East African Community
The East African Community
The East African Community (EAC) is the regional intergovernmental organization comprising the Republics of Kenya, Uganda, Tanzania, Rwanda and Burundi. Currently headquartered in Arusha, Tanzania, the EAC, as it is known today, was founded on July 7, 2000. The EAC seeks to deepen the economic, political, social and cultural integration of its member countries to create a more prosperous, secure and united East Africa. The EAC aims to establish a common currency by 2012 and become a political federation by 2015, further uniting its member states.
The establishment of the East African Community has created an attractive investment opportunity for both domestic and foreign investors who have seized the chance to invest in businesses in the flourishing region. According to the United Nation’s 2010 World Investment Report, the region received more than $2 billion in foreign investment in 2009 alone.
The East African Common Market
On July 1, 2010, the EAC member states officially launched the East African Common Market, removing trade barriers between and among theEAC nations to boost regional trade. The Common Market Protocol allows citizens, products, capital and business services to move freely throughout the five EAC countries, giving the EAC member states access to an increased market size of 133.5 million people and a combinedGDP of $74.5 billion.
The three major economies in the EAC (Kenya, Tanzania and Uganda) have diverse strengths that make the region ideal for both domestic and foreign investment and trade. Kenya has an advanced economy – the largest in the EAC, while Tanzania has vast expanses of fertile land and other natural resources such as timber and gold, and Uganda is home to huge oil deposits discovered in 2006.
Kenya in the EAC
As the largest economy in East Africa, Kenya has been an integral part of establishing the East African Common Market Protocol and ensuring its success. Kenya and Rwanda were the first EAC members to forgo with work permits for citizens of other EAC member states in an effort to facilitate the free flow of labor in the region. Kenya has also been vocal in trying to do away with all non-tariff barriers that impede the flow of labor in the EAC, including increasing the efficiency of border checks for vehicles transporting goods to other EAC member states.
Kenya is working hard to fully integrate all members of the EAC into the Common Market. Kenyan companies like Kenya Airways have cross-listed their stock shares on the Kampala and Dar es Salaam stock exchanges, and the Kenya Commercial Bank has operations around the region. Kenya is among the top 10 sources of foreign direct investment to Uganda, with 27 licensed investment projects worth $158 million. Kenya is the second biggest investor in Tanzania, with 270 companies operating there providing more than 100,000 jobs.