Published by: Regional Policy Development - Inclusion of Civil Society and Private Sector - Institutional Strengthening

Transcription

1 Published by: Regional Policy Development - Inclusion of Civil Society and Private Sector - Institutional Strengthening GIZ Cooperation with the Secretariat of the East African Community (EAC) Support to the East African Community Integration Process,

2

3 Regional Policy Development - Inclusion of Civil Society and Private Sector - Institutional Strengthening GIZ Cooperation with the Secretariat of the East African Community (EAC) Support to the East African Community Integration Process,

4 Foreword Since 1998, as one of the first external supporters, the Deutsche Gesellschaft für Internationale Zusammenarbeit (giz) GmbH, on behalf of the German Government, cooperates with the Secretariat of the East African Community (EAC) in Arusha, Tanzania. The objectives of German support are to enhance capacities at the Secretariat to plan and develop the necessary policies and regulatory frameworks for promoting and coordinating the East African economic, social and political integration process. The EAC has grown substantially during these 15 years, in many regards. Rwanda and Burundi have joined the original three EAC Partner States Kenya, Tanzania and Uganda; the EAC Secretariat, GIZ s main counterpart, has grown in staff numbers and tasks. The regional integration has moved swiftly forward, seeing a Customs Union and a Common Market coming alive. As one of eight Regional Economic Communities (RECs) officially recognised by the African Union, the EAC has the reputation of being the most dynamically progressing REC in Africa. I am pleased to present in this report a concise summary of the main activities, results and impacts of the second phase of the EAC-GIZ Programme Support to the EAC Integration Process (2009 to 2012). With the objective to improve planning, coordination and monitoring of the regional integration process by the EAC Secretariat, the support provided was in compliance with core strategies of EAC, i.e. the 4 th EAC Development Strategy and the EAC Common Market Protocol. In particular, the program addressed the consolidation of the benefits of a fully-fledged Customs Union, the implementation of the Common Market as well as the development and strengthening of the regional productive sectors, supplemented by promoting institutionalized dialogue with private sector and civil organizations. These measures were complemented by organizational development, specifically by strengthening administrative processes and mainstreaming monitoring and evaluation into EAC programme and project management. The GIZ programmes contributions to the EAC Secretariat were not only facilitating, but pro-actively promoting certain controversial policies and topics (e.g. trade in services and worker mobility, Non-Tariff Barriers removal enforcement, Business Climate Index), thus strengthening the capacity and reputation of the Secretariat in handling integration processes competently. Furthermore, a substantial financial contribution was made in annual tranches to the EAC Partnership Fund (PF), a technical assistance pool managed by the Secretariat. I note with satisfaction from last year s programme review that GIZ s support has been highly appreciated by our partners. In particular, the technical competence of staff and experts, the commitment and complementarities of regional and international staff, the flexibility of the approach, the long-term support and the trustworthy and frank working relationships were commended. I would like to express my highest appreciation to the EAC Secretariat, to the representatives of the Partner States as well to the programme team of GIZ for the excellent results which we find documented in this report over the past three years. I am convinced that we will successfully continue our trustful and reliable cooperation in the next phase from 2013 to Dr. Regine Qualmann Country Director Tanzania Deutsche Gesellschaft für Internationale Zusammenarbeit (giz) GmbH

5 Looking back, we are pleased to state that the cooperation between GIZ and EAC has intensified and matured greatly over the past three years. On the technical level, the bi-annual EAC-German Joint Steering Committee meetings as well as the yearly planning workshops with our EAC counterparts have helped to achieve transparency and trust in working jointly towards the EAC vision of a prosperous, competitive, secure, stable and politically united East Africa. Also on a personal level, our cooperation with the EAC staff has prospered. The many meetings attended together throughout the region which are inherent to integration processes have created bonds that go beyond mere work relations. We would like to especially thank Mr. Philip Wambugu, Chairman of the EAC-German Joint Steering Committee and Director for Infrastructure, for his long-term commitment and guidance in steering our cooperation in the right direction. As one EAC official put it at a donor roundtable: If you want to know how to work with EAC, you should go and ask GIZ. This is proof for us that we took the right path, by listening, being flexible, supportive and above all, patient. The achievements out of this cooperation have been very rewarding: approval of the state-of-the-art EAC industrial policy, and now, in the current 3rd phase, involvement in its implementation which takes great strides. The first forum involving the EAC and private sector and civil society which is now an institutionalized EAC event. Or the East African Monitoring System (EAMS), an online regional monitoring system which is being used by EAC as well as the Partner States to monitor regularily the progress in East African regional integration. For the 3 rd phase, we feel honored to be now housed by our EAC partners in the historic former State Lodge, on the premises of the new EAC Headquarters. It is a great privilege to be offered a work place that historic as well as that close to our partners. We are looking forward with great enthusiasm to continue our cooperation with the EAC and to be part of the dynamic developments in the region. Some of these developments are promising like the predicted huge increase in economic growth, but some are worrisome, like the increasing religious tensions as well as tensions over natural resources like oil and gas, but also ivory. Asante sana to all our team members for their commitment and passion to regional integration, and karibu to the new phase ! Bernd Multhaup Programme Manager Support to EAC Regional Integration Miriam Heidtman Module Manager Organisational Development & Public Relation

6 Table of Contents German Cooperation with the East African Community Results & Impacts Topical Issues Enabling Regional Policy Development Institutional Strengthening Inclusion of Civil Society and Private Sector Cross-Cutting Issues Human Capacity Development Gender Partnerships Outlook on the 3 rd Phase of the EAC-GIZ Cooperation Programme ( ) The East African Community (EAC)

7 7

8 German Cooperation with the East African Community 8

9 German Cooperation with the East African Community The Federal Republic of Germany has expanded its bilateral cooperation with African states to include transnational regional cooperation in the past ten years. Cooperation focuses, among other things, on regional governance reform processes, peace and security, and regional economic integration. German development policy is committed to supporting self-sustaining development, promoting productive forces in the private sector and strengthening good governance. Since as early as 1998, German development cooperation, on behalf of the German Federal Ministry for Economic Cooperation (BMZ), contributes to the capacity development of the Secretariat of the East African Community (EAC) through a variety of programmes and projects. Germany s financial commitment to the EAC integration process amounted to about a total of 55.8 million Euros in This report summarises the activities, results and impacts of the second phase of the EAC-GIZ Programme, Support to the EAC Integration Process (2009 to 2012). The Programme objective was to improve planning, coordination and monitoring of the regional integration process by the EAC Secretariat. The German contribution to the EAC integration process combined measures for organisational development at the EAC Secretariat with those for improving economic policy competencies to establish the Common Market in East Africa. These measures were supplemented by promoting institutionalised dialogue with private sector and civil associations and organisations, as well as through support with information on and media coverage of the regional integration process in the EAC. Substantive contributions were moreover made to harmonising taxation procedures as well as patent law and pharmaceutical production in the EAC economic area. The main counterpart of the programme was the staff of the EAC Secretariat, based in Arusha, Tanzania. This integral approach of organisational development combined with sectoral advice and stakeholder networking provided the structure for the following five components: Organisational Development of EAC Secretariat Strengthening economic policy competencies of EAC Secretariat Institutionalised dialogue between regional business associations, civil society organisations and the EAC Secretariat Promotion of tax harmonisation in EAC Strengthening EAC Secretariat in WTO TRIPS and pharmaceutical sector promotion REGIONAL INTEGRATION Organisational development Economic Policy Non State Actors Revenue Access to Medicine 9

