Thursday, July 01, 2010

Five nation free trade zone in East Africa begins today

As of today, five countries in East Africa began a common free-trade market. Burundi, Kenya, Rwanda, Tanzania and Uganda will begin to remove all barriers to trade, the process should be fully operational in 2015. Goods will begin to move freely across the region without being stopped for hours even days at national borders.

From the BBC, writer Tim Bowler describes the new economic zone.

Last November, the member states of the East African Community (EAC) signed a common market protocol, aimed at expanding the existing customs union.

All five countries have already adopted a common external tariff, an identical tax applied to imports from outside the bloc, and allowed duty-free regional trade with the exception of Kenya, the largest economy.

As of July, the common market aims to build on this - to enable the free movement of people, capital and services and abolish import duties.

But the EAC's ambitions go beyond pure economics. The hope is that member states will adopt a common currency by 2012, allowing them to move towards a political federation.

Vimal Shah, is the director of Bidco Oil Refineries, in Kenya, which makes and sells vegetable oils, fats, margarine, soaps across the region.

He says his company will gain from the common market.

"We support farms in Uganda and Tanzania. we buy all of their produce, we process it here in Kenya and then we sell the finished product. So now we will be able do that without any hassles."

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