracing armies, police forces, budgets and communication networks. Asante advises that there should be no semantic confusion arising from the term 'integration'. Quoting Haas, Asante says that the study of regional integration is not the same as the study of regional cooperation. The former is concerned with explanations of how and why states cease to be wholly sovereign, how and why they voluntarily mingle, merge and mix with their neighbours so as to lose the actual attributes of sovereignty while acquiring new techniques for resolving conflict between themselves. 52 The term "economic cooperation" will mean, "Joint activity across national frontiers, for the purpose of cooperation in economic matters, from running a joint regional airline, coordinated rail system to the joint management of river basins. ,,53 Regional cooperation, according to Asante, may help to describe the way to regional integration. EAST AFRICA "East Africa" in this study means, "the United Republic of Tanzania, the Republic of Kenya and the Republic of Uganda and any other country granted membership to the Community."s4 Area covered is ''Tanzania 945 087 sq lon, Kenya 582,650 sq Ion and Uganda 236,040 sq km. Total area is 1,763,777 sq lon. Population: Tanzania 36,588,225, Kenya 32,021,856, Uganda 26,404,543 Total population: 95,014,624".55 East Africa is bordered to the East by the Indian Ocean and Somalia. To the North it borders with Ethiopia and Sudan. The Democratic Republic of Congo lies to the West. Rwanda and Burundi have not yet joined the Community; therefore these too are to the West. Zambia 16 th S th More precisely, and Malawi are to the South West while Mozambique is in e ou . East Africa can be presented in a table as follows: EAST AFRICA: LAND AND CLIMATE INDICATOR UNITS COUNTRY PARAMETERS SU 30"N 4u 30"S Latitude Degrees KENYA 0 TANZANIA 1 29"S120S UGANDA 4° 12"N 1°29"S EAST AFRICA S° 30" N 12° S 33u SO"E 41 u Longitude Degrees KENYA SO"E TANZANIA 29° E 41° E UGANDA 29° 34" E 35° 0" E EAST AFRICA 29° 34"E 35° 0" E Total Surface Area SquareKms KENYA 581.7 {Excluding water ('000) TANZANIA 883.1 bodies UGANDA 197.1 EAST AFRICA 1,661.9 Nonnal Rainfall mmlyear KENYA 418.5 ~ 1,922 Ranges TANZANIA 200 ~ 2,000 {Min&Max UGANDA 750 ~ 2,000 EAST AFRICA 200 -2,000 EAST AFRICA DATABASE OCTOBER 2003 Source: Partner States56 ECONOMIC INTEGRA nON Economic integration is the process by which a group of countries agrees to eliminate barriers between their economies and proceeds to combine the economies to form a larger economic space. It involves the ceding by member states of sovereignty over particular economic policies, instruments and activities to a regional authority or institution which 17 exercises its power at the group level. In theory, economic integration arrangements can take a variety of fonns which range from a preferential trade area (PTA), to a free trade . . 57 area (FfA ), a customs union, a common-market, and an economIC umon. 1.9 SOURCES OF DATA The study relied mainly on library research from the Kofi Annan International Peace Keeping Centre at Teshie, Otu Barracks and the Balme and Legon Centre for International Affairs (LECIA) libraries at the University of Ghana, for its source material. The source materials included books articles, and various journals. Official documents and East African publications were availed by the kind assistance of the East African Secretariat, Arusha and the Uganda Peoples' Defence Forces EAC Desk Office at the General Headquarters, Bombo in Uganda. The Internet too provided another very important source. 1.10 ARRANGEMENT OF CHAPTERS This research is presented in four chapters. The first chapter deals with the research design consisting, among others, of the background to and statement of the problem, research objectives, hypothesis, literature review, theoretical framework and clarification of concepts. The second chapter analyses the international system in the drive towards greater integration and what this means to Africa with emphasis on the East African Community. The chapter examines the argument that regionalism is indeed crucial to Africa's economic growth and development. The third chapter covers the challenges to the EAC over the years as well as prospects for the future. Chapter Four is the summary of findings, conclusions and recommendations. 18 1.11 LIMITATIONS OF THE RESEARCH Regionalism is such an important topical and interesting issue that it cannot be adequately covered in a ninety-day research period. Furthermore, the research findings cannot be comprehensively expressed within the limits of 20,000 words. Consequently, the constraints of time and space have been faced. In addition, I have not been able to access any primary sources of information. By this, I mean that I have not been able to carry out interviews, distribute questionnaires to solicit response or moved to places to carry out field research. The study has therefore relied on secondary materials such as reports and articles in journals and on the Internet. 19 ENDNOTES I Pheko, M., Road to Pan-Africanism The Sowetan Johannesburg IS November 1999 . 2. Cleland, 1., The OA U: Sovereignty and Tem.to,rla llntegn.t y ifA!fri caStnate,s Keynote Address to0 . the SymposIum Organt.s e d by Legon Centre of International Affairs on 22 nd October 1997. T. he symposIum was in the form ofa seminar with various speakers invited to handle a wide range of tOPICS. 3. Ihonvbere, 1.0. Pan-Africanism: Agendafor African Unity in the 1990s,_ Keynote address at The All· Amean Student's Conference, Peter Clark Hall, University of Guelph, Guelph, Ontario, Canada, May 27, 1994. 4. Nye, 1.S, Pan·Africanism and East African Integration, (Nairobi, Oxford University Press, 1966) p.3 5. Cleland, op.cit. 6. Adebayo Adedeji, History and Prospects for Regional Integration in Africa, at The Third Meeting of the Afriean Development Forum Addis Ababa,S March, 2002 7. Babarinde, O. A., Analyzing the Proposed African Economic Community: Lessonsfrom the Experience of the European Union. Prepared for the Third ECSA·World Conference on The European Union in a Clllmging World. Sponsored by the European Commission, D·G X, Brussels, Belgium, 19·20 Septernber, 1996. Babarinde O. A. was then at the Department of International Studies, Thunderbird, The American Graduate School of International Management, Glendale, Arizona 85306·60 II. I. Asanle S.K.B .. The Strategy of Regional Integration in Africa (Accra, Friedrich Ebert Foundation, 1996), pp. 1·2. 9. Hazelwood, A., African Integration and Disintegration: Case Studies in Economic and Political Union (Oxford, London, 1967), p.394. 10. http://www.kpmg.co.kelotherlEast%20African%20community.htrnl East African Community: A distant Dream? Accessed on 18 August 2004. II.From the Official Website of the Tanzania High Commission, London. East African Cooperation: Historical Background, http://www.tanzania-online.gov.ukleaca.htrnl. Accessed on ISAugust 2004 12. Nassah, M., The East African Community and the Struggle for Constitutionalism: Challenges and Prospects http://www.kituochakatiba.co.ugfnassali.htm. Accessed on 6 October 2004 Kituo Cha Katiba is the East Amean Centre for Constitutional Development, Faculty of Law, Makerere University Kampala. 13. Preamble to the Treaty Establishing the East African Community. 14. Regional Integration in Africa www.fao.orgfDOCREP/004/y4793eO.htrn Accessed on I Oct 2004. The groups identified are The Common Market for Eastern and Southern Africa (COMESA), the Economic CommuOlty of Central African States (ECCAS), The Arab Maghreb Union (AMU),The West African EconomIC and Monetary Union (WAEMU),The Economic and Monetary Union of Central Africa (CEMAC), WllhlO the proposed ECCAS, The Southern African Customs Union (SACU), Common Monetary Area, CMA), Intergovernmental Authority on Development (IGAD) The Southern African Development Community (SA DC), and The East African Community (EAC). 20 I S. Goldstein, A., and Ndung'u N.,S., New Forms ofC ooperation and Integration in Emerging Africa: Regional Integration Experience in Eastern African Region OECD Development Centre Technical papers No 171 Produced as part of the Research Programme on Integration and Cooperation in Sub-Saharan Africa, March 2001 http://www.oecd.orgldataoecdlI81l7/192163S.pdf. Accessed on I October 2004. 16. Khabele,M., New Regionalist Impulses: Implications of the New Partnership for Africa's Development (NEPAD) for Regional integration in Southern Africa. A Paper Prepared for CODESRIA's 10TH General Assembly on "Africa in the New Millennium", Kampala, Uganda, 8-12 December 2002. 17. Nye, 1.,S., op.cit. p. 40. 18. Nye, 1., S., ibid., p. 4\. 19. Dougherty, I.E. and Pfaltzgraaff, R.L., Contending Theories of International Relations (New York: Longmans,2001)p.419. 20. lilberto, A.E.F., and Mommen, A., Regionalisation and Globalisation in the Modem Economy (London: Routledge, 1998) p.8. 21. Mwai Kibaki quoted in The banker Magazine October 2003 edition. 22. EAST AFRICA: Museveni urges movefrom Assembly to integration. http://www.irinnews.org. Accessed on 30 Scp, 2004. 23. Dougherty, J.E., op.cit., p.419. 24. Nagle, J.D., Introduction to Comparative Politics: Political System Performance in Three Worlds. (Chicago, Nelson-Hall, 1987), p.1 S. 25. East African Cooperation: Historical Background, http://www.tanzania-online.gov.ukleaca.html. Accessed on 18August 2004. Official Website of the Tanzania High Commission 26. Asante, SKB., e i Ii m and A d Challen es, (GTeat Britain, Macmillan, 1997), p.l. 27. Asante, S.K.B., ibid.,p. 3. 2B.lbid., pp. B-12. 29. Ibid., p. 62. 30. Ibid., pp.62-83. 31. Nyc, J.S., op.cit., p.158. 32. Asante, S.K.B., op.cit., pp.7S-83. 33. Ibid.,pp.IIB_137. 34. Ibid., pp.138-144. 35. Konings P and M T k, HR' ,., el In ., eglOnal Economic Integration in Sub- Saharan Africa, in Jilberto A.E.F., and Mommen A Reb' \'. d ' • ., slona 18aMn an Globalisation in the M d E I 998),p. 128. 0 em _conornx (London: Routledge, 36. Ibid., p. 131. 21 37. Ibid., p.131 Union douaniere et economique de l'Afrique centrale (UDEAC) comprised Cameroon the Central African Republic, Chad, the Congo, Equatorial Guinea, and Gabon. 3S. ibid., pp. 134-137. 39. ibid.,p. 142. . 40. Aryeetey, E. and Oduro A.D., Regionalism and the Global Economy: The case for Africa, in Teumsssen J.J., (ed) Regionalism and the Global Economy: The Case for Africa (The Hague, Forum for Debt and Development [FONDAD] 1996), pp. 11-64. 41. Hazlewood. A., op.cil., p.9 42. ibid., p. 101. 43.Nye,S.,op.cit. 44. Ibid., pp. 25-26. 45. Ibid. 46. Malan M, The OAU and African Sub regional Organisations- A closer look at the 'peace pyramid' Institute for Security Studies, Occasional Paper No 36 - January 1999 47. Jilberto, A. E.F, op.cit., pp. 7-S. 411. Asanle, S.K.B op.cit., p. 18. 49. Jovanovic, N. M., International Economic Integration' Limits and Prospects (London: Routledge, 1992), pp. S-IO. 50. Robson, P., The economics of Integration (New York, Routledge, 1998), p.2 51. Nye, S. op.,cit. P.84. 52. Asante. S.K.B op.cil., p.20. 53. Aryeetey, E., and OduTo, A.D., op.cit., p. II. 54. Preamble 10 the Treaty for the Establishment of the East African Community signed on 30th November, 1999. 55. CIA-The World Factbook,September 2004, http://www.odci.gov/cialpublications/factbookiindex.html. Accessed on 20 October 2004. 56. East African Statistics: Facts and Figures-2002. EAC Publications III, (Arusha, East African Secretariat, 2003) p. 3. 57. Olufemi Fajana. The Economics of Integration, Policy Analysis Support Unit, African Union, Addis Ababa in African Perspective. 12111 Issue Winter 2002 -2003. 22 CHAPTER TWO THE EAST AFRICAN COMMUNITY 2.1 INTRODUCTION This chapter outlines the profile of the East African community. It traces the origins of the current regional organisation to the defunct one established in 1967. It briefly touches on the phases the East African States intend to go through in the integration process. There is a brief historical overview about the East African Community. Finally, the chapter deals with relevance of integration to East Africa. 2.1.1 PROFILE th The Treaty for the establishment of the East African Community was signed on 30 November 1999 in Arusha, Tanzania by presidents Benjamin William Mkapa, Daniel Toroitich Arap Moi, and Yoweri Kaguta Museveni of Tanzania, Kenya and Uganda respectively. Its headquarters is in Arusha and its organs include the Summit (of Heads of State or Government), the Council (of Ministers),the Coordinating Committee, Sectoral Commitees, the East African Court of Justice, the East African Legislative Assembly, the Secretariat and such organs as may be established by the Summit. I The stated objectives of the Community "shall be to develop policies and programmes aimed at widening and deepening co-operation among the Partner States in political, security and legal and judicial affairs, for their mutual benefit. .. 2 Some of the principles of the Community include mutual trust, sovereign equality, good neighbourliness, peaceful settlement of disputes, good governance, equitable distribution of benefits and co-operation for mutual 3 benefit. The operation principles that shall govern the practical achievement of the objectives include, people-centred and market driven co-operation, establishment of export oriented economies, the principles of variable geometry, subsidiarity and complementality.4 In line with the principle of co-operation for mutual benefit, the three countries signed a protocol for the sustainable development of the Lake Victoria Basin on 29 November 2003 in Arusha. 23 This Treaty is an offspring of an earlier one, The Treaty for the Establishment of ~ast African Cooperation signed in Kampala, Uganda, on 6 June 1967 by Presidents Mwahmu Julius Kambarage Nyerere, Jomo Kenyatta and Apollo Milton Obote of Tanzania, Kenya and Uganda respectively. The aims of this one were to work towards "harmonious and balanced development and sustained expansion of economic activities the benefits thereof shaH be equally shared."s Other objectives included "the harmonisation, required for the 6 proper functioning of the common market and the coordination of economic planning. .. This Community collapsed due to "internal and external factors. Analysis has shown that many of the collapsed integration agreements were carried out in a context lacking consensus about the fundamental economic systems, the domination of inward-looking import substitution oriented strategies, combined with large public sector and over- protection of industries. 7 2.1.2 PHASES OF THE INTEGRA nON PROCESS Article 5 (2) of the EAC Treaty provides the roadmap for the process of political integration, " ... the Partner states undertake to establish among themselves and in accordance with the provisions of the Treaty, a Customs Union, a Common market, and subsequently a Monetary Union and ultimately a Political Federation, in order to strengthen and regulate the industrial, commercial, infrastructural, cultural social, political and other relations of the Partner States." Each of the four main phases of regional integration would be achieved through a negotiated protocol starting with one on Customs Union concluded on 2 March 2004. The success of the Customs Union would determine the speed at which the Community enters the second phase of integration: the Common Market. Under the Common Market, it is expected that there shall be free movement of labour, goods, services and capital. It is also during this phase that the citizens of East Africa would enjoy the right of establishment and residence within the Community. The Monetary Union would require a Protocol to create a single currency and institutionalise a Monetary Authority for the Community. The final phase of integration would be the establishment of a political federation. This phase would be the subject of a new Treaty. The EAC has chosen to prioritise economic integration to be 24 followed in the distant future with political federation. "As a. rule, federal govem:ents' mandates embrace federal executive authority, federal legislatIon and federal court. 