10 The mode of cooperation between GIZ advisors and EAC staff is depicted below. The German component managers are focussing to provide overall direction and advise on the respective topic areas in their responsibilities and reach out to their counterparts, while the regional GIZ experts- as representatives of East Africa - will also participate in Technical Working Groups and Sectoral Council meetings and can as such advise EAC Partner State representatives directly. Mode of Cooperation EAC Secretariat BMZ GIZ Component Component Component Component Component Regional Expert Technical Working Groups Sectorial Council Council of Ministers E.A.L.A. Summit of Presidents 10

11 11

12 12 Results & Impacts

13 Results of the EAC-GIZ Programme, Support to the EAC Integration Process (2009 to 2012) Topical Issues - Result 1: Enabling Regional Policy Development Within the set-up of the East African Community and according to Article 71(e) of the Treaty, the EAC Secretariat is, among other tasks, responsible for the coordination and harmonisation of the policies and strategies relating to the development of the Community. Supporting policy and strategy development within the EAC has formed a central part of the support provided by the EAC-GIZ Programme. Regional policy and strategy development processes are known to be lengthy and tedious, moving from one instance to another, often comprising several stages of validations, reconsidering and rewriting until final consensus and approval among the Partner States is reached. Below the different stages of the EAC decision-making process are depicted. EAC Decision Making Process Directive/Initiative by Com/EAC Secretariat ToR Sectoral Council/Consideration of ToR National Level/Consideration of ToR Technical Committee/Expert Group Forming/Validation by EAC Secretariat Regulation/Directive Policy Protocol/Annex Amendment/Proto Law Coord. Commitee/Sectoral Committee Partner States of Comment within 90 Days Sectorial Committee Legal & Judicial Affairs Council of Ministers EALA Summit/Head of States Publication in Gazette as Act of Community CoM Directive to Partner States National Parliaments to Ratification Coord. Of Implementation by MEACA/Secretariat 13

14 The steps of the EAC decision-making process The EAC GIZ Programme supported the development of the following policies, strategies and frameworks: The 4 th EAC Development Strategy (2011 to 2015) EAC Trade-related Intellectual Property Rights (TRIPS) Policy EAC Regional Pharmaceutical Manufacturing Plan of Action EAC Industrialisation Policy, Strategy and Five-Year Implementation Plan EAC Climate Change Strategy EAC Double Taxation Avoidance Agreement (DTA) and DTA Model Convention EAC Customs Management (Compliance and Enforcement) Regulations EAC Monitoring and Evaluation Framework EAC Gender Protocol EAC Consultative Dialogue Framework EAC Gender and Community Development Framework EAC Strategic Plan for Gender, Youth, Children, Persons with Disabilities, Social Protection and Community Development (2012 to 2016) Focus on Economic Policy/Common Market Impacts achieved by the EAC-GIZ Programme 2009 to 2012: GIZ supported the EAC Secretariat in preparing technical inputs, studies and workshops regarding The Free Movement of Goods The Free Movement of Services The Free Movement of Labour and Industrialisation In the area of Free Movement of Goods, the GIZ Programme strengthened the EAC Secretariat in monitoring an elimination mechanism of Non-Tariff Barriers (NTB) which led to the removal of several NTBs as well as the identification of new ones. The removal of NTBs contributed to an increase in trade between the EAC Partner States. Regarding the Free Movement of Services (which contribute to more than 50% of the regional Gross Domestic Product but have not received a lot of attention in the past), the EAC Secretariat and GIZ together organised several workshops and expert meetings to address the slow pace of implementation of the commitments on trade in services by offering a platform for exchange between Partner States and providing technical inputs and recommendations. As a result, further discussions on services liberalisation have been kick-started and Partner States are setting up structures and initiatives to solve the pending issues on implementation and negotiations of services commitments. In addition, a model template for the development of Mutual Recognition Agreements (MRA) was developed. Based on the template an MRA was signed for the engineers profession. It facilitates the free movement of service providers and workers through accepting qualifications and experience gained in other Partner States. 14

15 The issue of concern to business is that the current impasse in implementing services commitments on account of the artificial linkage between movement of services suppliers and the movement of workers is preventing the private sector from taking advantage of the opportunities created by the Common Market protocol. EABC Executive Director Andrew Luzze 15

16 16

17 Mutual Recognition Agreements (MRAs) EAC Partner States agreed on the Mutual Recognition of Academic and Professional Qualifications in order to facilitate movement of professionals in the region. Pursuant to Article 11 of the Common Market Protocol, EAC Partner States undertake to mutually recognize the academic and professional qualifications granted, experience obtained, requirements met, licenses or certificates granted in other Partner States. The free movement of professionals will be of benefit to the region as well as the profession as the diversity of service providers in the EAC markets will be increased, consumers will have more choices of services and institutions, and there will be better opportunities for mutual learning and the transmission of regulatory experience, all of which will contribute to raising professional standards and the level of access to professional engineering services. The first MRA to be signed so far was the one for engineers in the EAC on 7 th December Moreover, in cooperation with the GIZ Programme, the EAC Secretariat guided the formulation of the EAC Industrialisation Policy, Strategy and Five-Year Implementation Plan. The EAC Secretariat actively facilitated the discussions with different stakeholders on a modern regional approach to industrialisation which follows the international debate on Industrial Policy. As a consequence, Partner States have agreed on joint projects and initiatives that will foster development and industrialisation across the border. 17

18 EAC Industrialisation Policy and Strategy The EAC industrialisation policy was approved by the Summit of EAC Heads of State in November The German support programme to the EAC integration process facilitated the elaboration of the EAC Industrialisation Policy and Strategy through studies, expert meetings and an international conference on industrialisation and technology transfer. The fast pace of developing and approving this policy shows that industrialisation constitutes one of the EAC s priority policy areas. The vision of the EAC Industrialisation Policy is a globally competitive, environmentally-friendly and sustainable industrial sector, capable of significantly improving the living standards of the people of East Africa by A harmonised industrialisation policy and strategy is an important step to lead the region out of its overdependence on raw materials and agricultural commodities. Industrial development is probably the only conceivable way out of the poverty trap as it creates employment for people in urban areas and opportunities for self-employment and small enterprises. The EAC Industrialisation Strategy outlines key interventions focusing on six major aspects: Focus on developing six regional industries (iron-ore and other mineral processing; fertilizers and agrochemicals; pharmaceuticals; petro-chemicals and gas processing; agro-processing; energy and bio-fuels) Creation of a sound and supportive institutional environment for industrialisation Strategic incorporation of SMEs in regional value chains Strengthening of industrial information management and dissemination systems across the region Support of regional capacities in Research and Development, technology transfer and innovation Strengthening of the investment environment through complementary policies In addition, GIZ supported the EAC Secretariat in the development of draft roadmaps and sub-sector strategies on the harmonisation of education systems and training curricula, the drafting of the Customs Management (Enforcement and Compliance) regulations, as well as the drafting of the EAC European Commission Economic Preferential Agreements (EPA) development matrix. The inputs provided by the GIZ Programme strengthened the EAC Secretariat in providing technical steering of the integration process. 18

