Posted in Press Release
The second EAC Common Market Scorecard (CMS) 2016 which evaluates implementation of the EAC Common Market Protocol was launched yesterday in Kampala, Uganda by the EAC Deputy Secretary General in charge of Finance and Administration, Hon. Jesca Eriyo. The Scorecard 2016, which measures Partner States’ compliance to the free movement of capital, services, and goods, was developed by the World Bank Group together with Trade Mark East Africa at the request of the EAC Secretariat.
The Scorecard was developed over a period of 18 months under the supervision of the EAC Secretariat and Partner States. The areas of capital, services and goods were selected for scoping as they are fundamental to the operations of the Common Market.
Addressing the participants at the launching, the EAC Deputy Secretary General stated that “a number of reforms have been undertaken since the 2014 CMS. These have brought the total number of non-conforming measures (NCMs) down from 63 in 2014 to 59 in 2016.’’ While this shows progress it should be noted that all EAC Partner States remain largely non-compliant in their services trade liberalization commitments, added Hon. Jesca Eriyo.
Hon Eriyo disclosed to the participants that In CMS 2016 all Partner States were given full marks for compliance. Subsequent scorecards should consider assessing implementation of these commitments.The Deputy Secretary General informed the participants that the Scorecard is well aligned with the EAC’s implementation priorities. "It fosters peer learning and facilitate the adoption of best practice in the region”.
“The Scorecard will contribute to strengthen the regional market, grow the private sector and deliver benefits to consumers,” stated Hon. Eriyo.
She said the implementation in terms of recognition of certificates of origin, an issue repeatedly identified as a significant non-tariff barrier (NTB) in 2014, Burundi continues to earn full points and Kenya continues to score 90 percent. Tanzania’s recognition of certificates of origin has improved from 50 to 60 percent; Rwanda and Uganda’s scores have both declined, indicating a worsening performance in terms of recognizing certificates of origin of other EAC Partner States. Most countries improved their score on applying tariff equivalent charges, though such charges persist as barriers to intra-EAC trade, stated the EAC official.
Hon Jesca Eriyo disclosed to the participants that the EAC average of resolution of new NTBs for the 2016 period was about 54 percent, better than the 38 percent rate for CMS 2014. The EAC Deputy Secretary General called for greater information sharing regarding the Treaty and Protocol provisions in the Partner States. Some members of the private sector, including private sector apex bodies, were unfamiliar with the Protocol or with the commitments affecting their operations. Hon Eriyo urged Partner States to strongly engage and inform the private sector on the implications on these reforms on their day-to-day operations across the region and develop a private sector reform champions who could help push for implementation.
Catherine Masinde, the Practice Manager, East Africa, Trade and Competitiveness, World Bank Group, said, EAC Partners have done a commendable effort in removing barriers to free movement of capital, services and goods, but more needs to be done.
She said the EAC Scorecard provides transparent, rigorous, unbiased and client-led data on the key implementation gaps to the integration of the region’s economies. It also highlights possible reform areas to improve compliance to the Common Market Protocol”.
On his part Vice Chairman of East African Business Council Uganda, Kassim Omary, said it is of atmost importance to measure the extent to which the EAC Parter States are translating the Common Market Protocol into policies that support actualization of free movement of people and workers, goods, services and the rights of establishment and residence within the EAC Partner States.
Mr Richard Kamajugo, Senior Director of Trade Mark East Africa in-charge of Trade and Environment, said that the TMEA Program of support to the Common Market Scorecard has been running from 2012 to march 2017,under the EAC Investment Climate Programe. He said the total budget support to the program was $ 10.4m, through IFC and EAC (technical support), under a 5 component program aimed at increasing inter and intra-regional trade and investment through investment climate reforms supporting the EAC Common Market.
Posted in Press Release
A three-day meeting attended by a broad spectrum of stakeholders and experts from the Automotive Industry, Finance, Customs and Trade sectors as well as vehicle manufacturing company representatives from the East African Community Partner States has come to a close at the Sarova Panafric Hotel in Nairobi, Kenya.
The main objective of the meeting organized by the EAC and the Japan International Cooperation Agency (JICA), was to review and validate the progress report of the Comprehensive Study on Automotive Industry and provide inputs towards finalization of the same and also inform the EAC and potential private sector investors (both foreign and domestic) on policy options and modalities to promote and develop the motor vehicle industry in the region.
The EAC Industrialization Policy and Strategy (2012-2032) aims at ‘transforming the manufacturing sector in EAC through higher value addition and product diversification based on comparative and competitive advantages of the region’ and is currently under implementation.
The 16th Ordinary Summit of the East African Community Heads of State of 20th February, 2015 “directed the EAC Council of Ministers to study the modalities for promotion of motor vehicle assembly in the region, and to reduce the importation of used motor vehicles from outside the community, and to report progress to the 17th Summit.”
The Summit at their 17th Ordinary Meeting held on 2nd March, 2016 took note of the progress and roadmap towards finalization of the Comprehensive Study on the Automotive Industry in the region and directed the Council to expedite the process and to the 18th Summit.
In implementing the Summit directives, the EAC Secretariat partnered with JICA, which commissioned a consultancy study to be finalized in April 2017. The draft progress report on automotive industry in the EAC outlining the status of automotive industry in the region, and the initial policy issues emerging from the benchmarking missions was prepared. The team embarked on consultative missions to EAC Partner States to compile baseline information on the status of the automotive industry, and to Vietnam and Japan for a benchmarking exercise from 20th September to 7th October, 2016.
Japanese academicians shared their global best practices of promoting the automotive industry in the EAC region while the Partner States made presentations on the status and challenges facing the automotive industry in their countries.
It was observed that the motorcycle sector is growing rapidly in the EAC region. With the rise in number, the sales price drops due to economies of scale. Further, along with the increase of production volumes, local production is gradually initiated for parts and materials that meet the effective minimum production scale. In addition to the complete build-up unit sales itself, demands are increased for repair services and their associated areas (forward linkage effect). This sector therefore offers opportunity for rapid development and needs to be initial entry point for rapid development of the automotive industry.
The study missions to Vietnam and Japan revealed that the usage of local content was one of the drivers for the growth of the automotive sector. This is an area that EAC needs to explore further and adopt appropriate measures which will consequently spur the development of the sector.
The experts also noted, among other things, the need for policy coherence within different sectors for the progress of the automobile sector. It was also observed that for the automotive industry to grow there is need for volumes that can lead to economies of scale and therefore, a regional approach to develop the sector and leverage on the EAC, COMESA and SADC Tripartite Free Trade Area.
Having considered the mission study report and a summary of issues and observations deliberated, the meeting was declared officially closed by the Chairperson; Eng. Elli Pallangyo, Assistant Director, Ministry of Industry, Trade and Investment from the United Republic of Tanzania.