2.1.3 HISTORICAL OVERVIEW The beginning of cooperation in East Africa was with common services in 1895 with the commencement of the construction of the Uganda Railway from the Kenyan coastal town of Mombasa.9 Muma argues that it may be difficult to tell exactly when the people of modem day East Africa began interacting with one another. He says there were no known boundaries as they are today. People moved freely and engaged in economic activities without any hindrance. This trend was reversed by the colonialists with the introduction of territories followed by restrictions on movement. Muma traces the origin of formal co- operation to the advent of colonial rule and the establishment of structures of modem states in East Africa. IO The East African Common market came in 1900 with customs arrangements between Uganda and Kenya on one hand, then the British East Africa, and Tanganyika, then German East Africa, on the other hand. The EAC began with the formation of the East African Common Services Organisation (EACSO) in 1961 culminating in the establishment of the EAC in 1967. II Hazlewood tends to agree with Muma's assertions but gives more details about the East African cooperation when he writes, " ... there is a long history of proposals for closer economic and political relations, and federation was seriously discussed in the 1920s as well as the 1960s."12 He adds that the colonial governments within the three East African territories worked closely with each other since 1926 in an arrangement of the Conference of Governors. A permanent secretariat was set up for purposes of developing interterritorial organisation, cooperation and co-ordination on matters of common interest. In 1945, the United Kingdom (UK) government proposed management of the interterritorial services but the proposals gave less power to the interterritorial organisation than the original intention. In 1948, a permanent executive authOrity, the East African High Commission was established. 1961 saw the creation of the East African Common Services Organisation replacing the East African Ht·gh Comm. . lSS10n. 25 Other spheres of cooperation included the common market and a common currency, which existed till 1966. The Common Market dated back to 1917 when free trade between Uganda and Kenya was established. Tanganyika was brought on board between 1922 and 1927 after World War II. Customs administrations were amalgamated in 1949. Nye associates integration of East Africa with the British who became interested in the region after involvement in Egypt in the early 1880s.13 Kamanga agrees with Nye when he asserts, ..... there can be no denying that Britain's initial interest in East Africa was influenced by the anti-slavery crusade. It cannot be denied however that soon, the more decisive, enduring impetus became the desire to secure 'control of the headwaters of the Nile in order to protect [the British] position in Egypt and the ... Suez Canal', in particular.,,14 The German initiative in East Africa in the mid 1880s aroused Britain over the control of the source of the Nile. The original British vision of East Africa was North- South centred on the Nile, with what is now Kenya of only incidental interest. Because of differences between colonial officials, the first attempt to unify East Africa was concerned with what is now Kenya and Uganda. Sir Harry Johnston a special Commissioner to East Africa recommended that Kenya and Uganda be merged. Sir Clement Hill, Head of the African Department of Foreign Office disagreed on the grounds that the new unit would be too large, and substituted a plan to transfer Uganda's Eastern Province to Kenya in order to bring the newly constructed rail line under one administration. Nye observes that had Johnston's proposal been accepted, the great energies devoted to unification might have been spent on other problems. He regrets that personal animosity rather than compelling reasons probably caused Hill's action. The extent ofthe irony was deepened by the transfer of the high-lying Uasin Gishu and Trans- Nzoia areas to Kenya in 1902 since this set the basis for the later reliance on African agriculture in Uganda and European agriculture in Kenya. The two territories continued to diverge rapidly after the transfer. IS Nye adds that a colonial report which had speculated, " ... this great stretch of British East Africa. an area of over a million square miles extending from Abyssinia to the union, will emerge as a Dominion,,16 f;a l'l ed to materialise. He notes that the central political 26 integration which was achieved under colonial rule was too weak as a focal point for the growth of a community or nationalist organisation. Nye highlights the hopes of East African politicians towards a merger through uniting the three main territorial parties. However, African leaders did not build an East African Organisation before independence. The possibility of an East African Movement was first seriously investigated in 1945. Another attempt was in 1950 while the third one was in 1958 called the "Big Push" during which The Pan-African Movement for East and Central Africa (PAFMECA) was founded in Mwanza. However, the political elite realised that real power and real nationalist organisations were in the three territories, and the differences in the territorial settings resulted in the creation of organisations which could not easily be merged into one. 17 The search for East African cooperation can be said to have gone through five phases. The first phase began at the end of the 19th century and was marked by several initiatives to integrate the economies of Kenya and Uganda. These included the building of the Uganda railway, the conclusion of the customs arrangements and the partial amalgamation of Posts and Telegraph between the two countries. The second phase began in the early 1920s with the addition of Tanganyika to the cooperation which lasted till 1961. This phase saw the establishment of a common currency, the East African Shilling, the creation of various institutions like the Governor's Conference which gave way to the East African High Commission in 1948 and the East African Legislative Council. Several commissions were appointed to explore the possibilities of East African Federation including the Ormsby-Gore Commission in 1924 and the Hilton-Young Commission in 1927. The third phase lasted from 1961 when Tanganyika became independent followed by Uganda 1962 and Kenya 1963 to 1977 when the EAC collapsed. The period 1977 to 1991 was one of negative growth in cooperation; "many common services were dismantled and some collapsed, the level of discord and disagreement rose to dangerous levels until some of the countries went to war against each other."ls Unfortunately in this phase, within the first year of the EAC coming into existence, the East African Currency Board broke down. leading to the establishment of three separate central banks. This destroyed any hope for a monetary union. In addition. a military government came to power in Uganda in 1971 and challenged the foundation of harmonized policy and rule of law. Tanzania did not recognize the new regime in Kampala and considered its participation in the EAC illegal. Furthermore, the countries reacted differently to the economic shocks of the 1970s and continued to have different economic systems. The EAC collapsed when member states failed to pay their dues. Tanzania closed its border with Kenya. One of the reasons advanced for the collapse of EAC in 1977 was that Kenya was receiving a disproportionate share of the benefits of integration. Various measures were tested to redistribute the gains from the common market, but failed to produce the results Uganda and Tanzania wanted. 19 Phase four started in 1984 with the setting up of the East African Mediation Agreement. In 1991, efforts to rebuild what was destroyed and the resolve to move cooperation to a higher qualitative level of political federation were stepped up. The fifth phase was the revival of the East African Cooperation which started with the Nairobi Communique of October 1991 to revive the EAC. The East African Cooperation was established in 1993, anticipating an East African Community. with built-in provisions for a much deeper East African Union namely a Monetary Union followed by a Political Federation. A Permanent Tripartite Commission for East African Cooperation established in 1993 set up a Secretariat in 1994 till the signing of the Treaty in 1999.20 2.2 THE RELEVANCE OF REGIONAL INTEGRATION TO EAST AFRICA According to a World Bank Research Bulletin, perceptions of a fortress mentality in Europe and fears of an imminent Western hemispheric Free Trade Area (FT A) have led some nations to contemplate a defensive regional bloc of their own. And in the former Soviet Union, political disintegration has made regional integration a way of preserving fast-disintegrating trade among the new republics. Regionalism is once again being viewed as a solution to the major international economic problems of our times. Today, 28 regt·o na I' . back Wl·th a vengeance In its current incarnation, regionalism has engulfed Ism IS' . all major players in the world economy. The loudest message from these developments IS that regionalism this time is here to stay. It adds that, the implications of regionalism for the global trading system, nevertheless, remain contentious. Regional blocs may be a bad idea in principle, but good in practice, an assertion attributed to Vinod Thomas; or that even if they are a good idea in principle, they are likely to be bad in practice, a view held by Professor Bhagwati. 21 Maina's view is that in an integrated set up, resources, capital and research findings will be easily shared and there will be a considerable amount of savings due to joint efforts. He quotes Kwame Nkrumah as saying, •... broomsticks can easily be broken when taken singly. The broom as a bunch, however, presents a more difficult proposition. So long as we remain disunited, so long as we remain balkanized, regionally or territorially, we shall be at the mercy of colonialism and imperialism.' Maina further uses the words of Ibrahim Babangida to drive his point home, ' ... small States are like indecently clad women, they tempt the evil minded. Only in co-coordinated action could the small independent States of Southern Africa achieve the strength and the power necessary to resist those who were tempted to exploit the region and perpetuate its economic fragmentation and dependence.' He ends with these words attributed to Julius Nyerere, •... voluntary integration of countries, wherever it takes place, is a positive step towards liberation of the common person from the various ills confronting him. ,22 Asante strongly advocates for regional and sub-regional economic integration and African economic cooperation arguing that the case for regionalism is indisputable and that it has long been recognised. He sees African countries as largely artificial by- products of the colonial scramble for Africa in the Berlin conference of 1884-85. He decries Africa's mini-states and believes in the removal of the fragmented and small African markets?3 In the same vein, Lancaster views the rationale behind economic integration as, "the promotion of trade and economic welfare among member states.,,24' He reiterates that the objective for creating expanded markets has focused mostly on promoting rapid growth through expanded investment. He adds that integrative efforts 29 assume that industrial development is a key element in overall economic development. Efficient industrial development, according to Asante, typically requires producers to be large enough to achieve economies of scale and that industrial producers will require markets larger than their home markets to achieve economies of scale. Other assumptions are that small markets need to be merged in order to encourage expanded investment and that the large markets have to be protected for a time from competitive imports from third countries. In line with this, the East Africans sought, " ... to overcome the disadvantage of smallness by pooling resources, expanding markets, strengthening the effectiveness of domestic policy making, and enlarging markets available to regional firms and the subsequent increase in trade flows. ,,25 In the spirit of the Liberalist Theory, Kimenyi says that, ..... the importance of trade in raising living standards has been accepted since the 17th Century when economists like Adam Smith and David Ricardo expounded on the importance of specialisation and free trade ... 26 He adds that this view contradicted that of the rather myopic mercantilists who were obsessed with creating trade barriers as a strategy to accumulate wealth through trade surpluses. He notes that while in the past many countries have erected trade barriers, such barriers have now been removed, not only because of the international system but also because countries realise free trade is associated with positive net benefits. Kimenyi continues to highlight the dark side of closed economies and he cites less competition, protected and inefficient industries, poor quality products, small markets, limited capital inflows and investment. He emphasises that a closed economy would certainly not be able to raise the quality of life of its citizens. Regional integration, he argues, is now seen as an appropriate strategy in the process of expanding trade and wealth creation. Kimenyi reiterates the importance of integration to East Africa when he says that the EAC collapsed in 1977 but, " ... we in East Africa are going over the process again ... 27 He notes that now the three countries accept that regional integration would benefit all of them. He shows there are common factors that work against sustained economic development if individual countries go it alone. He insists that integration offers hope for East Africa to increase the well-being of the citizens?8 30 Aryeetey and Oduro state that despite the clear difficulties of various integration schemes in Africa, efforts at regional integration persist. Revitalising and resuscitating regional groupings could be seen as a response to the deepening and enlargement of integration in Europe, the formation of a free trade area in North America and similar developments in South-East Asia. They point out the fear that Africa's position in the world economy will be weakened further if it does not strengthen its already existing regional groupings. Aryeetey and Oduro write, "... a failure to overcome, or reduce, the costs of market fragmentation in regions whose countries have not yet began to cooperate will mean that those regions, as a whole, will be less placed in the future to attract the foreign investment, technology and know-how on which they will have to depend for their future growth.,,29 Quoting World Bank reports of 1982, Aryeetey and Oduro argue that Africa's long term development strategy hinges on integration and increased cooperation in a whole range of areas. They claim integration can accelerate growth if it facilitates increase in trade and that integration should lead to larger units as against sub-regional bodies?O In preface to the same book mentioned in the previous paragraph, Teunissen says that regionalism is indeed an imperative. He writes, ..... regional economic integration has received a new, worldwide impetus with Europe's deep integration, the surge of the "new regionalism" in Latin America, and the emergence of mega-initiatives such as the Asia Pacific Economic Cooperation (APEC) agreement between major countries bordering the Pacific Ocean ... the emergence of regional blocs in Europe, America and Asia, has made the threat for Africa of being even further marginaIised in the world economy a very real one.,,31 This same point is emphasised by Muthaura, " ... East Africa is part of the global village currently undergoing fundamental transformations on the basis of intensive competition. Regional groupings have grown and reinforced themselves for the purpose of strengthening their competitiveness in the global market. 