19 19

20 Focus on Tax Harmonisation Impacts achieved by the EAC-GIZ Programme 2009 to 2012 It is of utmost importance to shape the regulatory framework with regard to regional tax regimes in order to stimulate economic growth as well as provide funding for social services and national and regional development. Tax systems in sub-saharan Africa still lack adequate legal provisions that are required to create effective and efficient administrations and tax regimes. The EAC Secretariat has to take the lead in preparing its Partner States for the challenges the whole region faces with regard to tax avoidance and tax evasion as well as the decline of customs revenues. The EAC Common Market Protocol and Taxation The EAC Common Market Protocol provides for the free movement of goods, services, persons, labour and capital. The implementation of the Common Market is a gradual process which will take time. The Protocol envisions to enable free movement and to create wealth and economic growth through enhanced intra-regional trade. The key for improved trade includes harmonised taxation. The Private Sector is expected to take advantage of the Common Market by expanding to other EAC countries. Therefore, the EAC has to provide the Private Sector with assurance, especially with regard to tax regimes. Tax regimes should not distort economic decision-making. Consequently, EAC Partner States shall align taxation procedures and regulations, avoid double taxation and thus create a level playing field across the region. The ratification of the EAC-wide Double Taxation Agreement is an important step to avoid double taxation, to ensure that everybody pays the right amount of taxes in the right place, and to encourage and facilitate cooperation among the tax administrations. To implement in practice the provisions of this Agreement and the Common Market in general, the exchange of information among the tax administrations of the EAC Partner States plays a crucial role especially with regard to taxpayer data, but also in a broader sense concerning statistics, best practices and encountered challenges. 20

21 The amended EAC Excise Harmonisation Roadmap has been adopted, and an Excise Management Bill has been drafted by the Technical Working Group on Excises. The EAC Code of Conduct on harmful tax competition was adopted by the Council of Ministers. As a directive on administrative procedures, it is a guideline to remove tax distortions. A Model Convention for Double Tax Avoidance (DTA) between EAC and third party countries has been prepared and is currently awaiting adoption. An EAC DTA Agreement has been signed by all Partner States and awaits ratification in two more Partner States. Double Taxation Avoidance Agreement Double taxation is the levying of tax by two or more jurisdictions on the same declared income, and as such it creates a considerable hindrance to business transactions that go across borders. Bearing in mind the need for fiscal certainty among potential investors and the disastrous impact of double taxation on the developing vibrant business community in East Africa, the EAC Partner States have signed an agreement on double taxation avoidance in November It is based on similar agreements developed by the OECD and the United Nations. It provides a well-balanced and reliable structure for the fair, just and predictable taxation of all cross-border income and activities. At the end of 2010, a Memorandum of Understanding between the EAC Revenue Authorities was signed to facilitate exchange of information on tax matters (EoI) in the region. The EAC baseline study on EoI and a study on best practice on the EoI for Tax Purposes in Rwanda provide specific recommendations on effective implementation of the agreements that have been signed by the Partner States to foster the Exchange of Information. The validation of the harmonised templates for EoI to be applied by all EAC Revenue Authorities and Ministries of Finance for the EoI for Tax Purposes took place in August As a follow-up, several capacity development measures were conducted and officers trained on the new regulatory framework. 21

22 Focus on WTO TRIPS and Pharmaceutical Sector Promotion Impacts achieved by the EAC-GIZ Programme 2009 to 2012: The EAC Regional Intellectual Property Policy on the Utilisation of Public Health-Related WTO-TRIPS Flexibilities and the Approximation of National Intellectual Property Legislation was approved by the EAC Sectoral Council of Ministers of Health. The programme contributions were key in bringing about this framework document. The EAC TRIPS Policy guides EAC Partner States in amending their Intellectual Property legislation in order to be WTO-TRIPS compliant. At the same time, it enables the Partner States to fully utilise the TRIPS Flexibilities, which is essential in improving access to medicines in the EAC. The EAC TRIPS Policy The overall objective of this Policy is to guide the EAC Partner States on how their national intellectual property legislation must be adjusted in order to enable them to fully utilise the Public Health-related World Trade Organization (WTO) Trade Related Intellectual Property Rights (TRIPS) Flexibilities. It provides a comprehensive roadmap of how the latter can facilitate optimisation of the populations access to health and other health-related products. It further identifies the lowest common denominator of intellectual property legislation that can be approximated across all the EAC Partner States. The EAC Regional Pharmaceutical Manufacturing Plan of Action (RPMPOA) was approved by the EAC Sectoral Council of Ministers of Health. This roadmap guides the East African Community towards developing an efficient and effective regional pharmaceutical manufacturing industry that will supply national, regional and international markets with efficacious and quality medicines. The EAC-GIZ programme has significantly contributed to the development of the RPMPOA and supports the EAC Secretariat to implement the action plan through the EAC RPMPOA Steering Committee. Substantial donor support for the implementation of core elements of the action plan were secured from World Bank, Bill and Melinda Gates Foundation, PTB, Action Medeor, UNIDO and BMZ. Supporting the implementation of the RPMPOA contributes to capacity building of the EAC Secretariat and enables local pharmaceutical manufacturers to increase their market share from about 20% currently to at least 30% by The Federation of East African Pharmaceutical Manufacturers (FEAPM) was registered in Tanzania as Company Limited by Guarantee in November 2011 and has set up office at the East African Business Council. The Programme has supported the establishment of FEAPM and currently supports institutional strengthening and its service delivery to the members (advocacy/lobby, training, information delivery, representation at EAC and AU level). FEAPM is instrumental in enabling local pharmaceutical manufacturers to influence a public private dialogue at EAC and AU level, as well as to build local capacity to improve access to medicines for the EAC population. 22

23 Federation of East African Pharmaceutical Manufacturers (FEAPM) The FEAPM is an apex association of local pharmaceutical manufacturers within the East African Community Partner States. The secretariat is located at the East African Business Council (EABC) in Arusha, Tanzania. Its supreme goal is to develop the East African region as the principal manufacturing source of world standard medicines for Africa. By the year 2020, the local production capacity should meet at least 50% of the EAC s demand for affordable, quality medicines. The regulation of medicines and harmonization of technical standards and legislative frameworks have emerged as important components of the regional economic integration efforts. Dr. Ibrahim Assane Mayaki (CEO), on the launch of the the East African Community (EAC) Medicines Registration Harmonization (MRH) Project in

