This document discusses barriers to the free movement of goods, capital, services, and people within the East African Community (EAC) common market. It identifies specific restrictions in the laws and regulations of EAC member states that inhibit the free flow of these factors of production between countries. Over 50 non-tariff barriers to trade in goods and at least 63 measures inconsistent with the free movement of services were identified. Restrictions on capital flows are also common, affecting the majority of capital operations that should be liberalized under the common market protocol. While economic integration has increased intra-regional trade volumes, full implementation of the common market remains incomplete due to the various legal and regulatory restrictions maintained by EAC member states.

1. Macro-fiscal Policy, Advocacy and Tax Expert [URT]
Ministry of Energy and Minerals [TMAA]
EAC Regional Analytical
Comparison of Fiscal and
Macro-economic Trends

2. Customs
Union
Common
Market
Monetary
Union
Political
Federation
Mutual Trust Political Will Sovereign Equality Peaceful Co-existence
Good Neighbourliness Peaceful Settlement of Disputes
Good Governance Equitable Distribution of Benefits
Mutual Benefit
People-Centred Creation of Enabling Environment
Rule of Law
Market-Driven

3. Customs
Union
Free movement of goods
Common External Tariff
Removal of NTBs
Trade Facilitation
Institutional Framework
for Customs Management
Figure 2: PILLAR 1

4. Common
Market
Free movement of Capital
Right of Establishment
and Residence
Figure 3: PILLAR 2

5. Common
Market
Free movement of
Services
Free movement of
Persons and Labour
Figure 3 Cont..: PILLAR 2

6. Common
Market
Free movement of Capital
Right of Establishment
and Residence
Figure 3 Cont.: PILLAR 2

7. COMMON MARKET
The rationale:
it has the potential to build economies of scale, accelerate
competitiveness, and bring the region into a single investment
destination and expands opportunities for the private sector and uplift
the living standards of EAC citizens in a way that no Partner State can do
on its own.
It calls for strong implementation by all the Partner States, so as to
deliver the rights and freedoms enshrined in the EAC Common Market
Protocol in line with the robust implementation cycle: including planning,
implementation and monitoring of progress.
it combines the region’s economies, create new opportunities for the
private sector and increase competitiveness. However, a common market
requires that people, goods, services and capital move freely.

8. COMMON MARKET
Since the Protocol came into force in 2010, Rwanda, Tanzania, and Uganda
have introduced at least 10 restrictions on the movement of capital. In services,
several new restrictions have been introduced or carried over from older laws
since the Protocol was signed. And in goods, where obligations started earlier at
the enactment of the Customs Union Protocol, 51 non-tariff barriers (NTBs)
arising from regulatory measures by governments were identified between 2008
and June 2013.
Many of the restrictions on the free movement of capital, services, and goods
inhibit or make entry into the market unduly expensive. But several forms of
discrimination persist even after entering the market—such as different fees for
transactions and government services, ceilings on the value of transactions,
limits on the type and length of projects for service providers, and higher taxes
for foreign firms. Some barriers, such as restrictions on personal capital
transactions and on the transfer of shares in firms, affect even firms seeking to
exit a particular economy.

9. COMMON MARKET
A lenient attitude toward exemptions is slowing the development of the common
market. Exemptions are legal mechanisms among Partner States to exclude
individual Partner States from specific obligations to the common market. But
when not closely regulated, exemptions can undermine the achievement of a
common market. For example:
1.Apart from their membership in the EAC, all Partner States are also
members of other regional integration schemes, making it very difficult to
construct a common market enabling a free circulation of goods within
the region.
2.All Partner States except Burundi restrict the free movement of capital
for prudential reasons without notification.
3.Some Partner States have not committed to fully liberalize their services
trade.

10. FREEDOM OF MOVEMENT OF CAPITAL ARTICLE 24
Article 24 of the EAC Common Market Protocol requires the Partner States to eliminate
restrictions on the free movement of capital. That includes restrictions based on nationality,
place of residence, current payments, and where capital is invested. Annex VI of the protocol
identifies 20 operations that should be free from legal and regulatory encumbrances. These
operations cover securities, credit, direct investment and personal capital transactions. The
review of laws and regulations concerning movement of capital in the five EAC Partner States
determined how they complied with these key obligations.
All EAC Partner States have restrictions that affect inward investment from other EAC economies.
Only 2 out of the 20 capital operations are free of restrictions in all Partner States. These are
external borrowing by residents and repatriation of proceeds from sale of assets. All other 18
operations have at least 1 Partner State restricting the operation.
Kenya’s laws and regulations make it easiest to move capital across the EAC. Tanzania and
Burundi make it hardest.
Capital controls are the most severe restriction on the movement of capital across the EAC,
affecting the majority of transactions covered under the protocol. Burundi’s controls restrict 7
operations and Tanzania’s restrict 12.