32 He adds that the bargaining power of the East African States, vis-it-vis other countries will be enhanced and that they hope to realise more voting power in terms of international organisations, especially the World Trade Organisation (WTO). 31 The media too is interested in these efforts towards East African integration. After the East African leaders had signed a customs union protocol on 2 March 2004, a British Broadcasting Corporation (BBC) reporter made the following comment, " ... the three countries, with a combined population of 90 million and gross domestic product of some $25bn, hope they will now be able to start pooling their resources, boosting trade, and taking advantage of their combined markets. Under the protocol, trade will be Iiberalised as tariff and non-tariff barriers will be eliminated, a common external tariff wiIl be maintained, and an integrated market established. ,,33 This helps to illustrate how East Africa hopes to fit in the worldwide movement towards integration and liberalisation. Taye fairly helps us understand why regionalism is indeed crucial in Africa as he states, ..... despite the unsatisfactory performance [of regionalism in Africa] to date, however, there seems to be a new momentum to invigorate the process of cooperation and ultimately integration of African economies.,,34 Among others, Taye cites some of the reasons that re-kindled interest in African economic regional integration. First, he singles out the Abuja Treaty of 1991 by African Heads of States which seems to have re-ignited interest and strengthened the commitment for some form of a continent-wide economic cooperation. Second, the formation and the strengthening of various regional blocs outside of Africa (in Europe, Asia and the Americas) seems to have forced African countries to reconsider the issue more seriously if they are to avoid further marginalization. Third, Taye points out the realization by African countries (particularly the small ones) that their respective national markets are too small to provide the benefits of economies of scale and specialization which are perceived as preconditions for economic growth; getting an access to the markets of partner countries has become a relevant consideration. Fourth, Taye identifies the liberalization initiatives undertaken by almost all countries in Africa (mainly sponsored by the Bretton Woods institutions). He sees it as having created a conducive environment to pursue an outward-looking economic policy, which encompasses economic cooperation in general and trade policy in particular. However, he is not sure whether these factors are sufficient to take the integration initiative to a higher level . What is not in dispute . th IS at some apparent 32 optimism has been created more than ever before. Such optimism was expressed at one of the COMESA meetings in Kampala. At the opening of the 17 th Meeting of the COMESA council of Ministers, African leaders attending a meeting in Kampala urged the world's poorest continent to deepen regional integration in order to overcome various challenges both inside and outside the region. "We need to move forward conscious of the fact that the more we are united the easier it will be for us to prevail and confront the common challenges," Erastus Mwencha, secretary general of the Common Market for Eastern and Southern Africa (COMESA), said. Kajura. third deputy prime minister of Uganda, said that as Africa seeks to attain full integration in the region, most other regions have already agreed to free trade. He cited the Pacific region where the Asia-Pacific Economic Cooperation is being consolidated, the Americas under the North American Free Trade Area and the Southern Cone Common Market of Latin America (MERCOSUR) group, Europe under the European Union which has just welcomed 10 new members to become the largest integration bloc in the world, and free trade between Europe and the Mediterranean region under the EU/Mediterranean Associate Agreement. Kajura observed that if large economies in America and Europe are seeking bigger markets by fostering regional integration, the smaller economies of Africa have an even greater need to come together in a regional. and subsequently, continental common market.35 To crown this section of the study we can reflect on the words of Museveni, " ... what are the most fundamental historical tasks facing the African continent today?" I would answer '" consolidation of national unity within individual African countries and promotion of inter-African cooperation and unity. This will solve the problem of fragmented markets and weak political entities .. 36 In this chapter, it has been made clear that regionalism is once again being viewed as a solution to the major international economic problems of our times. In its current incarnation, regionalism has engulfed all major players in the world economy. In an integrated set up, resources, capital and research findings will be easily shared and there will be a considerable amount of savings due to joint efforts. African countries are largely 33 artificial by-products of the colonial scramble for Africa in the Berlin conference of 1884-85. Africa's mini-states need to be removed through the integration of the fragmented and small African markets. The EAC, therefore, aims at overcoming the disadvantage of smallness by pooling resources, expanding markets, strengthening the effectiveness of domestic policy making, and enlarging markets available to regional firms and the subsequent increase in trade flows. The emergence of regional blocs in Europe, America and Asia, has made the threat for Africa of being even further marginalised in the world economy a very real one. East Africa, as part of the global village, is currently undergoing fundamental transformations on the basis of intensive competition. The bargaining power of the East African States vis-A-vis other countries will be enhanced and through the EAC, East Africans hope that they will realise more voting power in terms of international organisations especially the World Trade Organisation (WTO). 34 ENDNOTES I Article 9(1) (a-h) of the Treaty establishing the East African Community. 2 Ibid Article 5( I ) ) Ibid Article 6(a-O • Ibid Article 7(a-h) s Article 2( t) of theTreaty for East African Cooperation 6 Ibid Article 2(2) (f-h) 7 East African Community: Challenges and Opportunities, Selected Benefits and Expectations East African Community Secretariat Occasional Papers No t Arusha 200 I, p.ll. I Muthaura, F.K., The Process oft he EAC Regional Integration, in Dialogue on the Regional Integration in East Africa: Proceedings of an EAC Seminar In Arusha, 19-20 March 200 I. 9 Perspectives on Regional integration and Co-operation in East Africa, Proceedings of the 1'1 Ministerial Seminar on East African Co-operation, Arusha, 25-26 March,1999 (Arusha, East African Secretariat and GTZ, 2000) p. 21. 10 Mum&, J., (It Col), Brief to the Army Commander Uganda People's Defence Forces (UPDF), on the East African Community dated 14 January 2003 done at Bombo General Headquarters. Muma was then the Desk Officer in Charge of East African affairs at the UPDF General Headquarters. II Opcit Perspectives on Regional integration and Co-operation in East Africa, p.21. 12 Hazelwood, A., African Integration and Disintegration: Case Studies in Economic and Political Union, (Oxford, London, 1967), p.69. 13 Nye, J.S, Pan-Africanism and East African Integration, (Nairobi, Oxford University Press, (966), p. 86. .. Kamanga, K., Some Constitutional Dimensions of East African Cooperation, Paper prepared for presentation to Kituo cha Katiba within the 'State of Constitutional Development in East Africa' project. Email: kkamanga@ucc.ac.tz " Op.cit., Nye, J.S, pp. 86-89. I. ibid P 89. 17 Ibid pp. 94-98. Mukandala, R. Political Cooperation. in Perspectives on Regional integration and Co-operation in East Africa, Dialogue on the Regional Integration in East Africa, opcit p88 19 Ndung'U. N. S., Regionallnlegralion Experience in East Africa, http://tcdc.undp.orglcoopsouthl2003_ 2ICoopSouth_E-50-65.pdf. Accessed on 220ctober 2004. 20 Ibid pp. 21 . 35 21 Regionalism in trade is Back-and Here to Stay. World Bank Policy Research Bulletin. May-July 1992 Volume 3. Number 3 22 Maina. c., Legal and Constitutional Quertions 0/ Integration: A Brie/ Examination o/Treaty Establishing the A/rican Union. African Perspective 12!h Issue- Winter 2002-2003 2J Asante, S.K.B., The Strategy of Regional Integration in Africa, ( Accra, Friedrich Ebert Foundation, 1996), p.4. 14 Lancaster. C., The Lagos Three. in Haberson, J. W. and Rothchild D. Africa and World Politics: Post Cold-WarCha!lenges (Westview Press, Oxford, 1995) 2S opcit East African Community: Challenges and Opportunities. Selected Benefits and Expectations. p 9. 26 Kimenyi, S.M., Expectations 0/ East African Integration, in Dialogue on the Regional Integration in East Africa: Proceedings of an EAC Seminar in Arusha 19-20 March 2001, pp. 7-S. 27 Ibid 21Ibidp.9. 2' Aryeetey, E. and Oduro, A.D .• Regionalism and the Global Economy: The Case 0/ A/rica, (in Teunissen (ed) Regionalism and the Global Economy' The Case of Africa,(The Hague, Forum on Debt and development [FONDAD] 1996.) p.13. 10 Ibldp. 14. 11 IbId, Teumssen, preface to RegIOnalism and the Global Economy: The Case of Africa 12 Muthaura, F., in East A/rican Community: Challenges and Opportunities. Selected Benefits and Expectations. op.cit., p. 14. lJ Lewis, D., Hopes and/ears/or A/rica trade pact BBC NEWS Tuesday, 2 March, 2004, IS:02 GMT 14 Taye. H. K., Regional Integration in Africa: A Review o/Outstanding Issues and Mechanisms to Monitor Future Progress, A draft issues paper presented at The African Knowledge Networks Forum Preparatory Workshop, 17-IS August 200, Addis Ababa, Ethiopia. Haile Kebret Taye was then a visiting Professor, Oxford University and The Department of Economics, University of Addis Ababa. \! httpll:www.newsxinhuanet.comlEnglishl2004-jun4content-150S917.htm Accessed on 5 June 2004 36 Musevem,Y. K., (Elizabeth Kanyogonya [ed]) What is Africa's Problem? (University of Minnesota Press, 1992), p .. 52. 36 CHAPTER THREE CHALLENGES AND PROSPECTS OF THE EAST AFRICAN COMMUNITY 3.1 INTRODUCTION This chapter begins by identifying the challenges to African regionalism, as they relate to the EAC, and seen through the eyes of some scholars. It begins with opinions by distinguished academicians on what they think has failed regionalism in Africa and what they view as the way forward. The challenges to East African integration are looked at some length showing external as well as internal challenges. The chapter ends with the prospects of African regionalism as seen in the East African experience. The chapter intends to show that the road to the success of regionalism in Africa is bumpy but with more effort, regionalism is achievable. Lee points out that in the light of the failure to date of regionalism in Africa, numerous scholars have made recommendations for the way forward. I This is the subject of this chapter. Asante shares Lee's view when he observes that " .. .it has become necessary to find out the reasons for the wide consensus over the disappointing results of the process of economic integration in Africa, despite the continuous rhetoric about the need for regional cooperation and integration ... 2 He adds that the complexity and sensitivity of the subject does not appear to allow for simple explanations. He is convinced that a multiplicity of factors has played a role in the poor record. In an effort to provide the reasons for the disappointing results mentioned above, Jovanovic argues that, ..... the 'traditional' schemes that integrate developing countries are structured along the lines of neo-classical theory of integration. This, he adds, has made developing countries fail to live up to the great expectations of the founders and most, in fact, failed and collapsed.3 Park looks at the challenges on a global level, ..... the current world economic environment exposes both national economies and supra-national organizations to various challenges. The advanced tripolarization of the world economy and the revival of regionalism, in the early 1990s, represent the main challenges to the multilateral trading 37 system under the newly established World Trade Organization (WTO).'04 This shows that challenges facing regionalism are not restricted to Africa. Jilberto and Mommen see some light at the end of the dark tunnel of regionalism in sub- Saharan Africa (SSA). Problems are there but, " ... notwithstanding the deepening economic and political crisis in a large number of SSA countries in the 1990s, governments continued their efforts towards greater regional integration on the continent.,,5 They cite the creation of the African Economic Community (not yet functional) in May 1994 as a follow up of the 1991 Abuja Treaty as an example of such efforts at integration despite apparent failures. This, in itself, is evidence that after all, regionalism has a future in Africa. The continent is not about to abandon integration. The authors point out that a change in approach to integration is clearly emerging. They observe that the current trend is away from the trade arrangements per se and towards greater regional project and sectoral coordination, policy harmonisation and the creation of regional infrastructural and institutional frameworks. They call for a sound regional policy environment in order to facilitate the integration process. Such corrective measures as pointed out in the preceding paragraph are already underway in East Africa. Wambugu states that, " ... the development of infrastructure is considered as a pre- requisite for envisioned regional integration in East Africa. Hence, several projects identified at early stages of cooperation were in infrastructure.,,6 The projects include the East African Digital Transmission (implementation left to the administration of Partner States), the EAC Telecommunications Trunking (supported by GTZ), Cross- Border Connectivity (financed by Partner States) and the East African Road Network (financed by GTZ). Wambugu cites harmonisation of policies in the roads sub-sector as being exemplified by the signing of the Tripartite Agreement on Road Transport in November 200 1. Other projects are: the East African Civil Aviation Safety Project (under the auspices of the Civil Aviation Organisation [ICAO]), Safety of Navigation on Lake Victoria supported by the French Government and the International Maritime Organisation (lMO). Studies in the railways sub-sector are being financed by the United States Agency for International Development (USAID). This is just to illustrate that all is 38 not Io st . Afri can reaionalism The last section of this chapter therefore reviews the lD C" • prospects of integration in East Africa. 