24 Topical Issues Result 2: Institutional Strenghtening Besides the EAC Secretariat s mandate for initiating and coordinating the harmonisation of policies and strategies in several different sectors, it is also responsible for the general administration and financial management of the Community. The Secretariat is a fast growing institution: as of November 2012 there were 178 permanent employees and 102 project staff, compared to 134 and 79 in Despite this substantial growth in staff numbers, lack of capacity (in terms of available staff) is one of the main hindrances for efficient management and coordination of the integration process. With the growth of scope of the integration process, the EAC Secretariat as well as the whole Community has met challenges in building and strengthening its institutional capacity. During recent years, numerous functional and institutional reviews have been undertaken, which, however, have not reached the decision-making point due to the complexity and the sensitivity of some of the changes under consideration as some of the suggestions include conceding more sovereignty of the EAC Partner States to the regional level. The Programme has supported institutional strengthening in areas jointly identified by the EAC and development partners in the EAC Capacity Development Action Plan (CDAP) such as Planning, Monitoring & Evaluation and Human Resources. Furthermore, the Programme has supported the EAC in strengthening its public relations, through professional training sessions for journalists and photographers on regional integration in order to improve factual reporting on EAC matters in the region. Institutional Review of the East African Community EAC stakeholders, including representatives of all EAC Organs and Institutions, widely share the view that the Community will not be able to achieve its ambitious strategic goals without a significant overhaul of its institutional framework and decision-making processes. The commissioning of a series of reports on general or particular aspects of institutional reform since 2004 testify to that consensus. The tremendous technical effort put into conceiving and discussing the necessary reforms, however, has not yet permitted to reach the decision-making point, due to the complexity and the sensitivity of some of the changes under consideration. The 20 th Extraordinary meeting of the Council held in April 2009 directed the Secretariat to undertake a comprehensive study of the Community and to propose institutional reforms aimed at transforming the Community into an organisation that will effectively and efficiently discharge the expanded mandate of the integration process of the Community. Subsequently an internal EAC task force was constituted and the final report was submitted to the Council in November The report contained recommendations for short-, medium- and long-term structural changes in order to manage the extended mandates under the Customs Union and the Common Market. Thereafter, the Council directed that the report be further reviewed by an external party. In 2013, a team of consultants is assisting the EAC to select and prioritise among the large number of recommendations those that are simultaneously essential to drive key Community priorities forward, are politically acceptable to the key stakeholders, and are financially affordable. 24

25 Our integration has come to a point where East Africans can touch and feel it. Ambassador Dr. Richard Sezibera Secretary General of the East African Community 25

26 Impacts Achieved by the EAC-GIZ Programme phase 2009 to 2012 A Quality Management System (QMS) (ISO 9001:2008) has been introduced to the EAC Secretariat within selected departments. Amongst others, the EAC Planning Policy and a Manual/Standard Operating Procedures were developed and are operational. As a consequence, the availability of transparent and streamlined EAC planning processes allows for the implementation of an efficient and effective EAC planning cycle throughout the year. The Quality Management System will be rolled out to all departments at the EAC Secretariat in the 3 rd phase of the EAC GIZ Programme (2013 to 2016), with the option to receive ISO certification for the EAC Secretariat. A custom-made web-based East African Monitoring System (EAMS) was programmed and is being applied by the EAC Secretariat as well as at the respective national Ministries of EAC Affairs to monitor the integration process. As a result, the EAC Council of Ministers takes more informed decisions based on the reports generated through EAMS. The system will continue to be developed with the support of the Programme in 2013 to 2016 to include modules for monitoring the implementation of the EAC development strategy, the Common Market Protocol etc. An online Total Records Information Management System (TRIM) was operationalised with the purpose of efficiently managing and tracking physical and electronic data within the Secretariat. As a result, EAC business records are secured, inappropriate access to and misuse of information is regulated and operational efficiency is increased through timely information sharing and decision-making. A Leadership and Coaching programme was jointly implemented with the EAC HR department to develop a leadership vision and corporate culture in the Secretariat and to Fundamentals of organisational effectiveness are core to successful institutions.these include clarity of purpose, facilitative organisational culture, rational organisation structure and processes, ability to acquire and manage adequate resources, internal harmony, satisfaction of strategic constituencies, transformational leadership, ability to adapt to change and, in the specific case of RECs, which are public sector institutions, adequate political will. Mariam Akoth Omoro, in her dissertation Organisational effectiveness of regional institutions: a case study of the EAC, 2008 improve leadership and management skills. The training and subsequent individual coaching led to some extent to behavioural changes and increased understanding and competence of executives and professionals (as documented by an ex-post evaluation). A visualisation workshop between EAC Corporate Communication and professional film makers and photographers has raised awareness on how to improve the visual branding of the EAC and the integration process itself. As a result, a photo safari was organized which provided the EAC with meaningful and emotional pictures on the different integration aspects. The pictures are now being used for EAC publications, newspaper articles and photo exhibitions. For improved cooperation processes between EAC and GIZ, annual joint planning workshops for the different areas of cooperation between the EAC and GIZ Programme were introduced. As a result, ownership and commitment from both sides to the joint activities were strengthened. Close monitoring and joint reviews have improved accountability for the cooperation between EAC and GIZ. 26

27 A picture says more than a thousand words The EAC and GIZ have embarked on capacity development for professional photographers from East Africa in order to put into realisation the visual EAC identity as well as to increase EAC s visibility and the objectives in the regional integration. Capacity building started with a Master Class Training Programme under the guidance of an experienced photographic artist, bringing together 10 professionals from newspapers, magazines, online publications and news agencies across all five EAC Partner States. The East African photographers subsequently joined the master trainer on a trip across their respective home countries to practice their skills in a photo-shooting safari covering points of special interest to EAC integration and how it affects everyday life of people in the region. The media training will be continued with journalists, photographers and film makers in

28 Topical Issues Result 3: Inclusion of Civil Society and Private Sector The lack of participation of the Private Sector and Civil Society in the East African integration process was one of the factors that led to the collapse of the first East African Community in the 1970s. It is thus considered crucial by the Partner States that the EAC draws its legitimacy directly from the people of East Africa. GIZ supported the EAC Secretariat to prepare a framework for structured dialogue. The Consultative Dialogue Framework was approved by the EAC Council of Ministers in November With regards to the Private Sector, one of my key priorities upon assuming office at EAC in April, 2011 was to involve the Private Sector, Civil Society and other interests groups in the integration process which the Treaty mandates me to do by providing a platform for dialogue like this one. The engagement of the Private Sector in the EAC affairs has been both informal and formal and my objective is to leverage this engagement to the next level. Ambassador Dr Richard Sezibera, 27 February 2013 at the regional CEO Forum, Kampala 28