11. COMMON MARKET
No EAC state has developed regulation for derivatives.
4 EAC Partner States—Burundi being the only exception—have introduced
exemptions to the protocol without following the requirements for notification
of the other Partner States or the EAC Secretariat. At least 9 such exemptions
are in place, guided by concerns about prudential supervision, public policy,
money laundering, financial sanctions agreed to by the Partner States, and
financial disturbances.
Despite the protocol coming into force in 2010, and contrary to the
requirements of Article 24, new restrictions on the movement of capital have
been introduced in some Partner States’ laws.

12. FREEDOM OF MOVEMENT OF SERVICES [ARTICLE 16]
Article 16 of the protocol guarantees the free movement of services supplied by nationals of EAC
Partner States within the community. That includes supply of services from the territory of a Partner
State to consumers in another Partner State, supply of services to consumers who have travelled
abroad, foreign direct investment from one Partner State into another one, and temporary movement
of professionals to supply services in another Partner State.
A review of more than 500 key sectoral laws and regulations of the EAC Partner States identified at
least 63 measures inconsistent to commitments to liberalize services trade within the EAC. The
review focused on professional services (legal, accounting, architectural, and engineering), road
transport, distribution (retail and wholesale), and telecommunications legislation.
Professional services account for nearly three-fourths (73%) of the 63 identified measures, led by
engineering (16), accounting (14), and legal services (10). The other measures involve road
transport (15) and wholesale distribution (2).
Telecommunications and retail were the only studied sectors with no identified measures
inconsistent to the protocol. However, restrictions on services trade within the EAC still exist in these
sectors, and they are scheduled for elimination before 2015.

13. Scope of East African Common Market (2014)
Tanzania Regulations 2, 3 and 7 of the Capital Markets and Securities
(Foreign Investors) Regulations 2003
These regulations define foreign investors to
include those from EAC Partner States, and in
subsequent clauses impose limits based on this
definition. These limits include a purchase ceiling
of 60% of issued securities for foreign investors, a
purchase ceiling of 1% of issued securities for a
single foreign investor or by two or more foreign
investors jointly, a purchase ceiling of 5% of
issued securities for institutional foreign investors.
These regulations also require that a foreign
investor shall, prior to any sale of its shareholding
intimate its intention to sell to the Authority and the
authority shall consider and direct the sale to
proceed or otherwise impose conditions on the
sale as the Authority considers necessary for
investor protection.
Noncitizens, except financial institutions, are also
prohibited from participating in the purchase or
sale of government securities under regulation 3
(2).
Burundi Article 16 (2) of the Law 1/01 of 9/02/2012 amending law N0
4/03 of 19/02/2009 on the organization of the privatization of
companies with public participation, services, or works
Article 16 authorizes the Inter-ministerial Privatization
Committee to establish contracts with domestic or foreign
individual and entities. Then, based on the views of the Service
in Charge of State Enterprises, the committee can decide
whether some or all securities should be sold only to Burundian
citizens or companies. It also establishes rules and procedures
for subsequent transfer of these securities to foreign investors.
Uganda Income Tax (Amendment) Act 2006 Part V Schedule 3
Sections 117 and 118,
The Income Tax (Amendment) Act 2012, Part V
Schedule 3 Sections 117 and 118 (3)
Residents receive a potentially lower withholding tax rate than
do non-residents for dividend payments on listed securities.
The withholding tax rate applicable for interest payments on
government securities to a resident person is specified, but not
that for non-residents, thus generating uncertainty.
Rwanda Law N0. 55/2007 of 30/11/2007 Governing the Central Bank of
Rwanda, Article 55
The law potentially allows the Central Bank to intervene in
money markets, especially for lending, borrowing, selling, or
buying liquid assets, as well as pensions and all other
negotiable instruments.
Kenya No restrictions No restrictions

14. COMMON MARKET
Inconsistent measures were found not only in sectoral legislation, but also in
laws that cut across all sectors. A partial, complementary review of the
Partner States’ principal investment and company laws identified 11
additional measures in the EAC region.
None of the Partner States have been complying with their obligation to
regularly inform the EAC Council of any new laws and administrative
guidelines that affect trade in services.
However, the integration boosted the volume of intra trade among member
countries. Kenya remains the main source of imports for all other countries
in the block although its self receives a small amount of imports from them.
But like all other countries it’s overall trade position remains weak with a
widening trade balance reflecting that imports continue to surpass exports.

