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The East African Community Common Market

Is forging a common economic platform encouraging productivity at the cost of employability?

The five East African Community (EAC) countries - Burundi, Rwanda, Kenya, Uganda, and Tanzania – ushered in a common market as of July 1st, 2010, a project that has been expanded from the existing customs union.

A common market is built in hopes of creating free movement of goods, services, capital, and people within the constituent states as one region. As seen with other economic integrations such as the European Union, a common market is the precursor to a common currency, which in turn is a significant prerequisite to a common political platform.

The good news is that the EAC stands to become more competitive on the international stage. Its combined Gross Domestic Product is about $75 billion, which is just under a quarter of South Africa’s GDP, and trade with neighbors like Sudan, Congo, and Ethiopia will be easier with a consolidated market. While local businesses have already had an advantage with the internal customs union, multinationals will pounce on the opportunity to sell to a now 120-million strong market.

The bad news is that each of the EAC countries will find the need to be more competitive on an individual basis too. Kenya, with a better-skilled and –educated workforce, stands to benefit most, while neighboring Tanzania fears that many of its people will be unemployed soon.

What does all this mean for us young folks? It could mean that in the short term, many youth who are working may lose their jobs. But it could also mean that they find opportunities elsewhere in the EAC to diversify and expand their experience, either with school, or work. The situation is no different for young entrepreneurs; while the scope of their market has just broadened, providing them with the opportunity to make more money, the scope of their competition has also grown.

How can sustainable partnerships be created in the EAC common market such that governments and businesses improve on peoples’ livelihoods? Further, how can these partnerships ensure stability when the time comes for a monetary union… and then a political union?

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(Posted on Vijana FM on Thursday August 5, 2010)
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