3.2 CHALLENGES TO EAST AFRICAN INTEGRATION Babarinde is convinced that Africa is experiencing a crisis as far as regionalism is concerned and he continues to paint the anatomy of the crisis Africa is facing. He writes, The African plight is multifaceted and all-encompassing. The crisis is not only economic, but it is also political, social, cultural, ethical, environmental, and agricultural. Furthermore, the African plight is about the lack of capacities, such as management, technology, capital, infrastructure, and so on. Africa also suffers from soaring national debts and debt-financing. The African predicament is also about human survival, a deteriorating civil society, and a worsening personal safety. The current state of affairs in Africa, judged by recent trends, in absolute and relative terms, is unsettling. For most of Sub-Saharan Africa (SSA), although the condition is not entirely hopeless, it is very critical and requires immediate remedies.7 He continues to explain that the African plight looks even more troubling when we consider the sub-continent's economic size. In 1993, for example, the total GDP for all of SSA's 48 countries was about $271 billion. Contextually, it means that today's roughly 500 million people of SSA have a combined GDP of about 5% that of the United States, which has approximately half as many people. He adds that it also means that the collective economic size of SSA is lower than that of Belgium and many American and/or German states. Babarinde is frightened about the relative economic weakness of SSA. He notes that there are several multinational companies (MNCs) whose annual sales receipts by far exceed the aggregated economic size of the African groups, even that of the entire continent. 39 The East African situation is reflective of what Babarinde highlights above. The GDP per capita was as follows in the period indicated: EAST AFRICA: GROSS DOMESTIC PRODUCT PER CAPITA USD Partner 1990 1995 1998 1999 2000 2001 2002 StateNear Kenya 312.0 266.0 362.4 273.4 288.3 317.5 339.6 Tanzania 72.9 105.1 256.7 259.6 262.7 263.5 266.0 Uganda 88.9 278.1 331.4 357.6 374.3 388.4 398.4 EAC 157.9 216.4 316.8 296.8 308.4 323.1 334.7 EAC STATISTICS DATABASE OCTOBER 2003 Source: Partner States. 8 This clearly shows that most East Africans earn less than one dollar a day which means living below the poverty line. It may be useful to look at the East African GDP to get a better picture of the gist of this study. EAST AFRICA: GROSS DOMESTIC PRODUCT MILLIONS Partner 1990 1995 1998 1999 2000 2001 2002 StateNear Kenya 6,957 7,661 10,437 8,038 8,707 9,778 10,812 Tanzania 1,794 2,974 7,933 8,282 8,618 8,933 8,921 Uganda 1,120 5,395 7,125 7,939 8,609 9,244 9,792 EAC 9,871 16,030 25,495 24,259 25,933 27,955 29,703 EAC STATISTICS DATABASE OCTOBER 2003 Source; Partner States (as above) EACjigure is a combined value o/Partner States GDP. In line with what has been discussed above Asante unlike Baban' d . " n e, uses conventIOnal indicators of economic and social well-being, to conclude that most African countries fall 40 significantly behind Latin American countries and all but a few of the poorest Asian countries. The indicators include per capita income, literacy, calorie intake, mortality, and so on. To illustrate this point, Asante notes that 41 countries designated 'least developed' by the United Nations are in Africa. He notes with sadness that in 1989, the gross national product (GNP) of all Sub-Saharan African countries, excluding South Africa, put together was approximately equal to that of Belgium. Even then, South Africa with a GDP of USSI 03,65 1 million in 1992, considered a giant in Africa has a GDP which is slightly smaller than the Norwegian GDP of USS112,906 million. Asante notes with dismay that Africa's largest economy by far is approximately the same size, when measured in terms ofGDP, as that ofa small European economy.9 From the table above, the combined East African GDP by the year 2002 is less than one third of that one of Norway way back in 1992. Having gone through these general challenges to regionalism on the African scene, we can look at specific challenges to the East African Community. The challenges to East African integration can be classified as external or internal. Further sub-classes can then be political, economic, social, global, institutional, technological, cultural or otherwise. 3.2.1 EXTERNAL CHALLENGES TO EAST AFRICAN INTEGRATION 3.2.1.1 COLONIAL LEGACY According to Nye, when nationalist institutions were established in East Africa, they were built at the territorial (not the East African) level because British colonialism had constructed the effective power structure (which the African elite wished to capture) at the territorial level. Once they had captured it, the African leaders had to use the territorial power structure to "build a nation" to create the community that they had claimed. This, Nye asserts, puts a strain on the weak East African Structure of • 10 cooperation. Nye argues, and convincingly so, that if Britain had been able to build a stronger East African Structure, the major steps towards political integration would have been taken before independence. In the event, Britain created only a weak cooperative structure in East Africa and this was reflected in the regional nationalist organisation Pan- 41 African Movement for East and Central Africa (PAFMECA), which was a weak framework for cooperation among nationalists. Developing this line of argument, Nye states that at the time of the federal negotiations (mentioned in chapter one of this study), partial political integration already existed. East Africans debated together in the Central Legislative Assembly of the Common Services Organisation, and the cooperative framework led them to recognise certain obligations and common interests. However, political disintegration was a strong possibility so long as separate power structures were consolidating the national interests and communities which had been asserted in the struggle for independence. He shows how difficult it was to integrate after independence. It was not easy to reconcile differences "in modem and poorly rooted institutions like the Legislature, non-political civil services, and regional administrations. ,,11 Institutional differences would have faded in 1963 had the leaders of the three countries been able to create the single East African Party which so many of them confidently stated they would. Hazelwood, throws more light on the colonial legacy when he writes that, ..... the "national" boundaries established by the colonial powers have proved so much more durable than the international links established by the same powers. The national boundaries are so firmly entrenched that the successor states will fight for their integrity, although the boundaries were established so very recently by a combination of historical chance. diplomatic, political and administrative convenience.,,12 Hazlewood argues that the international links, on the other hand, are proving fragile. He points out that political power was transferred to the territorial, not the supranational units. The initiators of political power, according to Hazelwood, have an interest in maintaining the authority and boundaries of the national states inviolate. Their interest in international links is much less direct. He observes that establishment of new links between the independent states, despite much talk, is still meagre. He argues that federation, even in its loosest form, requires a direct surrender of political jurisdiction. Certain powers must be surrendered to the federal authority. 42 Highlighting his view, Hazlewood asserts that states or territories must become formally subordinate to the centre. However, he notes that there will be a natural reluctance for political leaders to surrender their autonomy when they are under no threat, external or internal, from which they hope that federation might protect them. This is especially so when they do not feel confident they would have anything but a subordinate role in the proposed federal government. Hazlewood writes, " ... national independence and autonomy in a country which has only recently obtained them, appear as almost of overriding importance.,,13 This is well illustrated in an interview Nyerere gave to the New International Magazine. In the interview, Nyerere captures the ideas expressed above very clearly, ..... 1 never saw the contradictions that would prevent Kenya, Uganda and Tanzania from working together. I was naive, I guess. Even now for me freedom and unity are paramount. I respected lomo (Kenyatta) immensely. It has probably never happened before in history. Two heads of state, Milton Obote [Uganda's leader] and I, went to lomo and said to him: 'let's unite our countries and you be our head of state'. He said no. I think he said no because it would have put him out of his element as a Kikuyu Elder ... Kwame Nkrumah and I were committed to the idea of unity. African leaders and heads of state did not take Kwame seriously. However, I did. I did not believe in these small little nations. Still today I do not believe in them. I tell our people to look at the European Union, at these people who ruled us who are now uniting ... I tried to get East Africa to unite before independence. When we failed in this I was wary about Kwame's continental approach. We corresponded profusely on this. Kwame said my idea of 'regionalization' was only balkanization on a larger scale. Later African historians will have to study our correspondence on this issue of uniting Africa.,,14 Kajura supports Nyerere on this one, ..... negative forces like national, tribal and personal reasons were partly responsible for the collapse of the EAC Th fi . e 1rst attempts at federation failed because Uganda and Kenya leaders had not consolidated their hold at 43 the time. When the idea was floated by the late Julius Nyerere, it came with a great force, which Uganda and Kenya were not prepared for.,,15 Nye also has something to say about this. East African integration was not carried sufficiently forward before independence to be free from threats of disruption according to Nye. He identifies the growth of territorial communities which were built in the new territorial states. The power structure, the annies, police, budgets, radio and so on, which the nationalists wished to capture had been built primarily at the territorial level. Nye believes the differences between the territories. which sprang up early in the 20th Century, made lack of community too great to pennit establishment of a strong central East African structure. Nye points out that African nationalists built organisations to capture the government at the level which mattered, and this was the territorial level. Once developed, it proved difficult to integrate the territorial nationalist organisations into more than a loose framework for debating common ideas like PAFMECA. Because of lack of a single nationalist organisation, integration became partial and fragile when leaders decided that time had come to form a federation. 16 3.2.1.2 INTERNATIONAL FINANCE INSTITUTIONS Aryeetey and Oduro point out that most African countries are pursuing economic reform programmes imposed by the International Monetary Fund and the World Bank. They say that this makes African economies more outward-oriented, often at the expense of regional integration. 17 Asante agrees with this when he writes, ..... regardless of reassuring theoretical arguments, it seems, in practice, that implementation of adjustment policies as designed to date, can lead to a decline in regional cooperation between African countries.',18 Asante adds that the experience of recent years shows that the regional element is missing from the adjustment programmes designed for Africa. It is only national concerns which have priority. Policies are designed and implemented at the national level and the aims of say the Structural Adjustment Programmes (SAPs), which are macro-economic, can be measured correctly at the national level. The targeted 44 instruments, budgetary and monetary policies, and implementation of these instruments are essentially matters of national scope, having their direct impact inside the country concerned. This can be related to the East African experience. Goldstein and Ndung'u show that, " .. .in the last decade, the importance of ideology has receded and following the failure of Soviet planning and the adoption of structural adjustment policies, the belief in the market forces has become the standard in East Africa.,,19 They point out that all the three countries have followed broadly similar policies without any central coordination. According to the authors, the more "virtuous" policies have produced questionable results: domestic production has stagnated and poverty has increased. They add that even in Uganda, which is seen as a successful case of structural adjustment, poverty is still pervasive, and growth alone is not addressing the problem adequately. 3.2.1.3 FALLACY OF TRANSPOSITION The subheading is borrowed from Goldstein who argues that governments assume that the experience of regional integration among industrial countries could be replicated in far less developed countries. This is what he calls the "fallacy of transposition." 20 Lee also agrees when she writes, " ... notwithstanding the fact that market integration has failed miserably on the continent, it continues to be highly regarded by most African leaders as a solution to Africa's growing marginalisation within the world economy.,,21 She adds that the creation of the North American Free Trade Agreement (NAFTA ) and the movement toward the EU monetary integration, only served to reinforce the commitment African leaders have toward market integration. Lee argues that while African countries continue to be actively involved in intra-regional market integration, they should instead be involved in attempting to integrate their economies into the world economy. The scenario painted above is what Asante calls the problem approach. He too sees no hope in market integration, specifically; Iiberalisation of trade relations with a view to 45 quickly establishing preferential and free trade areas, custom's unions and common markets. Asante questions the appropriateness of market integration to Africa. He sees no commodities in which African countries can conduct trade. They all sell primary products. He asserts that the major cause of the poor return on economic integration efforts in Africa, ..... over the past thirty years, bas to do with the integration approach adopted by African economic groupings. Almost all of them have been modelled on the classical EU prototype, which is designed for developed countries. Asante cannot see the relevance ofthis approach to the African context.22 The EAC established in 1999 already has a protocol on the establishment of a customs union among other protocols. The following table may adequately illustrate the picture painted above. Main Origins of EAC Partners' Imports (2002) Million USD 0ritInI ASIA Rest of Partner AND the State OTHER REST OF FAR World KENYA TZ U; 59 (' I' 3.2.2.5 COMPENSATION ISSUES This relates to the issue of an appropriate mechanism to ensure that gainers are compensating losers in the medium term and losses are minimized in the long run. Tax revenue loss is a case in point as earlier seen. Such an immediate and a direct loss may create hesitation among member countries unless they foresee an immediate benefit from the integration process. More than revenue loss, however, most counties are concerned about fierce competition from relatively industrialized members such as Kenya. Ndung'u writes, ... various measures were tested to redistribute the gains from the common market, but failed to produce the results Uganda and Tanzania wanted. For example the East African Development Bank which was to promote industrial development with the states contributing equally to its capital base, was required to ensure that Tanzania and Uganda each got 38.75 per cent of its investments, against 22.5 per cent in Kenya. However, under a risk-adverse clause in its statutes, it could only finance 'viable' projects, most of which were in Kenya, especially during the 1971-1973 period. This greatly limited its role as a redistributive institution. The absence of coordinated industrial planning in EAC further limited the Bank's effect on redistribution. Under a tax transfer system, industries of less developed members were protected by imposing a tariff on imports from a country with which it had a trade deficit. There were regulations to encourage industries in Uganda and Tanzania, but location advantages kept pulling investors to Kenya. In the end, the tax transfer system was replaced with mechanisms to distribute common services among member states. Even now with the revival of EAC, the issue of compensation mechanisms is still unresolved. A recent study cautions that the principle of asymmetry should be applied carefully within EAC ... even if a compensation mechanism were to be designed, it may have to keep on changing since losers and winners keep on changing over time. 52 60 In a Panapress report cited earlier, the perception of unequal development and unequal sharing of benefits and costs of integration has contributed to delaying the process of negotiations. There are ambitious steps to anchor the trade agenda and promises of specific measures to assist less developed states in the EAC to undergo an investment boom by tapping the comparative advantages they have in terms of resources but discontent is still evident. 