29 EAC Consultative Dialogue Framework (CDF) The adopted Consultative Dialogue Framework is a structured guide which ensures consultative participation and inclusiveness of the Private Sector, Civil Society Organisations and other interest groups towards realising the Community objectives. It provides an opportunity to dialogue with the EAC policy makers at all levels as well as to contribute to the process of policy- making. It also institutionalises a forum convened annually by the Secretary General based on an agenda jointly agreed between Private Sector, Civil Society and EAC Secretariat. Within the Consultative Dialogue Framework, Private Sector and Civil Society actors dialogue with the EAC through thematic platforms. The main objective of the platforms is the development of position papers on areas affecting Civil Society and the Private Sector in the EAC integration process, such as Women in business, Private Sector Standards and Professional Services. The position papers are to be presented at the Annual SG Forum and to be considered by the EAC as important concerns of the Civil Society/Private Sector. EAC-PSO FORA Investment Investment forum Media Summit EAC SG FORUM Regional Dialogue Platform Annual Forum for all groups Sector-wide dialogues based on EAC Calendar of Activities EAC-CSO FORA Women Business Forum Youth Forum PPT on Taxation PDWs Forum etc etc Other PSO Regional Umbrellas Regional PSO Representative (EABC) Regional Professional Bodies Other Interest groups Regional CSO Representative (EACSOF) Other Regional CSO Bodies National Dialogue Platform (Ministry of EAC Affairs) Other BMOs PSO National Focal Points National Professional Bodies Networks of Other Interest Groups CSO National Chapters National CSO Networks Wider Private Sector Businesses working on wide-ranging sectors Wider Civil Society Organisations working on wide-ranging sectors 29

30 Impacts Achieved by the EAC-GIZ Programme phase 2009 to 2012 With the Consultative Dialogue Framework, the Private Sector and Civil Society have an institutionalised avenue for dialogue with the EAC. At the 1 st EAC Secretary General s Forum in December 2012, twenty-two resolutions in the field of trade and services, gender, health, youth and popular awareness of the EAC were developed to be proposed to the policy-making organs of the Community. The implementation is monitored throughout the year. As a result, it is expected that the Council will direct the EAC Secretariat to take action on the presented resolutions of the SG Forum and request the formulation of policies and strategies for the respective areas and concerns addressed by private sector and civil society. The Programme facilitated Non-State actors to contribute to the development of the current EAC Development Strategy (2011 to 2016) and supported the formulation of seventeen recommendations for inclusion in the final Development Strategy. As a result, the regional consultations allowed the private sector and civil society to fully engage in the regional integration process, as provided by Article 127 of the Treaty for the establishment of the East African Community. The Programme supported the EAC Secretariat to initiate a broad sensitisation and communication campaign. Twentyfive EAC Sensitisation champions from all five Partner States were nominated and national roll-out campaigns realised. As one result, a Rwandan radio talk show Tubivuge meaning Let s Talk EAC is now being aired on Radio 10 every Friday from 7:00pm to 8:00pm and various guests from government, civil society and private sector are invited for discussions. The youth in the region have the potential to foster creativity, innovation, leadership and sharing of information and nurture a bond of East Africanness with a distinct East African identity, hence the need to support and develop them. Richard Otieno Owora, EAC Head of Department, Corporate Communication and Public Affairs The youth of East Africa are a very dynamic and vibrant partner in the actual implementation of EAC sensitisation activities. Fifteen youth representatives have organised sensitisation activities within their universities to inform their peers on EAC structures, processes, topics and engaged them in discussions on the advantages and disadvantages of regional integration, also via the use of social media. For example, an EAC Club was put in place in Bujumbura, in which the youth meet regularly to discuss relevant issues of the youth in the EAC integration. In Uganda, the Youth Ambassadors started Constituency Trainings for Political Party Youth Leaders in areas of value-based leadership, gender mainstreaming in political organisations and information sharing on the EAC integration process. The collaboration with the youth, representing more than 50% of the population of the community, achieved important results in terms of EAC sensitisation activities, without any co-funding from the Programme. 30

31 During the sensitisation campaigns, the youth were referring to the EAC Sensitisation Manual, a booklet developed with the support of GIZ. The booklet describes the EAC history, its decision-making structures, organs and institutions and the subsequent steps on the road to integration. The manual on Strengthening Popular Participation in the East African Community is used by the EAC as main reference document in the enhancement of public awareness campaigns about the EAC and its objectives and activities. The Programme supported the East African Business Council (EABC) to relaunch its annual Business Climate Index survey which monitors the elimination of Non-Tariff Barriers (NTBs). For example, in 2012, forty Non-Tariff Barriers were resolved throughout the year. The Programme supported the hosting of the 5 th Annual East Africa Civil Society Organisation Forum (EACSOF) meeting in Bujumbura, Burundi from 29 th to 30 th March As a result, eleven resolutions were adopted and passed to the EAC Secretariat, e.g. on cooperation with CSOs in fighting proliferation of Small Arms Light Weapons (SALW); development of a Protocol on Good Governance; and allocation of resources to the department of Gender and Community Development for cross-cutting issues, including gender, youth and people with disabilities. 31

32 Cross-Cutting Issues Result 4: Human Capacity Development Capacity development is about strengthening partners, tapping potentials and facilitating change processes, and it is one of the key services delivered by GIZ. The EAC-GIZ Programme has supported EAC staff in the region acquiring specialist knowledge, skills and management expertise. Different stakeholders of the EAC integration processes, such as Civil Society Organisations, journalists, customs officer and the like have been brought together to receive specialist training and to practice peer learning. In all topical areas of the Programme, GIZ s capacity development approach offered basic and advanced training, networking and dialogue activities, as well as exchange and study visits. The integration agenda is speedy by design, I am confident we can have the Monetary Union Protocol signed soon but also sure that implementation will take a longer time. Ambassador Dr. Sezibera, responding to a recommendation by former German President Prof. Dr. Köhler for a more relaxed timeframe for embarking on the next stage of integration Impacts achieved by the EAC-GIZ Programme 2009 to 2012: Monetary Union The Programme supported two exchange visits for the EAC High Level Task Force s (HLTF) on the Monetary Union. The HLTF visited relevant EU institutions for an exchange of experiences on challenges of negotiating and introducing a monetary union. At the time of the current EURO crisis, this exchange visit offered valuable first-hand insights and analyses on pitfalls to avoid on the way to an EAC Monetary Union as well as on crisis management in a regional setting. The HLTF visited also the headquarters of UEMOA (West African Economic and Monetary Union) Commission in Ouagadougou, Burkina Faso and the BCEAO (Central Bank of West African States), in Dakar, Senegal. The lessons learnt from the exchange visits have been incorporated into the preparation of the EAC Protocol of the Monetary Union and have informed the process to the extent that it was decided by the Council of Ministers in 2012 that the signing of the Protocol on the Monetary Union shall be postponed to allow for more time to tackle salient issues. 32

