 |
| East African Community members flags |
East
African Community (EAC) member states need to remove all non-tariff barriers so
that deeper economic integration can yield to sustainable economic growth, a
report published by the African Development Bank (AfDB) revealed on Thursday.
AfDB
macroeconomist, Walter Odero, told journalists in Nairobi that the five nations
will reap heavily if there is free movement of capital, labour and goods within
the economic bloc. "As one of the fastest growing regions in the world,
the east African countries should encourage intra-regional trade in order to
tap into its growing middle class," Odero said during the launch of the
2012/2013 African Economic Outlook (AEO) which provides the latest data on
national economic performance across Africa.
The report, which
was written by the Pan Africa Bank with assistance of UN agencies and the
Organization of Economic Cooperation and Development (OECD), forecast Africa's
economic growth rate in 2012 will reach 4.5 per cent and 4.8 percent in 2013.
EAC comprises of
Kenya, Uganda, Tanzania, Rwanda and Burundi. The AfDB official said if
obstacles to full integration are removed, the region will be able to tackle
infrastructure and energy gaps. "As a region, they will be able to attract
both domestic and international funds to construct the big infrastructure
projects," Odero added. He noted that already the countries' economies are
closely linked. "The Gross Domestic Product (GDP)'s expansion trends for
Kenya mirror that of its EAC neighbors," he said.
AfDB Chief
Economist, Peter Ondiege, said the region is the second fastest growing in
Africa after West Africa. "Rwanda and Tanzania have the highest growth
rates while Kenya and Burundi are closely following," he said, adding
Kenya's economy could benefit from the EAC.
"The
country's mainstay, which is agriculture, is frequently affected by drought
while its information communications technology (ICT) sector is growing
fast," he said. "Kenya can harness its huge skilled labour to become
a hub of ICT in the region while Tanzanian and Ugandan agricultural products
could find a ready market in Kenya," said Ondiege.
"Brazil,
Russia, India and China are some of the few economic bright spots in the world
and region could tap into these markets by diversifying exports from
traditional exports zones especially considering the economic slowdown in the
United States and Europe, " Ondiege added.
Kenya's
Minister of Planning, Wycliffe Oparanya ,said the EAC can plan with data on a
wider basis of demand for consumer goods than before when they relied on
domestic markets.
According to
AfDB, the size of the African middle class has tripled in the last 30 years and
stands at 34 percent of population or 360 million while the Kenya's Ministry of
Planning estimated the number of those in the EAC stands at 34 million which is
equivalent to those of the new industrialized Asian tigers.
"There
are also 200 million African youth in the 15 to 24 age bracket and the figure
is set to double by the year 2025," the minister added. Oparanya said the
recovery of North African economies is good for Kenya.
"Some of the
nations such as Libya and Egypt are members of Common Market for Eastern and
Southern Africa (COMESA) which is Kenya's largest trading partner," he
said. UNDP Economic Advisor, Fatou Leigh, said the continent has showed a lot
of resilience even as some parts of the world face economic recession.
"African
nations should expand links inside the continent as they still have more space
to grow," Leigh said. Institute of Economic Affairs Chief Executive
Officer, Kwame Owino, said foreign direct investment is one of the solutions
for the EAC as it is associated with technology transfer. "Additionally,
Kenya's exports destined for the African markets have more value addition
compared to those destined to the developed world," he said.
Xinhua
The
New Times of Rwanda