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RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHDR #0100/01 0340702
ZNR UUUUU ZZH
R 030702Z FEB 10
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC 9330
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHMS/AMEMBASSY MUSCAT 0204
RUEHJB/AMEMBASSY BUJUMBURA 3137
RUEHKM/AMEMBASSY KAMPALA 0110
RUEHLGB/AMEMBASSY KIGALI 1614
RUEHNR/AMEMBASSY NAIROBI 1582
RUCNDT/USMISSION USUN NEW YORK
RUEHDS/USMISSION USAU ADDIS ABABA
RHMFISS/CDR USAFRICOM STUTTGART GE
RHMFIUU/CJTF HOA//J3
RUEAIIA/CIA WASHINGTON DC
RUEHLMC/MCC WASHINGTON DC
RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 04 DAR ES SALAAM 000100 
 
 
DEPARTMENT FOR AF/E JTREADWELL; AF/C AKEITH AND AF/EPS 
STATE PASS TO USAID/EA 
STATE PASS TO USITC 
TREASURY FOR REBECCA KLEIN 
LABOR FOR INTERNATIONAL LABOR AFFAIRS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR PREL ECON XW ZF TZ
SUBJECT: GUIDE TO THE EAST AFRICAN COMMUNITY 
 
DAR ES SAL 00000100  001.2 OF 004 
 
 
¶1. BACKGROUND AND SUMMARY: The East African Community (EAC) is 
the regional intergovernmental organization of Burundi, Kenya, 
Rwanda, Tanzania and Uganda.  Headquartered in Arusha, 
Tanzania, the EAC's goals, reaffirmed in a November 2009 
Summit, are to realize a common Customs Union (supposedly in 
effect since January 1, 2010), a Common Market (to go into 
affect July 1, 2010) and a Monetary Union(the current work 
plan for which suggests a three-year time frame to implement), 
leading to an eventual Political Federation.  The Common 
Market is meant to provide free movement of goods, people and 
labor in the region but seems to have a long way to go to be 
realized.  There also is a Tripartite Process to harmonize 
the EAC with the Southern Africa Development Community (SADC) 
and Common Market for Eastern and Southern Africa (COMESA). 
President Kikwete (Tanzania) is the current EAC Chairperson, a 
position which rotates annually.  With 48 percent of its 
budget provided by donors, the EAC's paper structures often do 
no match ground realities.  Nonetheless, the EAC is the 
primary regional coordinating mechanism, and its importance 
continues to grow.  END BACKGROUND AND SUMMARY. 
 
¶2. The East African Community (EAC) is the regional 
intergovernmental organization of Kenya, Uganda, Tanzania, 
Rwanda and Burundi.  The EAC was originally founded in 1967, 
but collapsed in 1977.  The East African Community was finally 
revived on 30 November 1999, when the Treaty for its re- 
establishment was signed and entered into force on 7 July 2000 
following ratification by the original three partner states: 
Kenya, Uganda and Tanzania. Rwanda and Burundi acceded to the 
EAC Treaty on 18th June 2007 and became full members of the 
Community July 1, 2007. 
 
The Community 
------------- 
 
¶3. Burundi, Kenya, Rwanda, Tanzania and Uganda have a combined 
population of more than 125 million people, a land area of 
1.82 million sq kilometers and a combined Gross Domestic 
Product of $60 billion (2008). 
 
Current Status of Community Customs and Trade 
--------------------------------------------- 
 
¶4. The first major achievement of the EAC was establishment of 
a Customs Union for East Africa, signed in March 2004 and 
supposedly going into effect on 1 January 2005. Under the 
terms of the treaty, Kenya, the region's largest exporter, was 
supposed to continue to pay duties on its goods entering the 
other four countries, based on a declining scale, until 2010 
(when all tariffs are abolished).  A common system of tariffs 
is theoretically supposed to apply to goods imported from 
third-party countries (but often this is violated in the 
breach). 
 