33 Media Training Raising the awareness about the EAC in the East African population is a prerequisite for successful regional integration. By enhancing East African journalists and photographers understanding of the EAC integration process, the quality of reporting on and visualisation of EAC matters in the region has improved and will make the regional integration agenda more understandable to the East African people. Three journalist training sessions (for a total of fifty journalists from all five Partner States), one EAC visualisation workshop for the EAC Secretariat and one photographer training have been completed. As a consequence, the EAC has established a database of pictures to provide meaningful visuals about the EAC integration process, as well as set up a network of knowledgeable journalists who have improved their factual writing about the EAC integration process. Administrative Assistant Training Based on a training needs assessment, two EAC administrative assistant training programmes on interpersonal skills, customer service, communication, strategizing, managing diversity, self-organisation and time management was carried out. The result of these trainings was that the assistants felt affirmed in their work positions and were more confident in carrying out their duties (based on ex-post training evaluation). Leadership and Coaching Programme The Leadership and Coaching programme tried to start the development of a vision on leadership and corporate culture in the EAC Secretariat. The training and subsequent individual coaching for 24 staff helped them to open up to new situations, see the need to balance work and lifestyle, and brought about a mind-set change as well as more confidence in handling complex environments in their workplace (based on ex-post training evaluation). Media has the duty to tell the true story of our region and promote our collective desire for peace, security and development. Ambassador Dr. Richard Sezibera Secretary General of the East African Community Dr. Enos Bukuku, EAC Deputy Secretary General for Planning & Infrastructure and delegates of the High-Level Task Force for the East African Monetary Union (EAMU), meet with Dr. Horst Köhler, German President a.d., during a study visit to the European Institutions in January

34 High Level Dialogue on Industrialisation The EAC Secretariat with support of GIZ organised a threeday high-level dialogue on industrialisation with policy-makers and implementing institutions to identify the needs with regards to industrial development in the region. As a result, Partner States agreed to a common approach to industrial development in the region which lays the foundation for the later developed EAC Industrialisation Policy and Strategy. Double Taxation Avoidance At the end of 2010, an EAC Model Agreement on Double Taxation Avoidance (DTA) was signed by the Partner States. Three regional EAC Trainings of Trainers (ToT) on the DTA Model with a total of 64 participants from national revenue authorities (RA) were conducted. An EAC-DTA handbook and teaching material resulting from the training was published. It is currently being used by Revenue Authorities, Ministries of Finance and the Private Sector. East African Monitoring System Training on the operationalisation of the online East African Monitoring System (EAMS) was implemented at all Planning Directorates of the five Ministries for EAC Affairs (MEACAs). As a consequence, all MEACAs are currently using EAMS to update progress on Council Decisions. These inputs allow reports for Council Meetings to be generated with the click of one button to facilitate informed decision-making by the Council based on the monitoring reports. 34

35 Cross-Cutting Issues Result 5: Gender The EAC Treaty (Articles 121 and 122) outlines the important role that women of East Africa play in the economic, social and political development of the region. Prioritisation of gender in the regional development process is noticeable in: the 4 th EAC Development Strategy (2011 to 2016), the EAC Draft Protocol on Gender (2009), the EAC Gender and Community Development Framework (2009), the EAC Strategic Plan for Gender, Youth, Children, Persons with Disabilities, Social protection and Community Development (2012 to 2016), the Gender Audit for EAC (2011), and the Human Development Report (2011). However, although gender equality is mentioned in the 4 th EAC Development Strategy as a cross-cutting issue, the strategic interventions are still restricted to social sectors and as such not distributed cross-cuttingly throughout the different sectors. Furthermore, despite the several positive steps undertaken through legal enactments, policies and programmes already in place in the Partner States, various gaps and disparities in gender equality and community development still exist that have negative implications for sustainable development. Concrete data to reflect gender disparities is difficult to find and gender-disaggregated statistics have not yet been introduced in the EAC Partner States. 35

36 Impacts Achieved by the EAC-GIZ Programme 2009 to 2012: By including gender aspects in all its programme components, the EAC-GIZ programme has contributed to mainstreaming gender equality into EAC policies and strategies: Support to the drafting of the 4 th EAC Development Strategy (2011 to 2016) to include the formulation of the corresponding Indicator Framework featuring six indicators geared towards women and gender. Advise towards the inclusion of gender aspects and women empowerment in the EAC Industrialisation Policy and Strategy and the Climate Change Policy and Strategy. Furthermore, the Business Climate Index includes specific information on gender relevant issues in intra-regional trade. Liaising with the East African Business Council and the East Africa Women in Business Platform as part of the Consultative Dialogue Framework. Development of the EAC Regional Pharmaceutical Plan of Action (2012 to 2016) including gender aspects in its strategic action plan, especially in the chapter on skills and knowledge development. The Gender and Community Development Framework was reviewed with support of the Programme and continues to be a reference document for EAC. All interventions designed from the EAC with regard to gender derive from this Framework and is as such guiding the gender mainstreaming process in the EAC for example the on-going initiative for a planned project focused on empowerment of cross-border communities through shared markets with focus on cross-border women traders. In addition, the Programme also supported the development of an EAC strategic plan on gender, youth, children, social protection and community development for the period from of 2011 to The document provides strategies and possible actions to mainstream gender in the EAC projects and programmes. As a result of GIZ support, the EAC was able to In the specific area of women and cross border trade, there are major issues to be addressed such as high illiteracy levels among border communities, lack of market information, lack of storage facilities, poor infrastructure, ignorance on laws and policies, illegal routes, insecurity concerns, inadequate business skills and knowledge, lack of developed border market and gender-based violence. Perpetue Miganda EAC Principal Gender and Community Development Officer secure additional funds from other donors to start implementation on the strategic plan, including, but not limited to, the organisation of a gender week in 2012 in order to sensitise the EAC Secretariat on the importance of gender mainstreaming in all EAC sectors and programmes, as well as conducting a gender audit. Cross-Cutting Issues - Result 5: Partnerships Partnerships, cooperation arrangements, alliances and networks with other organisations operating in the field of international cooperation are vitally important for GIZ. An integral part of GIZ work therefore involves maintaining, managing and determining the strategic direction of its different cooperation formats. In many aspects the Programme collaborated with other development partners in order to increase efficiency, economise on available resources and to create linkages and enhance synergies. 36

37 The main partners were: Trademark East Africa (TMEA) Open Society Initiative for Eastern Africa (OSIEA) Oxfam Great Britain International Lawyers and Economists Against Poverty (ILEAP) The World Bank World Trade Organisation The African Development Bank United Nations Industrial Development Organization (UNIDO) EU Commission International Tax Compact (ITC) African Tax Administration Forum (ATAF) Other GIZ programmes on national, regional or continental level in Africa Impacts achieved by the EAC-GIZ Programme 2009 to 2012: Institutionalised Dialogue Framework between the EAC, Civil Society, Private Sector and Other Interest Groups The Programme signed a memorandum of understanding with Trade Mark East Africa (TMEA) for the development of the EAC Dialogue Framework. OSIEA and Oxfam Great Britain have also contributed resources and expertise to the training of non-state actors on EAC processes and structures. In addition, during 2011, the Programme initiated and chaired donor coordination meetings so as to enhance synergies in support of the involvement of Civil Society and the Private Sector in the EAC. The chair rotated to TMEA in As such activities by the different actors were coordinated, resources and comparative advantages leveraged as well as unnecessary duplication of efforts avoided. East African Civil Society Organisations Forum (EACSOF) GIZ successfully mobilised further development partners to support the EACSOF Secretariat in terms of human and financial resources. TMEA has signed a contract to finance the CEO as well as an administrative support staff for a period of two years. SIDA supported the development of the strategic plan for EACSOF and the Voluntary Service Overseas (VSO) and OSIEA were mobilised by GIZ to place two additional staff at EACSOF for membership acquisition and financial administration. All these organisations consider GIZ as focal point for their support towards EACSOF. Economic Policy In the highly complex area of Trade in Services, the Programme has closely cooperated with different international institutions such as International Lawyers and Economists against poverty (ILEAP), the World Bank, World Trade Organisation (WTO) and the African Development Bank, as well as other African Regional Economic Communities (RECs). The international expertise and cooperation helped to highlight important issues with regard to Trade in Services negotiations and implementation. The development of the innovative EAC Industrialisation Policy was only achieved through the involvement of and cooperation with international Universities, UNIDO and the EU Commission. Tax Harmonisation The Programme has entered various forms of cooperation with different partners, reaching from joint implementation of activities between EAC, Partner States and development partners (e.g. best practice exercise with Rwanda Revenue Authority), co-funding agreements on workshops (ATAF, OECD and International Tax Compact, ITC) and consultancies (excise impact study with TMEA) or Training-of-Trainers on Double Taxation Avoidance Agreements (ATAF, International Tax Compact). 37

