|President Jakaya Mrisho kikwete:|
Combative president combative Country?
Tanzanians have, as usual, stalled the negotiations on the creation of Monetary Union in
East Africa. Media reports say that the Tanzanian delegation to the task force on the creation of a monetary union, at , opposed every item in the background Paper. Entebbe, Uganda
The background paper will eventually become the protocol for the East African Monetary Union. At the table for discussion was Article 24 which proposes a universal monetary and fiscal policy.
|President Kibaki of Kenya:|
The Giant of the region worrying Tanzania
These two proposals mean that member-states will have to cede some of their sovereign power to a regional authority such as an East African Central Bank and common Customs Authority.
The refusal by the Tanzanian delegation to discuss these issues did not surprise many Observers in the region. Tanzanian delegations have always stalled discussion on the creation of East African Common Market right from the start. At times, said a delegate familiar with Tanzanian attitude, “they just flatly refuse to discuss an issue, declaring an imaginary dispute.”
It is for this reason that the integration process has always virtually been forced down
’s throat, says a source familiar with the process. Tanzania
Beginning with the East African co-operation in the 1995 to the customs Union in 2005 and the East African Common Market in 2010,
is the reluctant partner, said the source. In fact, she agreed to the East African Common Market protocol when it became clear that other members were ready to leave her out. Tanzania
It is not clear why she is the reluctant partner. Experience shows that she has benefitted immensely from the integration of the region.
Tanzania has cut a niche market for its exports to , the largest market in the East African Common market block. Kenya
An Analysis of the trade data shows that
Tanzania manufactured exports to rose by 2000 percent from US$6.6 million in 1998 to US$135.4 million a year in 2010. Kenya ’s exports on the other hand rose by 243 per cent from $188.7 million in 1996 to $392 million in 2010. However, Kenya Tanzania’s informal exports to far exceed the formal exports. Kenya
The perils of her reluctance to join the EACM are also glaring. It has been reduced investment flows from
and a growth in smuggling. Kenya
With the expansion of the East African Community to include
Burundi and Rwanda and also South Sudan, is no longer a favoured destination for Kenyan investors. Tanzania
Unlike the past where
Kenya competed with Britain and South Africa, as sources of investment funds into , Kenyans are looking elsewhere to invest. In the recent past, some Kenyan Companies have divested from Tanzania to invest at home. Others have looked elsewhere. Tanzania
For instance, Major Kenya retail outlets appear to have shunned
denying the country’s manufacturing sector a major outlet for their products. Nakumatt Limited, the largest retail Chains in Tanzania Kenya has already opened three branches in Uganda and one in . Only Uchumi Supermarket has opened a branch in Dar-Es salaam, Rwanda . Tanzania
Banks are also following a similar trend. For instance Kenya Commercial bank, the first Kenyan Bank to venture into the Tanzanian market in the 1990s boasts of only 11 branches in Tanzania; 14 in Uganda; 19 in South Sudan and 9 in Rwanda.
Equity boasts of 38 branches in
Uganda and 4 in South Sudan. It has its eyes trained on Tanzania and . Rwanda Rwanda is higher in the radar than . Tanzania
One of the benefits of Monetary Union is an increase in intra-regional trade and investment which lead to better economic performance at home.
, by being a reluctant partner is losing out on investment funds from the region’s economic powerhouse-Kenya. Tanzania
Further, unilateral increases especially in Consumers taxes, had spawned increased smuggling of consumer goods from
. A Tanzanian newspaper recently reported that smuggling of Kerosene-a vital Kitchen input among the rural folk and urban poor- from Kenya Kenya to Tanzania has risen following the increase in tax on Kerosene in Tanzania