53 Such discontent can be discerned from Museveni's recollections while he served as Uganda's Minister for Regional Co-operation, ..... the only significant thing I did was to challenge the 'Umbridge Formula'. Professor Umbridge was a Swiss who had been hired to devise a formula for dividing up the assets of the East African Community ... 54 Museveni shows how unfair the formula was because it laid down more or less that those who had more assets should receive more. He argues that Uganda would end up getting less than either Kenya or Tanzania, although in paying back loans, the three countries would divide the debt equally. This leads us to discuss private sector participation in the integration process. 3.2.2.6 LACK OF PRIVATE SECTOR PARTICIPATION To the extent that implementation of the treaties requires the understanding, conviction, and confidence of the private sector, an active involvement of this sector in particular and the general public at large are crucial. This aspect of the regional integration process in East Africa is one of the major weaknesses of the initiative. Article 1 (a) of the EAC Treaty indicates that the Community will be, ..... people-centred and market-driven." However, what is happening on the ground suggests something to the contrary. Nassali sums it all up, The establishment of the EAC was intended to be people-driven. For that reason the East African Commission put the draft Treaty to public debate from May 1998 to April 1999. Unfortunately, to the question posed by the inaugural Secretary General, Ambassador Francis Muthaura, "are the people of East Africa involved adequately in the formation of the EAC policies?" the answer remains a resounding NO! The establishment of the East African Community has largely been a top-down process involving 61 the governments of the region, with the grassroots communities barely informed, educated or consulted about the process. The language and the style of the body remain bureaucratic and elitist. Only the urban based and educated have been marginally involved. There are no comprehensive and well-funded institutions in place to generate and package information for dissemination to the people. The masses of women, peasants, workers and the youth, in their respective organisations and communities, have not been brought into the process. Even NGOs have only been peripherally involved. Indeed, there is no evidence that the power elite in East Africa wish to alter fundamentally the existing traditional patterns of regionalism. Although the East African person is presented by governments as the beneficiary of cooperation, the same governments have conceptualised a child-like individual, who has no ability to contribute to the growth of cooperation, but rather is expected to accept, whatever the paternalistic governments decide. S5 Another challenge related to poor private sector participation is lack of political convergence which is discussed next. 3.2.2.7 LACK OF POLITICAL CONVERGENCE One of EAC's weaknesses is its vulnerability in the face of political change. The East African countries are fragile democracies, with weak institutions subject to political control. Most of the reforms implemented so far have been driven by the desire or obligation to please donors and may not be sustainable. Goldstein and Ndung'u, show the Kenyan experience as having proved that reforms, " ... under the sword of conditionality are likely to lose their enthusiasm once external funds dry Up."S6 They believe effective supranational bodies would rectify this danger. Yet countries are not willing to give up their sovereignty. Having discussed the challenges this far, we can look at what the EAC secretariat considers challenges to East African integration. 62 57 3.2.2.8 CHALLENGES OF DEVELOPMENT IN EAST AFRICA The EAC Secretariat considers the following as challenges to faster, equitable development and, therefore, a hindrance to quicker integration: 3.2.2.8.1 Economic Challenges Small national markets, coupled with low effective demand are identified as the first major economic challenge. This is closely followed by inadequate and inefficient infrastructure including roads, railways, ports, inland waterways, power and telecommunications. The Secretariat recognises trade imbalances between Partner States as yet another chalIenge. Next in the line are low levels of capitaVlabour ratios- as a result of low capital investment and foreign direct investments. Low levels of productivity in agriculture and industry are seen impediments to rapid integration. This is related to an underdeveloped service sector as well as weak capital markets. 3.2.2.8.2 Social Cballenges Low levels of income are to blame for slow integration. East Africa is experiencing widespread poverty, high incidences of disease-HIV, malaria and so on. This is coupled by ill-equipped education facilities. 3.2.2.8.3 Political Cballenges The Secretariat identifies threats to security as one of the political challenges. Civil strife in the Great Lakes Region and the Hom of Africa are singled out as the immediate security concerns. This has led to a large number of refugees in the region and fragile democratic systems 3.2.2.8.4 Tecbnological Challenges East Africa is experiencing low levels of acquisition and application of technology and low levels of human capitalisation. This in tum causes low levels of industrialisation and application of technology in agriculture. Low levels of resource base dedicated to 63 research and development are further stumbling blocks working against quick integration. Partner States have very low levels of computerisation hence low access to the information super highway. To tackle these problems, the Secretariat sees structural adjustments of individual economies, privatisation, liberalisation and regional integration as avenues towards ameliorating the dire development constraints in East Africa. 3.2.2.8.5 Challenges Identified in the Development Strategy 2001-2005 S8 Institutional Inertia The time frame for various actions is often too optimistic. The strategy does not always determine the feasibility of implementing various policy and programme actions based on country specific conditions. Policy actions, which require negotiation (protocol), such as free movement of capital or reduction of internal tariffs, lagged behind schedule. The time taken is not always estimated in a realistic manner. Decision Making Process The slow decision making process at the national level is raising concern. It involves several statutory steps. The speed of implementation is limited by the absence of a legally binding agreement, like a Treaty_ Therefore, Partner States are at liberty to implement certain aspects at their own pace since there is no legal obligation. This led the Secretary General to say, ..... Quite often, there have been expressions of intense or rigid national positions in the various regional fora at the expense of the need to harmonise positions and solidify regional integration."s9 It was an observation by Hon Amanya Mushega during a Community Council of Ministers meeting in Arusha, Tanzania, where he urged actors from member States to behave like soldiers by overcoming self-interests. Sequencing of Activities Sequencing of certain activities is sometimes inappropriate. For instance, the Policy action required development of adequate and reliable energy supply in the region demanded for further inter-grid connection by January, 1997. in order to have this undertaken, national power master plans should have been in place first. To the contrary, national power master plans were planned to be in place by January 1998. 64 Resource Constraints For those activities whose implementation required additional finances from governments, timing for inclusion in the budget process is crucial. The implementation of certain programmes is tied to the goodwill of the international community. With the flow of international resources not forthcoming at the required time, the programmes are not implemented on time. The implementation of large regional projects is constrained by the narrow resource base. Restructuring and Privatisation Pressures of restructuring and privatisation overstretched the capacity of some institutions making it difficult to play their appropriate role in carrying out EAC obligations. For instance, telecommunications and railways experienced this difficulty. While the large public institutions, in particular, were stuck in restructuring and privatisation, new actors in the respective industries were emerging (e.g. in telecommunications, airlines, banking and insurance). Yet the EAC programmes did not adjust to these changes as expected under the principle of subsidiarity which the EAC has endorsed. There is a time lag between changes made and change of attitudes and modalities of operation especially on the part of staff on the ground. Managing Distribution of Costs and Benefits Partner States are not equally developed. A major challenge in reaching agreement on the Common External Tariff (CET) is the differences in the levels of industrial development, economic structures and varying revenue implications. The perception of unequal development and sharing of benefits and costs of integration has contributed to delaying the process of negotiations. Delays are sometimes a result of lack of awareness of implications of the actions. These delays reflect, in a way, that this is a learning process rather than a deliberate effort to drag the process behind. More comprehensive identification of benefits and costs and analysis of options is not always carried out by the respective Partner States. 65 3.3 PROSPECTS OF THE EAC East Afiicans, like Ochwada, are convinced that integration efforts must de-emphasise economics and the role of the state as a provider of the "national cake" and become mediator of socio-economic relations. The role of the state in the new efforts must be on encouraging political debates with the input of civil society towards good governance. He says, " ... there are many historical indicators of social and cultural citizenship in Africa during the pre-colonial, colonial and post-colonial eras. East African integration history provides us with vivid examples of ways towards a new type of integration - the cultural values of the indigenous societies.,,60 Ochwada continues, The East African sub-region comprising Kenya, Uganda, Tanzania, Rwanda and Burundi has a common historical heritage dating back to the pre-colonial period. During those times people intermingled freely without the restrictions of artificial boundaries of country-specific laws. Communities traded among themselves within the sub-region and beyond without adhering to European nation state-defined citizenship. Moreover, individuals inter-married and related variously, including participating in political and cultural affairs of communities within which they resided. It was common for a sick person from the Samia hills (in Kenya) to make long journeys to Busoga, Uganda, to seek medical attention in that part of the world. Some Arab and Waswahili traders from the East African coastal region, for instance, established chiefdoms and kingdoms in areas as far as the Great Lakes of East Africa in the 19th century prior to colonialism. Traders formed alliances in foreign countries through marriage and blood brotherhood. The careers of the famous Swahili and Nyamwezi traders, such as Tippu Tip and Msiri, who created commercial empires in Kasongo and Katanga respectively, were built on shrewd alliances with local rulers or people based on either marriage or fictional kinship ties.6J Ochwada calls for the spirit of accommodativeness and ecumenl'sm I'n fuurte 'l Dtegratl.o n efforts of the region. He is sad to note that when the nationalist lead ers, Mw aI I' mu juli.u s 66 Nyerere, Mzee Jomo Kenyatta and Apollo Milton Obote launched their political projects based on African philosophies in the 1960s, they failed to infuse some of the indigenous systems and values in their grand model of the East African Community. Prospects for a long lasting East Africa will be in the people themselves. In line with these calls, Senelwa confirms that people-based integration initiatives are already underway, " ... Kenya's coastal towns of Lunga Lunga and Vanga have been hooked to the Tanzanian power grid.,,62 He continues to show that the project is being seen as an example of people-based cross-border initiatives that are likely to accrue from ongoing efforts to revive the East African Community. He is happy with this particular case in which Kenya and Tanzania are sharing available resources to improve the living standards of their citizens. In an effort to involve the East African citizens, a Committee on Fast Tracking East African Federation began its consultations in Uganda from Monday 11 October - Saturday 16 October 2004, after conducting similar consultations in Tanzania (27th September - 1st October 2004) and Kenya (4-8 October 2004).63 This clearly is testimony that the new EAC is working hard not to repeat the mistakes of the old EAC. In an effort to enhance participation of civil society and the private sector in regional co- operation activities, the new EAC is encouraging formation of regional level civil society, professional, women and private sector organisations, with a view to encouraging them to network and participate in co-operation activities. Already, the Mediation Commission of the EAC has facilitated the formation of the East African Business Council (EABC), comprising of apex bodies of private sector organisations in the three member states. The Commission would like to see the EABC play a more active role in the promotion of cross border trade and investments, and in lobbying for business friendly policies in the member states. The Council has already been granted observer status during the Summit and Meetings of the Commission and its subsidiary bodies. Civil societies and professional organisations have also responded positively to the reactivation of regional co-operation, by forming regional level organisations on their own initiatives.64 67 The new set up has tried to address the shortcomings inherent in the past co-operation initiatives. First, regional co.