38 38 The Programme also partnered with other donors as well as other GIZ Projects (GIZ Good Financial Governance Programme in Ghana; Good Financial Governance Programme in South Africa and Support to Administrative Reform in South Sudan) and African Organisations for example ATAF and the East African Revenue Authorities Technical Committee. Efforts to cooperate and exchange improved donor alignment significantly and resources were used efficiently. In addition, the tax harmonisation component achieved co-funding agreements with the BMZ Initiative - International Tax Compact as well as TMEA and OECD to combat tax avoidance and tax evasion in the region. Exchange with other GIZ Programmes at SADC and ECOWAS In several areas, the Programme cooperated with the GIZ Support Programmes at ECOWAS (Economic Community of West African States) and SADC (Southern African Development Community). In regard to Monitoring and Evaluation, the Programme has participated in an exchange workshop with the Planning Directorates of SADC and ECOWAS. The status of planning and M&E processes was exchanged and contributed to peer-learning among the three RECS. Based on gained knowledge and the good exchange of lessons learnt, the participants decided to meet again on an annual basis. Furthermore, representatives of the ECOWAS Commission and the SADC Secretariat participated in EAC events regarding trade in services and industrialisation. The cooperation allowed the EAC delegates to learn from the experiences of other regional economic communities. Partnership Fund In 2006, the EAC Secretariat established, in consultations with Development Partners, the EAC Partnership Fund (PF) for purposes of supporting the implementation of projects and programs of the Community. The overall objective of the fund is to enhance regional integration and socio-economic development of the EAC and to facilitate the harmonization and alignment of Development Partners support to the Community. The resources from the fund are used to Support the implementation of the EAC Development Strategy Provide technical assistance to the EAC Support institutional and human resource capacity building for the EAC Support key studies Any other areas as may be approved by the PF Committee Since its inception in 2006, the Fund has grown demonstrating Development Partner s confidence in the EACs quest for integration and its capacity to manage the Fund. The Fund has supported the EAC through technical and financial support in a number of priority areas which include: the Common Market negotiations, the negotiations for the EAC Monetary Union, Trade Facilitation in the EAC, support to EAC Sensitization Program, Institutional Strengthening and Capacity Building of the EAC and support to key studies and development of key documents in strategic areas. Partnership Fund Budged (in MIO US$) Germany has supported the PF from the very beginning and contributed 3 Mio EUR between

39 39

40 40 Outlook

41 41

42 Outlook on the 3 rd Phase of the EAC-GIZ Cooperation Programme ( ) The central approach of the 3 rd phase of the EAC-GIZ programme is to enable the EAC Secretariat to advance the East African regional integration process and the implementation of the Common Market, while accounting for the interests of non-governmental actors. A programme review conducted in 2012 recommended to focus the 3 rd phase of the EAC-GIZ programme on the following three modules: The EAC Secretariat has improved its steering of the EAC integration process. The EAC Secretariat is advancing the implementation of the core areas of the Common Market. Systematic account is taken of the interests of non-governmental actors in the EAC integration process. These objectives will guide the next programme implementation while sustaining and building on the achievements of the previous programme phase, as detailed in this report. Through its international and regional experts, the programme will provide continuous support to change processes as well as to organisational, process-oriented, sectoral and policy advice for the different Directorates of the EAC Secretariat, and the umbrella organisations of the Private Sector and Civil Society, EABC and EACSOF. Human Capacity Development (HCD) measures will continue to be a focus area for human resource and organisational development at the EAC Secretariat and at selected institutions in the Partner States. The Results Model of the EAC-GIZ cooperation programme ( ), with three modules, depicts the objectives as well as the intended outcomes and impacts. The GIZ Team in Arusha, Tanzania 42

43 EAC Integration - Result Model Impact Level involvement of public in integration process sustainable development access to medicine platforms at eacb + eacsof are sustainable increased public awareness of eac fiscal + macro stability advanced trade in goods + services cs network recognized by stakeholders improved decision making process eac sec fulfills its mandate effectively + efficiently cdf fully implemented M1 OBJECTIVE the eac secretariat has improved it s steering of the eac integration process PROGRAMME OBJECTIVE planning, coordination + monitoring of the regional integration process by the eac sec have improved M2 OBJECTIVE advancement of implementation of the common market M3 OBJECTIVE interests of nga are taken into account in eac integration eac public relations have improved promotion of Industrial production implementation of tax harmonisation + cu eac dialogue with nga has improved organization strengthened hcd for common market advance tis liberalization Outcome Level Abbreviations: eabc East African Business Council eacsof East African Civil Society Organisations Forum cdf Consultative Dialogue Framework hcd human capacity development nga non-government actors 43

44 The East African Community (EAC) 44

45 The East African Community (EAC) The East African Community (EAC) is the regional intergovernmental organisation of the Republics of Burundi, Kenya, Rwanda, the United Republic of Tanzania, and the Republic of Uganda, with its headquarters in Arusha, Tanzania. The EAC is one of the eight Regional Economic Communities (RECs) that have been officially recognised by the African Union and are considered to be the building blocks that will facilitate the continental-wide integration leading to the African Economic Community (AEC). Map of the REC Pillars of the African Economic Community (Source: Wikipedia 2013) CEN-SAD COMESA EAC ECCAS ECOWAS IGAD SADC UMA 45

