East African Common Market

East African Common Market

 

a common tariff union joining the Republic of Uganda, the Republic of Kenya, and the United Republic of Tanzania.

The East African Common Market was formed in 1922 by the British colonialists, who included in it the colony and protectorate of Kenya, the protectorate of Uganda, the mandated territory of Tanganyika, and the sultanate of Zanzibar. The goal of organizing the union was to create conditions for the development of large agricultural production by European plantation owners and farmers in Kenya, the country with the most favorable climate and character for the Europeans. To this end a common customs tariff was instituted, based on the principles of protectionism in relation to the food goods produced on the colonists’ farms. In addition to the common customs tariff, the East African terri-tories had a single currency-finance system, income tax, and excise tax. In 1948 the colonialists strengthened the economic interdependence of Kenya, Uganda, and Tanganyika by establishing the East Africa High Commission, which became the East African Common Services Organization in 1961.

In 1961, trying to stall the granting of independence to Uganda, Kenya, Tanganyika, and Zanzibar, Great Britain proposed that the economic organization be supplemented by a political federation in order to solve the question of liberation from the colonial yoke after the formation of the federation. The African peoples frustrated this plan of the colonialists. Tanganyika achieved independence in December 1961, Uganda in October 1962, and Kenya and Zanzibar in December 1963.

Having won their political independence, the countries of the East African Common Market took control of its institutions for mutually advantageous economic cooperation. This was made easier by the economic links forged during the colonial period, the mutual supplementation of natural resources, and geographical position (Uganda has no outlet to the sea and almost all its external commerce is carried out through the Kenyan port of Mombasa; a significant number of Tanganyika’s external commercial links are likewise made through Kenya). Tangible results have been achieved on a series of problems of common economic politics. On Dec. 1, 1967, an agreement went into effect creating the East African Community. The agreement envisioned the formation of a common market and a tariff union, as well as coordination of the economic and financial politics of the participating countries; it was signed in Kampala (Uganda) by the presidents of these countries for a period of 15 years. In order to give financial and technical aid to the partner countries for mutual industrial development, the East African Development Bank was created at the same time in Kampala (Uganda), with a common capital of £20 million. The investment fund of the bank will be distributed by calculating the degree of industrial development of the countries: 38.75 percent for the development of Uganda and Tanzania and 22.5 percent for the development of Kenya.

In 1968 a number of African countries, including Ethiopia, the Republic of Zambia, the Somali Republic, and the Republic of Burundi, expressed a desire to join the East African Community.

V. P. PANOV

References in periodicals archive ?
23, Kiir requested the leaders of the East African common market area to not allow that a member state "be bullied by those who would want to cow them down so that they take whatever resources they take from the country".
The increasing power deficit and its high cost is affecting investor confidence and making Ugandan products uncompetitive in the regional East African common market.
The East African common market protocol came into force on July 01, 2010, with the aim to enable people in the trading bloc freely move and carry-out businesses without fear or favour.
The country has also adopted measures to attract investors, cutting taxes in line with recommendations from the East African common market proposals.
So far, the economic integration of the region has seen the development of an East African Common Market Protocol allowing the partner states to operate as a single market with free movement of goods, services, labour and capital; and with common taxes and similar trade laws.
Relationships among the East African countries are good, with the East African Common Market, allowing free movement of labor, goods and capital coming into full operation on July 1.
But the decisions to break up the French colonial federations in West and Equatorial Africa, the common public services of British West Africa, and the East African Common Market were surely made in Abidjan, Brazzaville, Accra, and Dar-es-Salaam, not in Paris and London; while in Malawi in 1992, the overthrow of the Central African Federation thirty years earlier was still being celebrated as an historic achievement of Dr.
The Dar-es-Salaam talks focused attention on trade imbalances within the East African common market, and the Kampala talks tried to set up a system in which these could progressively be reduced.
Additionally, the recently implemented East African Common Market Protocol encourages cross-border trade and industrial expansion within the East African region along with tax benefits for the market participants.
Harmonization of the financial services sector would play a key role in unlocking some of the benefits of the East African Common Market by removing barriers to the free movement of capital across the EAC region, as provided for in the Common Market Protocol, says Alloys Mutabingwa, EAC's Deputy Secretary General in charge of Planning and Infrastructure.
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