-operation has been reactivated at a time when the three member states are restructuring their economies, to give market mechanisms a larger role in the allocation of resources. All the three member states now ascribe to economic policies that are pro-market, pro-private sector and pro-liberalisation. In the social area, the three countries are also encouraging participation of their peoples in decision making. This commonality of both economic and social policies of the member states which are in conformity with the current international trend has been supportive of regional co- operation. With regards to perception of disproportionate sharing of benefits, this has been addressed through the decision of the member states to follow market based integration, rather than integration through joint ownership and management of common services, as was the case before. Any imbalances that may arise in the course of regional trading will be addressed through appropriate policies. A protocol has been signed aimed at addressing this imbalance with a so-called system of asymmetry. Tanzania and Uganda will open up their markets to Kenyan competitors over the next five years, while Kenya will open its markets immediately,6S I he EAC intends to set up co-ordinated. harmonised, and complementary transport and communications policies to improw existing links and to establish new ones, It is hoped this will enhancl: physical cohesion and promote the free now of goods and factors of production, In such an endeavour. the integration of each country's transport networks. adaptmg to the requirements of export-orientation and ad hoc pm\'lS10llS granting special treatment to landlocked countries are cl11cial to the success of operation,b6 Some of the projects alluded to here were highlighted earlier on in this study, On funding. the EAC recognises that regional integration and development in East Africa will require the mobilisation of vast resources, both within and outside the region. Despite its enormous potential, the region alone cannot raise effective levels of resources to meet the very huge and highly capital-intensive investments required. This is why there is need to co-operate with all like-minded organisations and countries. Over the years, EAC has laid a strong foundation for strategic partnership with the rest of the world and benefited from technical and financial assistance fro I m a arge number of 68 international aid and development agencies, including World Bank, European Union, European Investment Bank, Afiican Development Bank, Swedish International Development Co-operation Agency (SIDA), United Nations Economic Commission for Africa, German Agency for Technical Co-operation (GTZ), East Afiican Development Bank, United Kingdom Department for International Development (DFID), Norwegian Agency for Development (NORAD), Commonwealth Secretariat and Danish International Development Agency (DAN IDA). Other development partners with whom EAC expects to enter into co-operation programmes or have entered into Memoranda of Understanding with include France, India, Finland, International Labour Organisation, UN Food and Agriculture Organisation, Austrian Development Co-operation and the World Meteorological Organization. 67 East African leaders have learnt their lessons from the collapse of the defunct EAC. Hazlewood calls it, "the era of naive wishful thinking on regionalism. ,,68 Then, integration was viewed as a collective good, a good to be pursued for its sake. Exaggerated expectations and enthusiasm in the paper schemes that were created quickly collapsed when confronted with the reality of Africa's political economy. It was regarded as "a deus ~ machina" bringing immediate solutions to Afiica's many development 69 needs. Not anymore as seen from the words of Tanzania' s Mkapa, " ... everything that we have done up to now has just been the preparation, the work for integration has just begun ... the important goals of the EAC are to improve our economies, quality of life and relations between the three countries ... We are opening a new chapter in which none of the old mistakes will be repeated.,,7o There is hope that indeed the leaders will live up to their word. The present political will towards integration seems to be unprecedented as viewed from the utterances of the leaders like Kibaki of Kenya, " ... Kenyan President Mwai Kibaki called for the speedy integration of Kenya, Uganda and Tanzania into a federation. He said the reasons that were holding back the integration of the three sister states were trivial, noting that the factors that led to the formation of the East Afiican Community soon after independence were still tenable.,,71 Ugandans seem to be behind the idea of a federation as seen from the views of a cross-section which met a Committee 69 on fast tmclcing the federation, " ... participants backed the idea of establishing the East African Federation but warned that the East African governments should not rush over its fonnation.72 Nye is pessimistic about the idea ofPan-Africanisrn. He is convinced the belief that, "we are all Africans" does not seem to work at the bread-and-butter level. He notes that few tribes, if any, would accept migrations from elsewhere. People from densely populated areas cannot migrate to sparsely populated ones. Even with a common language, he does not see any serious hope for integration. Swahili which is the closest thing to a common language in East Africa does not mean much to Nye. He does not believe in comments like, ..... East Africa has obvious geographical unity.'.73 The only geographical feature he sees as being shared by the three countries is Lake Victoria. He writes, " ... in their natural features, there seems no reason to believe that any of the three levels - the individual, East Africa, Greater East Africa - is more a natural unit than another. The 'obvious unity' of East Africa is man-made ... 74 In spite of such reasoning, East Africans consider themselves as one and believe that for these same reasons, integration will be facilitated. Sentiments expressed by President Mwai Kibaki of Kenya may show how East Africans feel about themselves, Fifty years ago, I set off from my hilly countryside home of Othaya, boarded a train in Nairobi, and headed to Kampala to establish my new scholarly home at Makerere University. Transversing through the Central Kenya countryside by bus, hearing the train engines roaring through the vast Rift Valley, then briefly anchoring on the shores of Lake Victoria, before finally arriving in Kampala, the sounds of East Africa began ringing loud in my mind. I must say that this exposure to East Africa, during my early days, converted me into an East African. The socialization I got through interaction of people from Uganda and Tanzania inculcated in me the true spirit of East Africa. It was a spirit that was put to the test in my latter days, when I served in government in the 1960's and 1970's. As Kenya's Finance Minister, rIe mam. e d ful Iy 70 committed to regional integration, in the knowledge that we were better off enjoying the economies of large scale production. The East Africa Railways and Harbours, Airlines and a host of other shared services, indeed contributed to the economic strengthening of the region. By then we were ahead in our thinking and achieved, nearly twenty years earlier, what many regional blocs are today achieving. However, some politicians in the region were to have their way and narrow interests led to the break- up of the East Africa region. The break-up was costly and led to our individual countries looking inwards in areas that an outward looking approach had led to efficient service delivery. In the last two years we have seen a strong movement and desire to have a strong regional bloc following re-establishment of the East African Co-operation. Now, as President of Kenya, I have the opportunity, again to draw on my strengths to ensure fulfilment of the dreams I heard while I transversed through the region as a student. On the cultural point of view, regional integration solidifies the unity of the communities with a common history, language, culture and personal ties. It also provides an environment for a peaceful neighbourhood. This is true for the EAC where the three peoples share common culture and traditions.7s With such determination from current leaders, there are hopes that the EAC will grow from strength to strength. 71 ENDNOTES I Lee, M., Regionalism in Africa: Part oft he Problem or Part oft he Solution, http://www.polis.scienceporbodeaux.fr/voll Onsllee.pdf., Accessed on 8 October 2004 2 Asante, S.K.B., The Strategy of Regional Integration in Africa, (Accra, Friedrich Ebert Foundation, 1996),p.18. j JovanOVIC, M.N., International Economic Integration: Limits and Prospects, (London, Routledge, 1998). 4 Park. S. H. . The Current Status and Future Prospects of Regionalism and Multi/ateralism in the World Economy: A Case Study ofE conomic Relations Between EU and APEC in the WTO Era, www.ecsanet.orgIconferenceslecsaworld3/park.htm. Accessed on I I August 2004 5 Jilberto, A.E.F., and Mommen, A., Regionalisation and Globalisation in the Modem Economy (London: Routledge, 1998), p.142. 6 Wambugu, P., EAC Projects and Programmes, East African News Issue 12 October2003. pp. 9-10. 1 Babarinde, O. A., Analyzing the Proposed African Economic Community: Lessonsfrom the Experience oft he European Union. Prepared for the Third ECSA-World Conference on The EuropelUl Union in a Changing World, Sponsored by the European Commission, D-G X, Brussels, Belgium, 19-20 September, 1996. • East Afncan Statistics: Facts and Figures-2002, EAC Publications III, (Arusha, East African Secretariat, 2003),p.8. 9 Asante, S.K.B., Regionalism and Africa's Deyelopment: Expectations Reality and Challenges, (Great Bntam, 1997) pp. 29-30. 10 Nye, J.S., Pan-Africanism and East African Integration (Nairobi, Oxford University Press, 1966.) pp 84-85 II Ibid p. 85. 12 Hazlewood, A., African Integration and Disintegration: Case Studies in Economic and Political Union, (London, Oxford University Press, 1967). P.3. I) Ibid p.4. .. The Heart ofA frica. Interview with Julius Nyerere by Ikaweba Bunting, on Anti-ColoOlalism, New Internationalist Magazme Issue 309, January-February 1999, Ikweba Bunting was then Oxfam's -- Communications Officer for East Africa based in NairobI. He also belonged to a Pan-African Working Group. http://www.oneworld.orglnilissue309/anticol htm Accessed on 2 September 2004. IS Ariko,C., Personal interests Killed EAC - Kajura The New Visl'on K I S , . ampa a. alUrday, 16th October, 2004. Dr Henry Muganwa KaJura was then Uganda's Third Deputy Premier. 72 16 Nye, J. S. op.cit., p. 128. 17 Aryeetey, E. and Oduro A.D., Regionalism and the Global Economy: The case for Africa, in Teunisssen JJ., (ed) Regionalism and the Global Economy: The Case for Africa (The Hague, Forum for Debt and Development (FONDAD) 1996, pp. 41-42. II Asante. S.K.B., Regionalism and Africa's Development: Expectations Reality and Challenges, Op.cit., p. 13 J. I. Goldstein, A. and Ndung'u, N.S., Regional Integration Experience in the East African Region, An Organisation for Economic Cooperation and Development (OECD) paper produced as part of the research programme on Integration and Cooperation in Sub-Saharan Africa, March, 2001. http://www.oecd.orgldev/publication/tpla.htm accessed on I October, 2004 ZII Goldstein, A., The New Regionalism in Sub-Saharan Africa: More than Meets the Eye? OECD Development Centre, Policy Brief No. 20. http://www.oecd.orgldataoecdl43/53/2086585.pdf. Accessed on 8 October, 2004. 21 Lee, M. Op.CH 22 Asante, S.K.B., The Strategy of Regional Integration in Africa, (Accra, Friedrich Ebert Foundation, 1996) p.19-21. 23 East African Facts and Figures, 2002, Arusha, EAC Publications III, 2003. JO RavenhiII, J., The Future ofR egionalism in Africa, in Onwuka, R.I., and Sesay, A., The Future of Regionalism," Africa, (London, Macmillan, 1985) p.20? 2l East African Community: Challenges and Opportunities, Selected Benefits and Expectations, Arusha, EAC Secretariat, Occasional Papers No I, 2001 p.12. 26 opcit Jilberto and Mommen, p.138. 27 Ambassador Fulgence, M. Kazaura, Deputy Executive Secretary, EAC, in his speech during the opening of a Workshop on Competition Policies, Kampala, may 2000. Quoted from the EAC Secretariat Occasional Papers Issue No I of2001 21 Kasekende, L. (Dr), The impact of Globalisation on the East African Community, in Dialogue on the Regional Integration in East Africa: Proceedings of an EAC Seminar 19-20 March 2001 EAC Dialogue ~ (Arusha,EAC Secretariat 2002), p.188. 29 Kayizzi, R .• UK Traders Want Quicker Integration, The New Vision, (Kampala), II October. 2004 3U Alemayehu, G. and Haile K .. Regional Economic Integration in Africa. A Review of Problems and Prospects with a Case Study ofC OMESA http://mercury.soas.ac.ukleconomicslworkpap/ad obelwp 125.pdf Accessed on 22 October, 2004. 31 Ibid 32 East African Community: A distant Dream? Accessed on 7 June, 2004 http://www.kpmg.co.ke/other/East%20Africa%20community.html 73 lJ Osike, F., Support East Africanfederation - Museveni, The New Vision Kampala, 01 September, 2004 34 Nabudere, D. W., Opinion: Realising Dream ofE ast African Unity The Monitor (Kampala) September 8, 2004. Prof. Dani Wadada Nabudere then headed the Afrika Study Centre in Mbale, Uganda. J5 Opiyo, G., A Lot of Traffic on the Road to Integration, The East African Standard (Nairobi), 26 September, 2004 36 Senumbai, S., East African Tax Regimes to Be Harmonised, The Monitor (Kampala),October 19, 2004 17 Opcit Alemayehu, G. and Haile, K. " Goldstein, A. and Ndung'u opcit )9 East African Community: A Distant Dream? Op.cit. 40 Goldstein and Ndung'u op.cit. 41 Senumbai. S., op.cit. 42 Alemayehu and Haile, op.cit. 43 Sub-regiOllQI Blocs as Regional Building Blocks? http:// www.uneca.org/arialChap3.pdf Accessed_on 2 October 2004 .. Times Correspondent. Quit COMESA. SADC. EAC Countries Told, Business Times, Dar es Salaam. Friday, July 04, 2003 ., Ndung'u. N.S., Regional Integration Experience in East Africa. http://tcdc.undp.orglcoopsouthl2003- 21CoopSouth_E-50-65.pdf Accessed on 22 October, 2004. 46 opcit, Jovanovic, N.C .• p.335 . • 7 EALA Approves Budget, The Community Magazine of the EAC, Issue No I August 2004, p.5. 48 http:// www.uneca.org/analChap3.pdf Accessed_on 2 October, 2004 49 Trade Blocks: United we Stand? www.pwcgJobal.comlextweb/manissue.nsf/docidl589CBE2A94883CFD80256C3A00443285 Accessed on 90ct 2004 10 Goldstein and Ndung'u, op.cit. II Tanzania to Oppose "Lopsided" Customs Union. The African Perspective Panapress Dar es Salaam, 21 November, 200 I . 12 Ndung'u N. S. op.cit. Il open, Tanzania to Oppose "Lopsided" Customs Union .. Museveni, Y.K., Sowing the Mustard Seed: The Struggle for Freedom and Democracy In Uganda (London, Macmillan, 1997), p. 114. ' SS Th . . d e East African CommulIIlyan the Struggle for Constitutionalism: Challenges and Prospects http://www.kituochakatiba.co.ug/nassali.htm. Accessed on 6 October, 2004 Kituo Cha Katiba is the East Afncan Centre for Constitutional Development, Faculty of Law, Makerere University Kampala. 74 S6 Goldstein A. and Ndung'u, N.S. opcit S7 Infonnation in this section is from the EAC Secretariat Occasional Papers Nol, Arusha, 2001. sa The EAC Development Strategy 2001-2005, (Arusha, EAC Publication II, 2001), pp 12-14. S9 EAC Chiefs mells polarisation, The African perspective-Panapress, Dar es Salaam, 29 November, 200 I. 60 Ochwada. H, Towards Porous National Bordersfor East Africans (Nairobi), The Nation, 17 October 2004. 