Monday, February 24, 2014

THE BENEFITS OF EASING EAC TRAVEL ARE COUNTLESS




On Wednesday Kenyan President Uhuru Kenyatta and his Rwandan counterpart Paul Kagame used their national identity cards as travel documents to cross into enter Uganda.

Never mind that they did so at Entebbe airport – it would have been a more powerful statement if they did it at their respective borders with Uganda, but the symbolism of this gesture could not be lost on anyone.

The plan is that starting in January, citizens of the three countries will be able to use national IDs, voters’ cards and student cards to travel across their borders.
Accompanying this are initiatives are moves to make working in either of the countries easy for its citizens.

Of course the truth of the matter is that our border communities have been making border crossing without the use of a passport for ages. Not only that have gone to school, worked, started businesses and enjoyed the social services from across the border. They will be understandably surprised at what the big deal is about.

This is a classic example of how the political class is often way behind the people they claim to represent.

 Fourteen years after the reestablishment of the East African Community with the signing by the presidents of Kenya, Tanzania and Uganda it has progressed to a customs union is speeding along to becoming a monetary union with the final destination being a political federation.

All these plans are all very well on paper but they mean nothing without the free movement of people and capital across the region.

We take it for granted but movement of people and the increasing ease with which they do it has a dramatic impact on the economy. It is not just a cliché but time is money.

I have been told stories of how during the previous East African Community one could deposit money on their post office account in Mombasa, take the train and withdraw your money all the way across the region in Kasese using just your post office pass book. That may sound rather dated in this era of the ATM card but it was a big deal then and had implications for the economy at the time.

Just think the losses traders and individuals would make if they were to stop at every district border on a Kampala-Mbarara trip? A three hour journey would be stretched out into an overnight journey and the added costs that come with food and board. As it is now you can ferry fish from Masaka to Kampala on the back of pickups a feat which would not be possible with numerous delays along the way. The traders would have to invest in cooling vans which would raise the cost of production and the eventual cost of the fish on our menus.

The Schengen area in Europe is a step higher than what we are attempting in East Africa. The 22-member states that constitute this borderless region, have done away with border protocols among themselves. Research into the benefits of this have found that trade grows 0.1% a year between neighbouring states.

One can expect the proportion in growth in East Africa will be higher, if only because we are starting from a lower base of inter-country trade.

The researchers into the economic benefits to the Schengen found that the benefits came from the immigrants being ready markets for goods from their home countries, immigrants also reduced the risk in signing contracts or sourcing produce from their home countries.

Fast tracking the free movement not only of people but of labour across, the region will have incalculable benefits to the economies of the region and will make future efforts at monetary union and political federation more realistic.

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