15. FREEDOM OF MOVEMENT OF GOODS ARTICLE 5(2)(a)
Partner States committed to eliminating tariff and non-tariff barriers to trade, establishing a
common external tariff, and harmonizing and mutually recognizing certain trade standards. The
Partner States are required to take all steps to achieve these obligations through national and
regional laws and regulations. In addition, EAC customs laws bar Partner States from introducing
measures inconsistent with these obligations. The review examined legal obligations arising from
the four commitments above, and entailed a review of laws, regulations, legal notices and trade
statistics relevant to the movement of goods in the EAC.
All Partner States still apply non-tariff barriers (NTBs), with most related to sanitary and
phytosanitary measures, rules of origin, additional taxes and charges, and technical barriers to
trade. The fact that an important number of NTBs relate to standards and phytosanitary standards
shows that effective implementation in this area remains a problem.
Though most Partner States are in formal legal compliance with the obligation to introduce a
common external tariff, they are all members of multiple free trade areas. This means that the
Partner States apply different tariffs to extra-regional trade partners. These and other exceptions
impede the effective free circulation of goods within the EAC.

16. MONETARY UNION
Tanzania Becomes First Partner State to Ratify EAC Monetary Union Protocol
Though some Members of the Tanzania National Parliament had reservations on the
ratification of the Protocol especially due to geo-politics dynamism and creation of the so
called Coalition of the Willing (CoW), but economic indicators support the move in order to put
our country to be in the right track to economic supremacy.
Under the Protocol, the EAC partner States are expected to surrender monetary and exchange
rates policies to the East African Central Bank leading to a single currency regime within the
region, whereas National Central Banks will remain with the mandate of managing Fiscal
policy, Fiscal discipline and harmonize them with the other Partner States' National Central
Banks.
The Protocol will be implemented over a ten year period, subsequently leading to creation of
regional financial institutions whose mandate will be to stabilize financial prices as well as
monitoring, surveillance, statistics and enforcing compliance of all other macro finance
matters, including buffering of any emerging economic shocks.
Union will eliminate the costs attendant to juggling different currencies thereby reducing
transaction costs and minimizing inflation in the region, thus creating an economically
stabilized region with a conducive environment for Direct Foreign Investment and therefore
uplifting the economic standard of its people.

17. MACRO ECONOMIC INDICATORS
7.2
6.1
6.4
7.4
4.6
6.8
5.7 5.6
7.5
4.5
6.5
4.2
4.5
7.7
4.2
0
1
2
3
4
5
6
7
8
9
Tanzania Uganda Kenya Rwanda Burundi
P
E
R
C
E
N
T
A
G
E
G
R
O
W
T
H
EAC MEMBER STATES
FIGURE 4: TREND ANALYSIS OF REAL GDP GROWTH
(2012-2014)
Real GDP Growth
(2014)
Real GDP Growth
(2013)
Real GDP Growth
(2012)

18. REAL GDP GROWTH
FOR TANZANIA
Tanzania has experience a 3% decline in international trade. The Decline in
export has affected all sectors of the economy with the exception of the
transportation and travel services sector which posted an impressive 15%
growth. The decline was largely driven by decrease in the value of capital goods
especially of machinery. By contrast, the total value of intermediary imports
increased by more than 17% largely driven by increases in the value of imports
of oil and fertilizers
The main drivers of growth are telecommunications, transport and financial
intermediation, manufacturing and construction, and trade
Attributable to implementation of a prudent Monetary Policy resulting in
growth in Money supply coupled with improved food supply
Ongoing investments in infrastructure
The discovery of large Gas reserves
Increase in FDIs associated with Oil and Gas Exploration

19. REAL GDP GROWTH
FOR KENYA
Higher level of investment both foreign and local as well as strong growth in the agricultural sector
over the longer term;
The development of Kenya's oil sector contributes significantly to GDP expansion while
infrastructure and improved agriculture to over 25% to total GDP boosts efficiency level.
FOR RWANDA
GDP increased due to tight monetary policy and decrease in political risks
FOR BURUNDI
GDP increased due to tight monetary policy and decrease in political risks
FOR UGANDA
Drought, weaker demand of exports, high international fuel prices and imported inflation coupled
with the weak Ushs due to strong dollar globally decelerated the growth as anticipated
However, Government made significant progress in the Oil, Gas and Petroleum development. The
Oil refinery will be developed as a PPP with selected lead sector holding 60% shareholding and
the Government and participating EAC community Partner sates holding up to 40% of the Oil
refinery equity

