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Pillars of EAC Integration

Article 5 of the treaty for the establishment of the EAC sets out four (4) pillars of the Integration:

  1. Customs Union
  2. Common Market
  3. Monetary Union
  4. Political Federation

Customs Union

In 2005, the Customs Union which is an entry point into the EAC Integration Process was established and has been implemented since. It sets out tax regimes in particular the common external tariffs which regulates the taxes on imports from abroad into the community partner states and these are:

  • If goods are coming as raw materials to be used in our industries, these are rated at 0% tax.
  • If they are semi finished products but are also required for use in our industries, these are rated at 10%.
  • Finished products are rated at 30%

There is an execption of a number of sensitive goods like sugar which is charged advorerum tax which can go upto 100% in order to protect our industries.

The single customs territory has also been operationalized with an aim of easing movement of goods, collection of revenue on imports and facilitate movement of goods through easing documentation which has been a major delay in our import and export.

Internal taxes on goods that are manufactured within the partner states and are marketed within the community have been removed as long as the rules on the country of origin are clearly observed.

Common Market

This came into force in 2010. The common market protocal provides for four freedoms:

  • Free Movement of Goods
  • Free movement of Persons and labor
  • Free movement of Services
  • Free movement of Capital

The protocol also provides for two rights:

  • Right of establishment- a citizen from the member state can set up a business in another member state. Upon doing so, he/she is eligible to reside in that member state.
  • Right of Residence  comes when an investor sets up business in a partner state.

Monetary Union

On November 30th, 2013, the East African Monetary Union (EAM) was signed by the then five heads of state and was ratified by all partner states in 2014.

Implementation of the provisions of these protocol is in progress.

Its important to note that, the protocol provides for macro economic criteria that must be observed by each partner states for at least three consecutive years. There are ceiling on inflation, deficit by governments, borrowing by government not exceeding 50% of the GDP and provision for reserves not exceeding four and half months imports. These is indoor to ensure that any member joining the single currency is competent and the use of the single currency will only start if the region has a minimum of three partner states complying with those micro-economic criteria.

Political Federation

This is the ultimate goal of the EAC integration process. In 2004, there was an attempt to fast track a political federation that never succeeded. Its important to know that all EAC partner states thereafter agreed to form a political federation and its only the model structure that is yet to be a greed on whether EAC becomes a confederation or a federation.

How do these benefit the youth?

There are a lot of opportunities this integration will bring to the youth including:

  • Job Creation and Employment Opportunities
  • Trade opportunities in the region
  • Investment Opportunities in the region
  • Free Movement in the region
  • Free Residence in a member state of your interest
  • Studying in the region
  • Among Others

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