¶5. Officially under the EAC Customs Union, which became law 
January 1 of this year, goods manufactured in any one of the 
partner states can move anywhere around the EAC without 
suffering any import duties.  However, in the words of an EAC 
Communique' touting the launch of the "full-fledged" Customs 
Union, "this may not be working perfectly right now." 
Meanwhile, for goods imported into the EAC, partners have yet 
to agree on modalities for collection and accounting for 
customs revenue.  In theory, once those goods are taxed upon 
entry into the EAC, they could move freely around the 
Community.  (COMMENT:  According to EAC figures, the total 
volume of intra-EAC trade is merely 13%. This can be compared 
to Europe at 60% and Asia at 40%.  END COMMENT) 
 
¶6. While generally EAC citizens are largely in favor of the 
 
DAR ES SAL 00000100  002.2 OF 004 
 
 
EAC, informal polls indicate that most Tanzanians (up to 80% 
of its population) have an unfavorable view. Tanzania has more 
land than the other EAC nations combined, and some Tanzanians 
fear land-grabs by wealthy residents of the other EAC member 
nations.  Many Tanzanians also are wary of free movement of 
labor, fearing that in many professions more capitalist-savvy 
and better-educated Kenyans will come and snatch the plum 
jobs.  During the November 2009 Summit, President Kagame of 
Rwanda talked about the "need" to mitigate revenue loss 
through "financial compensatory mechanisms,"in order to make 
the union a meaningful success. 
 
¶7. In 2008, the EAC, the Southern Africa Development Community 
(SADC) and the Common Market for Eastern and Southern Africa 
(COMESA) agreed in principle to an expanded free trade area 
among member states of all three.  They established a 
"Tripartite Process" to harmonize the overlapping benefits of 
the EAC with SADC and COMESA, with "coordination units" having 
been set up in all three regional organizations.  Tanzania is 
a full member of SADC. 
 
EAC Agenda for 2010 
------------------- 
 
¶8. For 2010, EAC SYG Mwapachu hopes to increase cooperation in 
defense, which will involve the upgrading of the existing 
memoranda of understanding on defense matters into a legally- 
binding protocol. This is expected to take place at a special 
forum in Kampala in February. (2009 saw joint military 
exercises in different parts of the EAC and a first-ever EAC 
Peace and Security Conference, held in Uganda.) 
 
¶9. Other activities for 2010 include hosting a Conference for 
People With Disabilities (to be held in Kampala); the 3rd East 
African Investment Conference; a high-level Conference on 
Railway Development and a first-ever Summit on Food Security 
and Climate Change.  The EAC also plans to table a bill in the 
regional parliament against counterfeit products and come up 
with a clear roadmap for a Monetary Union (plans drawn up in 
2004 are for the EAC to introduce a common currency, the East 
African shilling, sometime between 2011 and 2015). 
 
¶10. Also this year, the Civil Aviation Safety and Security 
Oversight Agency (CASSOA), an institution of the EAC, will 
move offices from Arusha to Entebbe in 2010.  Meanwhile, 
cooperation with the EAC's co-members in the Tripartite 
Taskforce - COMESA and SADC - is set to intensify as the three 
blocs work towards actualizing a Free Trade Area. The EAC will 
also be seeking to revive the stalled Economic Partnership 
Agreement (EPA) negotiations with the European Union this 
year. 
 
The EAC Common Market Protocol 
------------------------------ 
 
¶11. At a Summit held November 20, 2009 for the 10th 
Anniversary of the EAC, Heads of State signed a Protocol for 
the Establishment of the East African Community Common Market. 
It will to go into effect July 2010, assuming all EAC member 
states ratify the protocol.  However, none have done so yet. 
 
¶12. The EAC Common Market Protocol provides for the following, 
to be progressively implemented: 
 
(i) free movement of goods; 
(ii) free movement of persons; 
(iii) free movement of workers; 
(iv) the right of establishment; 
(v) the right of residence; 
 
DAR ES SAL 00000100  003.2 OF 004 
 
 
(vi) free movement of services; and 
(vii) free movement of capital 
 
¶13. Talks are also underway for a common visitor's visa for 
the region.  In addition, the Protocol provides for 
cooperation in the following areas: 
 
(i) protection of cross border investments 
(ii) economic and financial sector policy coordination 
(iii) competition and consumer welfare 
(iv) commercial policy 
(v) coordination of transport policies 
(vi) harmonization of social policies 
(vii) environmental management 
(viii) statistics 
(ix) research and technological development 
(x) intellectual property rights 
(xi) industrial development; and 
(xii) agriculture and food security 
 
ORGANS OF THE EAC 
----------------- 
 
¶14. The EAC is made up of the following elements: 
 
-- THE SUMMIT comprises the heads of government of partner 
states and gives general direction on goals and objectives of 
the Community. There is a yearly rotating Presidency, 
currently held by Kikwete, who took the mantle from Rwanda 
President Kagame during the EAC Arusha Summit last November. 
At the last Summit, Zanzibari President Karume sat on the dais 
for all "Head of State" events, but he had no speaking role 
and did not sign any documents.  The official languages of the 
Community are English and Swahili (not/not French), and during 
the November Summit addresses, all leaders spoke in Kiswahili. 
 
