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EAC Accountants MRA and Implementation Experience
1. PRESENTATION AT LEARNING EVENT ON TRADE AND REGULATIONS
IN SERVICES IN AFRICA
THE EXPERIENCE OF EAC ON ACCOUNTANTS MRA AND ITSIMPLEMENTATION
SHERATON ADDIS ABABA, ETHIOPIA
FREDRICK RIAGA
ICPAK
PRESENTATION AT LEARNING EVENT ON TRADE AND REGULATIONS
IN SERVICES IN AFRICA
THE EXPERIENCE OF EAC ON ACCOUNTANTS MRA AND ITSIMPLEMENTATION
SHERATON ADDIS ABABA, ETHIOPIA
FREDRICK RIAGA
ICPAK
Credibility . Professionalism . AccountAbility
2. Presentation Outline
• Background in the Context of the EAC integration
• The Impetus and Key Success Factors
• Challenges to Implementation
• The Missed Steps - Lessons
• Conclusion
Credibility . Professionalism . AccountAbility
3. Background – Context of EAC
The EAC comprise Kenya, Tanzania,
Uganda Rwanda and Burundi
Total Area : 1.8 million sq. km.
Population: 135.4 million
GDP per Capita: US$ 732
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Population of Reg. Accountants
Kenya : 10,900
Tanzania:4,500
Uganda: 1600
Rwanda: 200
Burundi: 100
Per capita numbers?
4. EAC Integration Process
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• Are we moving too fast… what critical lessons from the EU?
CUSTOMS
UNION
COMMON
MARKET
MONETARY
UNION
POLITICAL
FEDERATION
2005 – June 2010; July 2010 – 2012; 2012 – onwards; Ultimate
5. the Impetus and Key Success Factors
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• CMP took effect in July 2010
• Initial Mutual Recognition Agreement (MRA) signed in May 2009 between
Kenya, Tanzania and Rwanda; was it EAC driven?
• East Africa Community Institutes of Accountants (EACIA) MRA signed
September 2011:
• creates East Africa Institutes of Accountants - ICPAK, NBAA, ICPAR,
ICPAU and OPC ;
• formally registered with the EAC Secretariat and at advanced stage of
adoption under the EAC structures;
6. The Impetus
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Why 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 a
regional pool of professional business advisors and accounting
professionals;
• develop the accountancy profession in the EAC region in accordance
with IFAC SMOs;
7. 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 through
the revision of the MRA in September 2011;
8. Key Success Factors – cont’d
•Critiques from stakeholders such as the World Bank and the EAC Secretariat
served to improve on the final MRA;
• Acceptance that PAOs not at the same level of development and hence
operationalize an all-inclusive structure;
•Adoption of informal twinning arrangements to foster the development of
the emerging PAOs – Rwanda and Burundi.
9. Challenges to Effective Implementation
• Existence of explicit trade barriers:
• Slow pace of harmonization of labour and immigration laws
resulting in explicit trade barriers – work permits requirements;
• Nationality requirements – Burundi Mode 3 unbound unless 1/3 of
capital owned by locals… referrals by locals in the case of
Tanzania.
• Incomplete commitments – Kenya and Tanzania have not committed to
opening up taxation facet of accountancy.
•Varied timelines for liberalization
•General apathy on the side of accountants… is it the fear of the
unknown?
10. Missed Steps
• Failure to undertake situation analyses and gap analysis prior to
engaging;
• Non-involvement of EAC Secretariat – slowed the process adoption of
the MRA document as a community legal binding doc;
• Linking access to market under Mode 4 to Schedule of Free
Movement of Workers.
11. Lessons from the EACIA Experience
• Appreciate the different levels of development of the individual
members and turn that into a unifying factor;
• Prioritize review of the various legal frameworks – the greatest
enabler;
• 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.
12. “A society grows great when old men plant trees whose shade they know they
shall never sit in” – a Greek Proverb
Thank You!!
“A society grows great when old men plant trees whose shade they know they
shall never sit in” – a Greek Proverb
Thank You!!
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