20. MACRO ECONOMIC INDICATORS
6.5
5.4
6.7 6.8
3.4
8.8
7
4.9
2.98
8.2
7.7
16
7.74
4.7
11.8
0
2
4
6
8
10
12
14
16
18
Tanzania Uganda Kenya Rwanda Burundi
PERCENTAGETRENDS
EAC MEMBER STATES
FIGURE 5: REAL INFLATIONARY TRENDS (2012-2013)
Inflation (2014)
Inflation (2013)
Inflation (2012

21. REAL INFLATIONARY TRENDS
FOR TANZANIA
Tight Fiscal and Monetary Policy brought down the price level and restored
macroeconomic stability; though still high electricity tariff, high prices of oil
and food especially rice and sugar prices are factors for inflationary trends.
FOR UGANDA
Improvement of current account balance and a mildly expansionary fiscal
policy
Tight monetary policy; government expenditure with low inflation easing
international commodity prices and stable exchange rate
FOR RWANDA
Tight monetary policy; government expenditure; stable exchange rate and drop
in food and fuel prices
FOR BURUNDI
Tight monetary policy; government expenditure; stable exchange rate and drop
in food and fuel prices

22. TREND OF INTEREST RATES
13
11.5
9.5
6
12.5
12
11
8.9
7.5
8.48
12.7
16.2
11
8
11.2
0
2
4
6
8
10
12
14
16
18
Tanzania Uganda Kenya Rwanda Burundi
P
E
R
C
E
N
T
A
G
E
T
R
E
N
D
S
EAC MEMBER STATES
Figure 6: TREND OF INTEREST RATES (TB)
Interest Rate (2014)
Interest Rate (2013)
Interest rate (2012)

23. TREND OF INTEREST RATES
FOR TANZANIA
slow implementation of credit reference data bank; Credit Reference Bureau
in the country; the premature stage of NIDA and high costs in doing business
due to poor infrastructures impacted on high interest lending rates
FOR UGANDA
Tight monetary policy; government expenditure with low inflation easing
international commodity prices and stable exchange rate
FOR RWANDA
Tight monetary policy; government expenditure; stable exchange rate and
drop in food and fuel prices

24. TREND OF GDP IN CURRENT PRICES AND PER CAPITA IN USD]
- 5,000.00 10,000.0015,000.0020,000.0025,000.0030,000.0035,000.0040,000.0045,000.0050,000.00
Tanzania
Uganda
Kenya
Rwanda
Burundi
GDP FIGURES IN USD
EACMEMBERSTATES
Tanzania Uganda Kenya Rwanda Burundi
GDP Per Capita Current Prices (USD)
2012
599.19 392.71 992.95 1,341.00 556
GDP Per Capita Current Prices (USD)
2013
663 602.72 1072.85 1,591.71 625
GDP Per Capita Current Prices (USD)
2014
619 642 902 686 155.06
GDP (Current Prices in USD 2013 28,539.90 21,312.20 40,413.18 7,223.00 1,568.00
GDP (Current Prices in USD 2014 30,566.00 23,631.00 43,308.00 8,467.00 1,560.00
Figure 7: GDP (Current Prices and Per Capital in USD)

25. TREND OF GDP IN CURRENT PRICES AND PER CAPITA IN
USD]
Tanzania Ranks Tanzania No. 168 in world rankings according to GDP Per Capita
(Current Prices, US Dollars) in year 2013. The world's average GDP Per Capita
(Current Prices, US Dollars) value is US$ 13531.15; Tanzania is US$ 12,868.04 less
than the average
Uganda Makes Uganda No. 164 in world rankings according to GDP Per Capita
(PPP), US Dollars in year 2013. The world's average GDP Per Capita (PPP), US
Dollars value is US$ 15173.51; Uganda is US$ 13,713.89 less than the average.
Kenya Ranks Kenya No. 153 in world rankings according to GDP Per Capita
(Current Prices, US Dollars) in year 2013. The world's average GDP Per Capita
(Current Prices, US Dollars) value is US$ 13531.15; Kenya is US$ 12,458.30 less
than the average.
Rwanda Ranks Rwanda No. 160 in world rankings according to GDP Per Capita
(PPP), US Dollars in year 2013. The world's average GDP Per Capita (PPP), US
Dollars value is US$ 15,173.51; Rwanda is US$ 13,581.80 less than the average.
Ranks No. 182 in world rankings according to GDP Per Capita (Current Prices, US
Dollars) in year 2013. The world's average GDP Per Capita (Current Prices, US
Dollars) value is US$ 13,531.15; Burundi is US$ 13,242.70 less than the average.