61 IbId. 62 Senelwa, K., Kenyan Border Towns Get Electricity From Tanzania, Nairobi, The East African Standard, 21 October, 2004. 63 Infonnation and Public Relations Office, EAC Secretariat, Arusha,IOth October, 2004 .. Addressing Shortcomings, http://www.eastafricaweb.comlEAClbackground.php. Accessed on 21 July, 2004. oS Ibid .. Goldstein, A. and Ndung'u op.cit. .7 EAC Developing Strategic Partnerships, http://www.eac.int Accessed on 10 October, 2004 . .. Hazelwood, A., The End of the East African Regional Integration, in Onwuka, R.I., and Sesay, A., the Future of regionalism in Africa, (London, Macmillan, 1985) p.206. 6' IbId 70 East African Countries ofK enya. Uganda and Tanzania Establish the EA C to Boost Trade, http://www.africa.com/featuresleac.htmIAccessed on 5 June, 2004. " Kibaki wants Speedy East African Federation, Nairobi, The African Perspective-Panapress - 17/03/2003. 72 Walulya, G.,Ugandans support EA Federation, The Monitor, Kampala, 12 October, 2004. 7J Nye, J. S., op.cit. p. 61. 7. Ibid 75 Viewpomt by Kenya's President Mwal Mibaki on the East African Common Market, The Banker Magazme. 5 November, 2003. ThIS artIcle was pubhshed in the October edition of The Banker MagazlOe. The Banker. an extremely mfluentlal publication, IS the Fmancial Times' global banking and general Interest magazme. 75 CHAPTER FOUR SUMMARY OF FINDINGS. CONCLUSIONS AND RECOMMENDA nONS 4.1 SUMMARY OF FINNDINGS There has always been a desire to unite Africans at home or in the Diaspora. African leaders realised that it was imperative that all Africans - wherever they might be - should unite. I African unity was the theme for all the Pan- African conferences since 1900 and it was the theme of other meetings and conferences organized by the OAU and other bodies.2 Yet, Africa and Africans are very far from the goal in spite of thousands of pages in declarations and the adoption of many charters. Political liberation in Africa was the harbinger of the embryo of economic integration and union which found eloquent articulation in the late 1950s with the emergence of Ghana as the first black independent state in sub-Saharan Africa in 1957. Observers of African affairs have suggested that in order to overcome its problems, Africa should pursue a pan-African regional economic integration, not as an alternative to, but as a facilitator of its development. Economic integration of the continent is a sine qua non for the development of Africa. 3 A prominent feature of the contemporary international system is the heightened tendency of some states to gravitate towards some degree of regional integration. The 1950s and the 1960s saw the idea of political and economic integration becoming attractive to political leaders of the Third 4 World. Among the numerous regional movements in Africa, was the East African Community which came into being in 1967 to formalise the common arrangements that had existed in East Africa. The East African Community collapsed in 1977, due to among others; the variability of economic policies then pursued by the member states, the change of Government in Uganda in 1971, the continued perception of disproportionate sharing of benefits accruing from economic integration and the lack of adequate compensation mechanisms to address the situation, and the exclusion of civil society and the private sector from participating in co-operation activities. 76 The experience of African regionalism over the years has had interlocking problems responsible for the disappointing results of the process of economic integration in Africa. S These include lack of economic homogeneity, sustained economic growth and political commitment. African customs unions are based on the European experience of market integration which is inappropriate. Regional economic ties can be traced to the 6 long-distance trade throughout Africa that existed before the Europeans arrived. Division on major political and ideological issues, clinging to sovereignty and control of economic policies add to the body of problems regionalism is facing in Africa. The large number of regional units on the African continent has led to membership of individual countries in more than one regional unit. Constraints to intra-African trade comes about as a result of deficient physical infrastructure (transport and communication), lack of institutional infrastructure (commodity exchanges and clearing houses), lack of adequate information on products, high uncompetitive prices of African manufacturers and instability of supply. 7 The present cash market of most African countries individually is not larger than that of a moderately-sized European town. Total national income is distributed over a large geographical area and the market is geographically fragmented.s Failure to integrate economically is partly blamed on political and administrative problems like location of industries or offices and the failure to federate. Political integration is not possible where there is lack of a single nationalist organisation.9 It cannot be assumed that ideology is always favourable to integration; it may exacerbate divisions by accentuating differences. Indeed, this was its role in East Africa. The effects of ideology were sometimes ambiguous. "East Africa" means, "the United Republic of Tanzania, the Republic of Kenya and the Republic of Uganda and any other coun~granted membership to the Community.,,10 The Treaty for the establishment of the East African Community was lh signed on 30 November 1999 in Arusha, Tanzania by presidents Benjamin William Mkapa, Daniel Toroitich Arap Moi, and Yoweri Kaguta Museveni of T . K anzama, enya and Uganda respectively. The Treaty is an offspring of an earll'er Th T one, e reaty for the 77 Establishment of East African Cooperation signed in Kampala, Uganda, on 6 June 1967 by presidents Mwalimu Julius Kambarage Nyerere, Jomo Kenyatta and Apollo Milton Obote of Tan7JUlia, Kenya and Uganda respectively. Article 5 (2) of the EAC Treaty provides the roadmap for the process of political integration, ..... the Partner states undertake to establish among themselves and in accordance with the provisions of the Treaty, a Customs Union, a Common market, and subsequently a Monetary Union and ultimately a Political Federation, in order to strengthen and regulate the industrial, commercial, infrastructural, cultural social, political and other relations of the Partner States." The beginning of formal cooperation in East Africa began with common services in 1895 at the commencement of the construction of the Uganda Railway from the Kenyan coastal town of Mombasa. It may however be argued that it is be difficult to tell exactly when the people of modem day East Africa began interacting with one another. There were no known boundaries as they are today and people used to move freely before colonialism. II There is therefore, a long history of proposals for closer economic and political relations, and federation was seriously discussed in the 1920s as well as the 1960s. The colonial governments within the three East African territories worked closely with each other since 1926 in an arrangement of the Conference of Governors. 12 The possibility of an East African Movement was first seriously investigated in 1945. The search for East African cooperation can be said to have gone through five phases. The first phase began at the end of the 19th century and was marked by several initiatives to integrate the economies of Kenya and Uganda. The second phase began in the early 1920s with the addition of Tanganyika to the cooperation which lasted till 1961. The third phase lasted from 1961 when Tanganyika became independent followed by Uganda 1962 and Kenya 1963 to 1977 when the EAC collapsed. Phase four, and the current one, started in 1984 with the setting up of the East African Mediation Agreement. IJ 78 Regionalism is, once again, being viewed as a solution to the major international economic problems of our times. In its current incarnation, regionalism has engulfed all major players in the world economy. The loudest message from these developments is that regionalism this time is here to stay. Regional blocs may be a bad idea in principle, but good in practice, even if they are a good idea in principle, they are likely to be bad in practice. 14 East Africans have come together in order to overcome the disadvantage of smallness by pooling resources, expanding markets, strengthening the effectiveness of domestic policy making, and enlarging markets available to regional firms and the subsequent increase in trade flows. IS Integration can accelerate growth if it facilitates increase in trade; integration should lead to larger units as against sub-regional bodies. 16 It has become necessary to find out the reasons for the wide consensus over the disappointing results of the process of economic integration in Africa, despite the continuous rhetoric about the need for regional cooperation and integration. 17 The 'traditional' schemes that integrate developing countries are structured along the lines of neo-classical theory of integration. This has made developing countries fail to live up to the great expectations of the founders and most, in fact, failed and collapsed. IS Notwithstanding the deepening economic and political crisis in a large number of Sub- Saharan (SSA) countries in the 1990s, governments continued their efforts towards greater regional integration on the continent. 19 The African plight is multifaceted and all-encompassing. The crisis is not only economic, but it is also political, social, cultural, ethical, environmental, and agricultural. The African plight is even more troubling when we consider the sub-continent's economic size. Contextually, today's roughly 500 million people of SSA have a combined GDP of about 5% that of the United States, which has approximately half as 2o many people. Forty one countries designated 'least developed' by the United Nations are in Africa. The gross national product (GNP) of all Sub-Saharan African countries, excluding South Africa, put together was approximately equal to that of Belgium in 21 1989. The combined East African GDP by the year 2002 is less than one third of that of Norway, way back in 1992. 79 The challenges to East African integration can be classified as external or internal. Further sub-classes can then be political, economic, social, global, institutional, technological, cultural or otherwise. Federation, even in its loosest fonn, requires a direct surrender of political jurisdiction. Certain powers must be surrendered to the federal authority.22 East African integration was not carried sufficiently forward before independence to be free from threats of disruption. African nationalists built organisations to capture the government at the level which mattered, and this was the territorial level. Once developed, it proved difficult to integrate the territorial nationalist organisations.23 African countries are pursuing economic refonn programmes imposed by the International Monetary Fund and the World Bank. This makes African economies more outward-oriented, often at the expense of regional integration.24 The experience of recent years shows that the regional element is missing from the adjustment programmes designed for Africa. It is only national concerns which have priority. Policies are designed and implemented at the national level and the aims of say the Structural Adjustment Programmes (SAPs), which are macro-economic, can be measured correctly at the nationallevel.25 Notwithstanding the fact that market integration has failed miserably on the continent, it continues to be highly regarded by most African leaders as a solution to Africa's growing marginalisation within the world economy. African countries continue to be actively involved in intra-regional market integration, rather than involving in attempts to integrate their economies into the world economy.26 Almost all of them have been modelled on the classical EU prototype, which is designed for developed countries.27 Africa possesses few of the features identified by the theorists as appropriate for integration. African economies compete in the world market as exporters of primary products. Again African economies are simply irrelevant to the needs of their neighbours. which is exacerbated by lack of infrastructure and communications. Instead, African economies remain tightly close to the metropoles.28 Increased global competition followed by tariff liberalisation will ultimately cause Africa to lose ground in EU 80 markets. The more competitive Asian Newly Industrialising Countries (NICs) are likely to squeeze out African exporters. Africa will have to operate in a far more hostile external 29 environment than before. The success or failure of regional integration initiatives should be evaluated in the context of the objectives it sets to achieve, and the political, economic and institutional context under which it operates. Judged against this objective, the consensus seems to be that none of the regional groupings in Africa have to date successfully fulfilled the requirements of a functional common market, in many cases not even that of a customs union.30 The regional integration experience in Africa indicates that countries are hesitant to create supra-national bodies and transfer power to them as a sanctioning authority. The secretariats that are formed do not have the legal backing to force countries to fulfil their obligations in accordance with their commitments.31 Again, variations in reaching macro-economic stability and the varying degrees of dependence on trade taxes slow down the pace of integration. Immediate loss of revenue and the expected long-term benefits emanating from regional integration may slow the process of integration. Uganda, for instance is scheduled to lose 75 billion shillings in taxes due to the customs union. (IUSO is currently equivalent to USHS 1,740). Matters are not helped by simultaneous membership of countries to more than one regional group is widespread in Africa. According to the United Nations Economic Commission for Africa (UNECA), Africa currently has 14 regional integration groupings, with two or more in almost all sub-regions. Kenya and Uganda are members of COMESA , but are yet to join SAOC. On the other hand, Tanzania is in SADC, but is not a member of COMESA. On top of this, they are members of IGAD and others. African economies are very vulnerable to external macroeconomic shocks from neighbouring economies, the so-called spillover effects. This vulnerability became clear in Eastern Africa during the 1980s, when the un-coordinated adoption of trade opening policies and floating of currencies exposed them to the vagaries of the world business 32 cycle. In East Africa, indicators like GOP, inflation and fiscal deficits do not show 81 significant convergence. Therefore, this calls for an appropriate mechanism to ensure that gainers are compensating losers in the medium term and losses are minimized in the long run. Immediate and direct losses may create hesitation among member countries to cooperate unless they foresee an immediate benefit from the integration process. The establishment of the EAC was intended to be people-driven. However, the establishment of the East African Community has largely been a top-down process involving the governments of the region, with the grassroots communities barely informed, educated or consulted about the process. 