PRESENTATION AT LEARNING EVENT ON TRADE AND REGULATIONSIN SERVICES IN AFRICATHE EXPERIENCE OF EAC ON ACCOUNTANTS MRA AND ITSIMPLEMENTATIONSHERATON ADDIS ABABA, ETHIOPIAFREDRICK RIAGAICPAKPRESENTATION AT LEARNING EVENT ON TRADE AND REGULATIONSIN SERVICES IN AFRICATHE EXPERIENCE OF EAC ON ACCOUNTANTS MRA AND ITSIMPLEMENTATIONSHERATON ADDIS ABABA, ETHIOPIAFREDRICK RIAGAICPAKCredibility . Professionalism . AccountAbility
Presentation Outline• Background in the Context of the EAC integration• The Impetus and Key Success Factors• Challenges to Implementation• The Missed Steps - Lessons• ConclusionCredibility . Professionalism . AccountAbility
Background – Context of EACThe EAC comprise Kenya, Tanzania,Uganda Rwanda and BurundiTotal Area : 1.8 million sq. km.Population: 135.4 millionGDP per Capita: US$ 732Credibility . Professionalism . AccountAbilityPopulation of Reg. AccountantsKenya : 10,900Tanzania:4,500Uganda: 1600Rwanda: 200Burundi: 100Per capita numbers?
EAC Integration ProcessCredibility . Professionalism . AccountAbility• Are we moving too fast… what critical lessons from the EU?CUSTOMSUNIONCOMMONMARKETMONETARYUNIONPOLITICALFEDERATION2005 – June 2010; July 2010 – 2012; 2012 – onwards; Ultimate
the Impetus and Key Success FactorsCredibility . Professionalism . AccountAbility• CMP took effect in July 2010• Initial Mutual Recognition Agreement (MRA) signed in May 2009 betweenKenya, Tanzania and Rwanda; was it EAC driven?• East Africa Community Institutes of Accountants (EACIA) MRA signedSeptember 2011:• creates East Africa Institutes of Accountants - ICPAK, NBAA, ICPAR,ICPAU and OPC ;• formally registered with the EAC Secretariat and at advanced stage ofadoption under the EAC structures;
The ImpetusCredibility . Professionalism . AccountAbilityWhy the EACIA MRA?• Remaining true to the CM Protocol – Art 11 of the CMP• offer business support to cross-border trade in the EAC through aregional pool of professional business advisors and accountingprofessionals;• develop the accountancy profession in the EAC region in accordancewith IFAC SMOs;
Key Success Factors•The desire to collaborate – at least prior to signing of the MRA;•Engage on the basis of negotiations, the initial MRA between Kenya,Tanzania and Rwanda;•Openness for additional members – Uganda and Burundi coming throughthe revision of the MRA in September 2011;
Key Success Factors – cont’d•Critiques from stakeholders such as the World Bank and the EAC Secretariatserved to improve on the final MRA;• Acceptance that PAOs not at the same level of development and henceoperationalize an all-inclusive structure;•Adoption of informal twinning arrangements to foster the development ofthe emerging PAOs – Rwanda and Burundi.
Challenges to Effective Implementation• Existence of explicit trade barriers:• Slow pace of harmonization of labour and immigration lawsresulting in explicit trade barriers – work permits requirements;• Nationality requirements – Burundi Mode 3 unbound unless 1/3 ofcapital owned by locals… referrals by locals in the case ofTanzania.• Incomplete commitments – Kenya and Tanzania have not committed toopening up taxation facet of accountancy.•Varied timelines for liberalization•General apathy on the side of accountants… is it the fear of theunknown?
Missed Steps• Failure to undertake situation analyses and gap analysis prior toengaging;• Non-involvement of EAC Secretariat – slowed the process adoption ofthe MRA document as a community legal binding doc;• Linking access to market under Mode 4 to Schedule of FreeMovement of Workers.
Lessons from the EACIA Experience• Appreciate the different levels of development of the individualmembers and turn that into a unifying factor;• Prioritize review of the various legal frameworks – the greatestenabler;• Embrace partnership between govern and private sector;• Awareness creation among the critical stakeholders:• among the professional accountants• Government agencies playing the regulatory roles of some sort.
“A society grows great when old men plant trees whose shade they know theyshall never sit in” – a Greek ProverbThank You!!“A society grows great when old men plant trees whose shade they know theyshall never sit in” – a Greek ProverbThank You!!Credibility . Professionalism . AccountAbility
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