STATUS & EXPECTED OUTCOMES OF JOINING THE EAST AFRICAN COMMUNITY

By

Justin NSENGIYUMVASecretary General

Ministry of Commerce, Industry, Investment Promotion, Tourism and Cooperatives

January, 2007

Introduction

Regional and international integration is the 6th pillar of vision 2020.

Rwanda is a member of COMESA, ECCAS, CEPGL, and as of 30th Nov 06, EAC.

She became a full member of the COMESA FTA in 2004.

Rwanda is a member of WTO since 1996 and is negotiating the EPA with the EU under ESA.

The Rwanda regional Integrations committee has proposed a rationalization of overlapping memberships to Cabinet.

Rwanda admitted to EAC

30TH November, 8th Heads of State Summit admitted Rwanda and Burundi to EAC.

We have up to July 07 to complete accession procedures.

Within next 3 months, will agree with EAC on instruments of accession.

Financial year harmonization by June 2009. EAC Heads of State to meet urgently to

amend the treaty. Need to start preparations to participate in

the institutions of the Community.

BACKGROUND

EAC comprises the Republics of Kenya, Uganda and Tanzania.

1900 Mombasa established as a customs collection point for Uganda

1967 Treaty establishing the Community signed. 1977 The then Community collapses. 1st March 1996, Cooperation Secretariat launched in

Arusha 1996, Rwanda applies to join the renascent Community 15 January 2001 Community formally launched 2004 Customs Union launched. November 2005, EAC Heads of State establish a High

level panel to process the applications of Rwanda and Burundi into the Community.

July 2006, High level negotiations for Rwanda and Burundi launched.

Accession to EAC: Rwanda benefits

Common historical links with EAC Partner States

Cultural affinity Common positions in the Foreign and

Security Policy fields Key infrastructure through EAC partner

states Cooperation on trans border issues and

challenges, ( tourism, environment, health, etc)

Next 

POLITICAL BENEFITS

Learning from a diverse range of experiences.

Mutual support and peer pressure to sustain peace, security and good governance in the region.

Thinking beyond ethnic, and national identities towards a much bigger citizenship leading to a smooth globalization.

ECONOMIC BENEFITS

Best Practices in developing Business Environment.

Strong Voice in global trade negotiations (WTO, EPAS, TIFA’s, AGOA…etc)

Bigger skill base Joint Partnership in developing

infrastructure and cutting the cost of doing business in the region (roads, railways, ports, Airports, pipelines)

Telecommunication, removal of tariff and non-tariff barriers

Joint ventures and expansion of investments by business people.

ECONOMIC BENEFITS (Cont’d)

A wider market: over 120 million with entry of Rwanda and Burundi Even within COMESA, Rwanda’s trade is mainly with the EAC

Partner States ( 95% of exports for example)

Rwanda's Trade by RECFrw m

05000

1000015000200002500030000350004000045000

COMESA SADC ECCAS EAC

Rwanda X

Rwanda M

ECONOMIC BENEFITS (Cont’d)

Total Intra Regional Exports ($m)

0

1000

2000

3000

4000

5000

6000

1980 1990 1995 1998 1999 2000 2001 2002 2003

COMESA

EAC

ECCAS

SADC

EAC gateway to Rwanda Land locked to Land linked

economy

Intra group exports as a % of total group exports

02468

101214161820

1980 1990 1995 1999 2000 2001 2000 2002 2003

COMESA

EAC

ECCAS

SADC

Accession: Challenges

Weak Industrial base Weak skills base post genocide Possible revenue loss Creative destruction of production

structures Effect on household expenses need

mitigation

Accession: Challenges (Cont’d)

Transitional measures and support to private sector to maximize on the benefit.

Building up the analytical and negotiating capacity to help us play an active role in moving forward a better agenda in EAC.

Temporary revenue losses, risks of closing some businesses.

Accession: Preparations update

Establishment of Regional Integration Committee by Cabinet

Adoption of a negotiations strategy Establishment of 11 Sub Committees Strengthening of Technical Negotiations

Team. Launching of an awareness campaign Preparations for accession negotiations: Jan-

June 2007 Negotiations on implementation schedules

and modalities for protocols and programs

CONCLUSION

Benefits are higher than risks. A lot of sensitization, capacity building

and communication is needed through out.

Development of business and competitiveness culture in Rwanda remains critical.

This move is a great opportunity for Rwanda transformation.

THANK YOU FOR YOUR ATTENTION