33 Another one of EAC's weaknesses is its vulnerability in the face of political change. The East African countries are fragile democracies, with weak institutions subject to political control. Other challenges include small national markets, inefficient infrastructure, and low levels of income, security, and technological challenges. More problems relate to institutional inertia, decision making process, sequencing of activities, resource constraints, restructuring and privatisation, and managing distribution of costs and benefits. EAC's prospects are posItIve in that people-based integration initiatives are already underway. For instance, Kenya's coastal towns of Lunga Lunga and Vanga have been hooked to the Tanzanian power grid, a project seen as an example of people-based cross-border initiatives that are likely to accrue from ongoing efforts to revive the East African Community. In an effort to enhance participation of the civil society and the private sector in regional co-operation activities, the new EAC is encouraging formation of regional level civil society, professional, women and private sector organisations, with a view to encouraging them to network and participate in co-operation activities. The new set up has tried to address the shortcOmings inherent in the past co-operation initiatives. Any imbalances that may arise in the course of regional trading will be addressed through appropriate policies. A protocol has been ~igncJ aimed at addressing this imbalance with a su-called system of asymmetry The EAC recognises that regional integration and development in East Africa wiII require the mobilisation of vast resources, both within and outside the region. The region 82 alone cannot raise effective levels of resources to meet the very huge and highly capital- intensive investments required. EAC has laid a strong foundation for strategic partnership with the rest of the world and benefited from technical and financial assistance from a large number of international aid and development agencies. East African leaders have learnt their lessons from the collapse of the defunct EAC. The present political will towards integration seems to be unprecedented as viewed from the utterances of the leaders. On the cultural point of view, the EAC solidifies the unity of the communities with a common history, language, culture and personal ties. It also provides an environment for a peaceful neighbourhood. 4.2 CONCLUSIONS One of the main themes for joint African action has been, from the beginning, the need to encourage economic cooperation between independent states. The characteristics of African economies are well known. The aim of joint action has been to lessen their vulnerability and dependence on the outside world by encouraging intra-African trade, cooperating in joint industrialisation plans, and by joining together as primary producers to get better terms from the developed world. Emphasis has primarily been on the need to present a common front to the outside world, and to negotiate together. These efforts are curtailed by serious difficulties of competition among African economies, infrastructural problems and dependence on Europe among others. Thus, the achievements of African cooperation has been minimal. African leaders have shown themselves willing to establish councils, commissions and organisations to promote economic cooperation, but in general they have not been wiI1ing to give them sufficient authority to make much advance.J4 Cooperation is an area where in Africa. decisions are made entirely at governmental level; there is as yet no public pressure on this issue nor even a public opinion that can be referred to. The main task of any organisation devoted to economic cooperation is to establish sufficient authority and to produce sufficiently cogent reasons to convince the political leaders that they should be willing to sacrifice short term 83 interests for long-term planning.3s The benefits of regional cooperation have not always been quantified and have not been fully understood and appreciated. The role of nationalism in subverting cooperation and resource mobilisation is clear in many African experiments with regionalism, including the EAC. 36 There is agreement that regional integration is beneficial, particularly when designed with fuller participation of the main actors in development. In the case of the East Africa, there is potential to expand investment and trade within the partner states. Regional integration can provide access to a wider trading and investment environment permitting economies of scale, diversification of economies, and promoting backward and forward linkages and creating the capacity to supply competitively. More importantly, regional integration promotes diversification and exports to regional markets hence builds experience before entering global markets. An integrated market will also provide a framework for countries to cooperate in developing common infrastructure, such as in financial services, transport and communications and mechanisms for joint exploitation of natural resources. Efficient regional integration will allow countries to surmount the obstacles posed by their relatively small size, permit greater economies of scale and strengthen their ability to trade on a global scale.3? There was no single cause of EAC death in 1977. It was a multiplicity of ailments, each of which by itself could have been survived. The EAC was not killed: rather it faded and died from a lack of interest in keeping it alive. The political will was lacking to keep the Community in being. Among the issues identified were disagreements on the transfer tax device which encouraged duplication of industries, the questionable effectiveness of the East African Development Bank (EADB), and the distribution of gains from the Common Services. Lack of a community government was a major issue because it complicated the institutional structure. Planning, therefore, was difficult in administering and controlling the Community. Tanzania complained that Kenya was benefiting from tourism due to free access by visitors to game parks in Northern Tanzania. Balance of payments problems did not help the situation and Amin came on the scene in Uganda. Uganda then ceased to be an effective participant in the Community. The situation was worsened by differences in ideology between "capitalist" 84 Kenya and "socialist" Tanzania. This was exacerbated by changing perceptions about the costs and benefits of the system. Then other influences like Tanzania's role in "Frontline States" diminished the concern with EAC.38 The new EAC can learn from these mistakes to perform better. 4.3 RECOMMENDA nONS Investment by Local Entrepreneurs In order for EAC to succeed, investment by local entrepreneurs should be encouraged to be able to attract foreign investment and technology. No investor will risk his money when he sees the local firms are running away and hiding their monies elsewhere. Integration is no longer a luxury for Africa to decide not to participate or not. It is an imperative.39 Political and Economic Stability Regional cooperation and integration can only be implemented under conditions of political and economic stability. In addition East African leaders must make serious commitment to the regional agenda this requires rationalisation of overlapping memberships and using East African funds, instead of donor funds to spearhead the regional agenda. Without economic autonomy, East Africa will continue to listen to the dictates of the developed world.40 The core of necessary prerequisites for success in regionalism includes an effective leadership with a political as well as an economic vision of what could result from cross-border integration. Implementation of policies should be simple and automatic, especially policies related to the removal of intra- regional tariff barriers and the definition of the Common External Tariff (CET). Mechanisms for compensating losers should be attended to early enough and restrictions on factor mobility should be removed. The revamp of the EAC has been hindered partially by deficiencies of each of these fronts. 41 EAC member states will have to deal with the challenges of globalization. new membership. declining import tariffs revenue and imbalances that may arise as the integration process intensities. Policy co-ordination is crucial to cushion against the 85 vagaries of the world economy and to build on existing strengths. Constraints such as weak infrastructure. costly transport. insufficient skills and red tape must be addressed. In particular. policies on infrastructure. communication networks, and information technology should be harmonized. If two member countries are willing to integrate more quickly. they should not be deterred so as to avoid having regionalism dictated by the slowest member. To ensure that efficiency gains accompany economic integration. members should establish a common policy towards foreign direct investment to encourage cross-border jOint production. Finally, resources will have to be devoted to public awareness of the opportunities arising from EAC, since the success of the process ultimately depends on the involvement and support of the people.42 86 ENDNOTES I Pheko, M .. Road to Pan-Africanism The Sowetan Johannesburg 15 November, 1999. 2 Ihonvbere, J.O. Pan-Africanism: Agendafor African Unity in the 19 90s .• Keynote address at The AII- African Student's Conference, Peter Clark Hall, University of Guelph, Guelph, Ontario, Canada, May 27, 1994. 3 Babannde. O. A., Analyzing the Proposed African Economic Community: Lessons from the Experience oft he European Union. Prepared for the Third ECSA-World Conference on The European Union in a Chug;", World. Sponsored by the European Commission, D-G X, Brussels, Belgium, 19-20 September, 1996. Babarinde O. A. was then at the Department oflntemational Studies, Thunderbird, The American Graduate School of International Management,Glendale, Arizona 85306-6011. 4 Asante S.K.B., The Strategy of Regional Integration in Africa (Accra, Friedrich Ebert Foundation, 1996), pp. 1-2. 5 Ibid 6 Komngs, P., and Meilink, H., Regional Economic integration in Sub- Saharan Africa, in Jilberto, A.E.F., and Mommen. A., Regionalisation and Globalisation in the Modem Economy (London: Routledge, 1998) p.12S. 7 Aryeetey, E. and Oduro A.D., Regionalism and the Global Economy: The case for Africa, in Teunisssen J.J., (ed) Regionalism and the Global Economy: The Case for Africa (The Hague, Forum for Debt and Development (FONDAD) 1996, pp. 11-64. 8 Hazelwood, A., African Integration and Disintegration: Case Studies in Economic and Political Union, (Oxford, London, 1967), p.9. :0 Nye, J.S, Pan-Africanism and East African integration, (Nairobi, Oxford University Press, 1966), p.3 19:;eamble to the Treaty for the Establishment of the East African Community signed on 30th November, II Mum .. J., (Lt Col), Brief to the Army Commander Uganda People's Defence Forces (UPDF), on the East African Community dated 14 January, 2003 done at Bombo General Headquarters. Muma was then the Desk Officer in Charge of East African affairs at the UPDF General Headquarters. 12 Hazelwood, A., African Integrallon and Disintegration: Case Studies in Economic and Political Umon (O)(ford. London, 1967), p.69. 13 Ndung'u, N. S .• Regional Integration Experience in East Africa, http://tcdc.undp.orglcoopsouthl2003_ 2/CoopSouth_E-50-6S.pdf. Accessed on 22 October. 2004. 87 14 Regionalism in trade is back--and here to stay. World Bank Policy Research Bulletin May--July 1992 Volume 3, Number 3 IS East African Community: Challenges and Opportunities, Selected Benefits and Expectations East African Community Secretariat Occasional Papers No I Arusha 200 I, p.ll. 16 Aryeetey, E. and Oduro, A.D. . Regionalism and the Global Economy: The Case of Africa. (in Teunissen (ed) Regionalism and the Global Economy: The Case of Africa (The Hague, Forum on Debt and development [FONDAD] 1996), p.l3. 17 Asante, S.K.B., The Strategy of Regional Integration in Africa (Accra, Friedrich Ebert Foundation, 1996), p. 18. II Jovanovic, M.N., International Economic Integration: Limits and Prospects, (London, Routledge, 1998). 19 Jilberto, A.E.F., and Mommen, A., Regionalisation and Globalisation in the Modem Economy (London: Routledge, 1998), p.142. 20 Babarinde, O. A., Analyzing the Proposed African Economic Community: Lessonsfrom the Experience of the European Union. Prepared for the Third ECSA-World Conference on The Europelln Union In II Changing World, Sponsored by the European Commission, D-G X, Brussels, Belgium, 19-20 September, 1996. 21 Asante, S.K.B., Regionalism and Africa's Development: Expectations Reality and Challenges. (Great Britain, 1997). pp. 29-30. 22 Hazlewood, A., African Integration and Disintegration: Case Studies in Economic and Political Union (London, Oxford Umversity Press, 1967), p.3. 2) Nye, J.S., Pan-Africanism and East African Integration, (Nairobi, Oxford University Press, 1966), pp. 84-85. 2' Aryeeley, E. and Oduro A.D., Regionalism and the Global Economy: The case for Africa, in Teunisssen J.J., (ed) Regionalism and the Global Economy: The Case for Africa (The Hague, Forum for Debt and Development (FONDA D) 1996. pp41-42. " Asante, S.K.B., Regionalism and Africa'. Development: ExpectatJons Reality and Challenges, Op.Clt .,p. 13 \. 26 Lee, M., Regionalism in Africa: Part of the Problem or Part oft he Solution, 88 http://www.polis.scienceporbodeaux.tT/voIIOnsllee.pdf. • Accessed on 8 October, 2004 27 Asante. S.K.B., The Strategy of Regional Integration in Africa, (Accra, Friedrich Ebert Foundation, 1996), p.19-21. 21 Ravenhill, J., The Future ofR egionalism in Africa, in Onwuka, R.I., and Sesay, A., The Future of Regionalism in Afijca. (London, Macmillan, 1985), p. 207. 29 Jilberto, A.E.F., and Mommen, A., Regionalisation and Globalisation in the Modem Economy (London: Routledge. 1998), p.138. 30 Alemayehu, G. and Haile K.,Regional Economic Integration in Africa: A Review of Problems and Prospects with a Case Study of COMESA http://mercury.soas.ac.ukleconomics!workpap/ad obe/wp 125.pdf Accessed on 22 October, 2004. 31 Ibid II Goldstein. A. and Ndung'u, N.S., Regional Integration Experience in the East African Region, An Organisation for Economic Cooperation and Development (OECD) paper produced as pan of the research programme on Integration and Cooperation in Sub-Saharan Africa. March 2001. http://www.oecd.orgldev/publication/tpla.htm accessed on I October 2004 33 The East African Community and the Struggle for Constitutionalism: Challenges and Prospects http://www.kituochakatiba.co.uglnassali.htm. Accessed on 6 October 2004 Kituo Cha Katiba is the East African Centre for Constitutional Development, Faculty of Law, Makerere University Kampala. J4 Hazlewood, A., African Integration and Disintegration: Case Studies in Economic and Political Union (London, Oxford University Press. 1967),383-387. Jl Ibid p.387. J. Aryeetey, E. and Oduro A.D., op.cit., p.40. 37 Wangwe.S .• M., and Rweyemamu D., Enhancing Regional Integration: A Case of the Great Lakes Region, The Mwalimu Nyerere Foundation Symposium on the Great Lakes Region: Economic and Social Research Foundation (ESRF), Reinforcing the Region's Solidarity and Setting an Agenda for a Culture of Peace. UOIty and People-Centered Development. Nile International Conference Centre,Kampala, Uganda, 8 - 10th April 2002 JI Hazelwood. A., The End of the East African Community: What are the Lessonsfor Integration? In Onwuka. R. and Amadu, S., The Future of Regionalism in Afnca, (London, Macmlilan,1985), p. 174. J9 Aryeetey, E. and Oduro A.D, Op.CII .• p.41. 89 40 Lee, M., Regionalism in Africa: Part oft he Problem or Part oft he Solution? http://www.polis.scienceporbodeaux.fr/voIlOnsllee.pdf. Accessed on 8 October, 2004. 41 Goldstein, A. and Ndung'u N.S. op.cit. '2 Ndung'u, N. 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