46 The EAC Partner States are historically closely interlinked and depend on each other in their development perspective. Kenya, Uganda and Tanzania have a history of cooperation dating back to the early 20 th century, with a Customs Union, a common currency and a joint railway in place at that time. A first EAC was established during 1967, but collapsed in 1977, due to disagreement with the Ugandan dictator Idi Amin and the disparate economic systems of socialism in Tanzania and capitalism in Kenya. The three states lost over sixty years of cooperation and the benefits of economy of scale. The Treaty for the Establishment of the East African Community was signed on 30 November 1999 and entered into force on 7 July 2000 following its ratification by the original three Partner States Kenya, Tanzania and Uganda. The Republic of Rwanda and the Republic of Burundi acceded to the EAC Treaty on 18 June 2007 and became full Members of the Community with effect from 1 July The EAC is the only REC that has Ministries of EAC Affairs in every Partner State to support the implementation of regional policies and strategies at a national level. EAC Integration Schedule Customs Union Common Market Monetary Union Political Federation ? The four agreed milestones of the EAC integration process The implementation of the integration agenda in the EAC is more advanced than in other African RECs. Up to now it is the only African REC that has entered into a Common Market, and is also the only one that envisions a Political Federation at the end. The vision of the EAC is a prosperous, competitive, secure, stable and politically united East Africa; and the mission is to widen and deepen economic, political, social and cultural integration in order to improve the quality of life of the people of East Africa through increased competition, value added production, trade and investment. 46

47 Progress of the East African Regional Integration East Africa s regional integration process is evolving very dynamically in terms of the expanding scope of laws, policies and regulations that impact closer economic, social and political cooperation. The ratification of the Treaty and the establishment of the Customs Union in 2005 and the Common Market in 2010 according to schedule attest to the fact that the political process of deepening integration is on track. However, the technical process of implementation of regional policies at a national level is a challenge, as in every other integration process where national states need to concede sovereignty to regional governance structures for the sake of economies of scale. The formal application of South Sudan to join the EAC indicates that it sees a membership in the EAC as a crucial step for its own development as a nation. Integration is significant in the economic and commercial sector. The region s economy grew at an annual growth rate of over 6 percent in 2012, with every country performing within a band of between 4 percent and 11 percent 1. Intra-EAC Imports, USD million Real GDP per capita EAC total, USD Trade between EAC Partner States doubled between 2006 and 2010 Positive Economic Growth in the EAC Partner States 1 The State of East Africa,

48 However, the region s trade with the rest of the world expanded faster, driven by its import-consuming economic growth performance. Foreign direct investment has expanded across East Africa. Some of this has come from within the region as firms invest across borders in areas such as cement production, financial services, tourism and manufacturing. The EAC region experiences growth in foreign direct investment attracted by its natural resource endowment, growing economies and integrating markets. Recent discoveries of oil and gas in the region have further contributed to this development. To improve connectivity for easing the flow of goods and services and to facilitate a competitive regional economy, infrastructure roads, rails, ports and telecommunication is also being jointly planned and developed and is attracting funding because of its regional nature and intent. The ports of Dar es Salaam and Mombasa continued to function at close to full capacity. Mobile phone subscription across the EAC grew from 3 million in 2002 to 64 million 2010, and the majority of East Africans are accessing the internet through their mobile phones. Significant efforts are also being undertaken in harmonising health and education policies. Each country has increased healthcare spending per capita and the primary enrolment ratio has risen in all but one country (Uganda). In the area of peace and security, the region is facing the emergence of severe cross-border security challenges, such as terrorism, human and wildlife trafficking, as well as maritime security. In 2006, the EAC developed a Regional Strategy on Peace and Security which in 2012 has been updated to reflect the new challenges. The new focus of the EAC on regional peace & security issues also becomes obvious through the long-awaited signing of the EAC Peace & Security Protocol, in February The number of joint military exercises in which all five EAC countries participate is also increasing. The purpose of the exercises is to improve the capacities of the EAC Partner States armed forces to combat common security challenges. The EAC is also strongly promoting the principles of democracy and good governance in the region by developing Joint Principles on Elections Observation, Monitoring and Evaluation. These efforts are geared towards the ultimate goal of the East African Integration process, the Political Federation of East Africa. Challenges in the EAC Integration Process The accession of Burundi and Rwanda has not only enlarged the Community but has triggered important changes in the institutional setup governing regional integration. The EAC Secretariat has grown substantially and is struggling to set up an effective structure capable to comply with the growing number of tasks. As the EAC will move from the current level of cooperation towards deepened economic and political integration over the next five years, one of the main challenges will be to bridge the growing gap between agreed policies and ratified protocols at the regional level and their factual implementation by Partner States. The links between the regional and the national level urgently require further strengthening in order to improve: Alignment between national and regional development strategies and plans Involvement of non-state actors in the integrations progress Institutional capacities both at regional and national level, especially regarding the transformation of regional agreements into national law and regulations Capacity for coordination, monitoring and evaluation of integration progress and impact including statistical coverage Symmetric levels of industrial development leading to balance in allocating the benefits of regional trade and integration Further issues challenging the process of political integration are: Inadequate institutional and financial support Partner States becoming more sensitive and in many instances more reluctant to give up sovereignty 48

49 EAC Facts Population East African population is currently amounting to 139 million people, grew by 24 million between 2005 and 2010 and is estimated to reach 237 million by Population Under Age 15 in East Africa ( in Mio) Burundi Rwanda Uganda Kenya Tanzania Conflicts Most of the EAC Partner States enjoy relative peace and security. However, they are considered vulnerable because of their geographic position as they are surrounded by countries prone to conflicts, such as Sudan, Somalia and the Democratic Republic of Congo. The porous and insecure borders in the region serve as fertile grounds for organised crime, human trafficking, small arms and light weapons smuggling, drug trafficking, and as of recent, alarming levels of wildlife crime. These security issues are on the rise in East Africa. Al-Shabaab remains a potential threat for the whole region. Violent conflicts, stemming from cattle rustling are still wide-spread among pastoralists and increasingly severe in Kenya and Uganda. Recent religious tensions in the region between Muslims and Christians have claimed a number of lives. East Africa s geopolitical importance is demonstrated by the deployment of Ugandan, Burundian and Kenyan troops within the African Union Mission in Somalia (AMISOM). Human Development According to the UNDP Human Development Report 2011, the Human Development Index had improved since 2002 for Tanzania and Kenya, and quite sharply for Burundi. It declined slightly for Uganda and was unchanged for Rwanda. A general trend of stabilising or declining HIV prevalence can be observed in all EAC states, except for Uganda. The battle against infant and child mortality is yielding results in the form of reduced mortality rates across the region in the last decade. Per capita spending on healthcare has increased in all countries. East Africans are living longer, with an average increase of two years in their life expectancy (average life expectancy for women: 55, for men: 52). This is partly due to higher investments in healthcare spending by national governments. More people live above the poverty line than before. However, the absolute number of East Africans living in poverty increased from 44 million to 53 million, so roughly one third of East Africans still live in poverty. Politics By 2010, 4 of the five EAC countries were considered partly free with the exception of Rwanda not free (The status designation of Free, Partly Free, or Not Free is determined by the combination of the political rights and civil liberties ratings of a country or territory, from: Freedom in the World Survey 2011 by Freedom House). Corruption remains a challenge in the region. The prevalence of bribery was perceived to be highest in Burundi and the lowest in Rwanda. The police, revenue authorities and judiciary were cited as the most corrupt institutions in the region (The State of East Africa 2012 report). 49

50 German Cooperation Programmes with the East African Community Support to the EAC Integration Process

51 Promotion of Peace and Security Quality Infrastructure for the Pharma Sector National Metrology Institute Germany