The 5 EAC Heads of State Signed the Monetary Union Protocol in Kampala November 2013
EAC INTEGRATION AT A GLANCE
Objective No. 2 of the treaty establishing the EAC provides that, “the Partner States undertake to establish among themselves and in accordance with the provisions of this Treaty, a Customs Union, a Common Market, subsequently a Monetary Union and ultimately a Political Federation in order to strengthen and regulate the industrial, commercial, infrastructural, cultural, social, political and other relations of the Partner States to the end that there shall be accelerated, harmonious and balanced development and sustained expansion of economic activities, the benefit of which shall be equitably shared”. Accordingly, the realisation of the four pillars of integration has reached this far:
Customs Union: (Came into effect, 2005)
In the theory of economic integration, a Customs Union is supposed to be the third stage of integration after a Preferential Trade Area and a Free Trade Area.
However, the Treaty for the Establishment of the East African Community provides that a Customs Union shall be the first stage in the process of economic integration. Therefore, real economic integration in the region commenced with the coming into being of the Customs Union.
The Protocol for the Establishment of the East African Community Customs Union was signed by the three East African Heads of State on 2 March 2004 in Arusha, Tanzania. The Republics of Rwanda and Burundi joined the Customs Union in 2008 and started applying its instruments in July 2009.
The Customs Union allows East Africa to operate as a free trade area where Partner States reduce or eliminate taxes on goods originating from within the community and have a common tariff on goods imported from other countries. It has resulted into the increase of volumes of intra EAC trade and the sustained GDP growth rate in all the partner states averaging 6% annually for the last 10 years.
Common Market: (Effective 1st July 2010)
The Protocol on the Establishment of the East African Community (EAC) Common Market entered into force on 1 July 2010, following ratification by all the five Partner States: Burundi, Kenya, Rwanda, Tanzania and Uganda. The Protocol was signed by the Heads of States on 20 November 2009, coinciding with the 10th Anniversary celebrations of the revived Community.
The establishment of the East African Community Common Market is in line with the provisions of the EAC Treaty. It provides for “Four Freedoms”, namely the free movement of goods; labour; services; and capital, which will significantly boost trade and investments and make the region more productive and prosperous.
The Common Market represents the second stage of the regional integration process (as defined by the Treaty for the Establishment of the East African Community), following the Customs Union, which became fully-fledged in January 2010.
Monetary Union: (Signed November 2013)
This will serve to transform the East African economy to operate with a common currency. This is to enhance the efficiency and performance of the Customs Union and Common Market.
Political Federation: (Last Stage)
This is a proposed political union of the five sovereign states of the East African Community – Burundi, Kenya, Rwanda, Tanzania and Uganda – as a single federated sovereign state. EAC Partner States shall arrange to have a Regional Political Union and harmonized operations. This will be fulfilled after the creation of a Single Policy Centre
• Population 143.5 million people (2014),
• Land area of 1.82 million sq. kilometres
• Gross Domestic Product (GDP) $110.3 billion (2014),
Ministry of East African Community Affairs (MEACA)
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