-- THE COUNCIL OF MINISTERS is the main decision-making 
institution. It is made up of ministers from the partner 
states responsible for regional co-operation.  For Tanzania, 
that person is Deputy Minister for East Africa Cooperation 
Mohamed Aboud. 
 
-- THE COORDINATING COMMITTEE consists of permanent 
secretaries and reports to the Council of Ministers. It is 
responsible for regional cooperation and coordinates the 
activities of the Sectoral Committees. 
 
-- SECTORAL COMMITTEES conceptualize programs and monitor 
their implementation. The Council of Ministers establishes the 
committees on recommendation of the Legislative Assembly.  The 
EAC has established a Sectoral Committee on Co-operation in 
Defense, as well as an Inter-State Security Committee 
 
-- THE SECRETARIAT is the full-time executive organ of the 
Community. As the guardian of the Treaty, it ensures that 
regulations and directives adopted by the Council are properly 
implemented.  The Secretary General is Ambassador Juma V. 
Mwapachu from Tanzania. 
 
-- EAST AFRICAN COURT OF JUSTICE is the judicial arm of the 
Community. It has a watchdog function and also plays a part in 
the legislative process.  The court has jurisdiction over the 
interpretation and application of the 1999 Treaty that re- 
established the EAC and in the future may have other original, 
appellate, human rights or other jurisdiction upon conclusion 
of a protocol to realize such extended jurisdiction. It is 
temporarily based in Arusha, Tanzania. 
 
-- EAST AFRICAN LEGISLATIVE ASSEMBLY (EALA)(septel) is the 
 
DAR ES SAL 00000100  004.2 OF 004 
 
 
legislative arm of the Community. The EALA has oversight 
functions on all matters that fall within the Community's work 
and its functions include debating and approving the budget of 
the Community, making recommendations to the Council, and 
liaising with National Assemblies on matters pertaining to the 
Community. Since being inaugurated in 2001, the EALA has had 
several sittings as a plenum in all member states' capitals. 
 
-- AUTONOMOUS INSTITUTIONS OF THE COMMUNITY are the East 
African Development Bank, Lake Victoria Fisheries Organization 
and the Inter-University Council for East Africa. 
 
DONOR CRITICISMS 
---------------- 
 
¶15. Donors provide 48 percent of the EAC's General Budget. 
The figure may be significantly higher if one counts the 
various specific EAC projects and conferences funded by others 
as well(for example, the USG, through USAID's Competitiveness 
and Trade Expansion Program (COMPETE) will provide up to $84 
million over four years to "increase trade and investment 
between the U.S. and Eastern and Central Africa (ECA);" much 
of that money goes to EAC-related activities).  Moreover, much 
of the contribution of member states themselves comes from 
donor support.  Some donors have complained that the EAC can 
be profligate in its conferences and travel and not always 
transparent in its funding. 
 
¶16. British Aid Agency DFID, in a report to be released 
February 2 to Budget Support Partners offers the following 
criticism (and recommendations): "The combined absence of the 
staff (in some cases up to 80% of their time is spent away 
from the office), in addition to overlapping periods of 
absence within the SYG's office, creates performance 
challenges across the organization in terms of its ability to 
share information, make timely decisions to address daily 
routine matters.  The existing Executive Team does not meet 
regularly to discuss policy and opera|MmOai$3/QqgQOCtQK0jQBl travel 
policies and diary management and provide guidelines as to who 
should attend meetings. In addition, the EAC has yet to adopt 
modern video conferencing facilities to enable regular 
regional meetings and avoid unnecessary travel for established 
projects." 
 
COMMENT 
------- 
 
¶17. Whereas the EAC's paper structures often do no match 
ground realities, the EAC is nonetheless the primary regional 
coordinating mechanism, and its importance continues to grow. 
For decades during the colonial era and a few years beyond, 
the region had a common currency.  Infrastructure issues 
crosscut the borders throughout the region, as do security and 
economic issues.  The partners share a common language, 
Kiswahili (spoken to varying degrees among all five), the use 
of which continues to expand (along with English, increasingly 
spoken in Rwanda, being revived in Tanzania but little used in 
Burundi). The bureaucracies of the EAC and its members may 
still be shaky, but the motivation is real and the imperatives 
more so. 
 
LENHARDT