26. EXCHANGE RATES
Tanzania Uganda Kenya Rwanda Burundi
Exchange rate (2014) 1,665.70 2,674.35 87.78 689.92 1,542.40
Exchange rate (2013) 1,632.58 2,574.12 86.2 649.912 1,539.60
Exchange Rate (2012) 1,533.20 2,388.00 87.7 600 1,439.50
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
PERCENTAGETRENDS
Figure8: Comparison of Exchange Rates

27. TRENDS OF THE EXCHANGE RATES
FOR TANZANIA , UGANDA , RWANDA AND BURUNDI
confidence in the foreign exchange market coupled with build-up of
foreign exchange reserves
FOR KENYA
Remained stable marginally in April 2013. due to confidence in the
foreign exchange market following the elections in March 2013 and
coupled with build-up of foreign exchange reserves.

28. OTHER ECONOMIC CONSIDERATIONS

29. EAC Regional Comparative Analysis of FDI Flows and Value
of Greenfield FDI Projects

30. FISCAL COMPARATIVE ANALYSIS
Size of the Budget(USD
Billion)
Population(Million)
Tanzania 18.6 42.8
Uganda 11.1 44.9
Kenya 4.6 34.5
Rwanda 2.5 11.6
Burundi 2.4 9.8

31. FISCAL COMPARATIVE ANALYSIS

32. Interest
rate
The general rate on
interest paid to residents
and non-residents is 15%
Non-resident is subject
to a 15% withholding
tax unless the rate is
reduced under a tax
treaty.
Allowable in full except where a
foreign-controlled resident company
which is not a financial institution
has a foreign debt-to-equity ratio in
excess of 2:1 at any time during a
year of income. A deduction is
disallowed for the interest paid by
the company during the year on that
part of the debt which exceeds the
2:1 ratio.
The general rate on interest paid to residents
and nonresidents is 10%; exemptions are
available for interest earned by nonresidents on
deposits in banks registered by the Bank of
Tanzania and on interest paid to resident
financial institutions.
Royalties residents are subject to
5% withholding tax; the
rate is 20% for royalties
paid to nonresidents
Non-resident are
subject to a 15%
withholding tax unless
the rate is reduced
under a tax treaty.
The withholding tax on royalties paid to
residents and nonresidents is 15%
Capital
Gains Tax
20% Suspended in 1985 Taxable as ordinary
income at the standard
rate of corporation tax
of 30%
Capital gains are added to the
income from all other sources and
taxed at the rate applicable to that
person
Gain or loss is included in business or
investment income and taxed at 30%. For land
and buildings, a single installment is payable at
10% for residents and 20% for non-residents at
the time of transfer, which is creditable against
the final tax liability.

33. Thin
Capitaliza
tion Rule
No specific
regulation
regarding transfer
pricing, although
there are some
inspections made
in the context of the
value of imported
goods. No specific
regulation on thin
capitalization.
Interest expenses are proportionately
restricted for foreign controlled
companies (other than licensed financial
institutions) when the ratio of all
interest-bearing liabilities exceeds 3
times the payer's issued and paid up
capital and revenue
reserves/accumulated losses. Control,
for CFC purposes, includes
participations of at least 25%.
Interest on a loan between
related parties that exceeds 4
times the amount of equity
may not be deducted from
taxable income unless the
taxpayer is an individual. This
rule does not apply to
commercial banks and
insurance companies.
Allowable in full except where a
foreign-controlled resident
company which is not a financial
institution has a foreign debt-to-
equity ratio in excess of 2:1 at
any time during a year of
income. A deduction is
disallowed for the interest paid
by the company during the year
on that part of the debt which
exceeds the 2:1 ratio.
An interest deduction for payments
made by an exempt controlled
resident entity (as defined) is
limited to the sum of interest
income plus 70% of total income,
excluding interest income and
interest expenses. Non-deductible
amounts may be carried forward.
Safe Harbour Limit applicable to
Mining companies is 7:3
Loss
Carry-
Forwards
Business, investment income (other
than for financial institutions, for which
investment income is considered
business income), rental and income
from agriculture are assessed
separately and losses only may be
utilized against taxable income from the
same source. As from 12 June 2009,
tax losses may be deducted in the year
in which they arise and the 4 following
years of income (previously, an
indefinite carry forward was allowed).
Losses may not be carried back and
capital losses are not deductible.
Losses may be carried
forward for 5 tax periods. The
carryback of losses is not
permitted. Earlier losses
being deducted before later
losses.
Carried forward indefinitely. The
carryback of losses is not
permitted.
Subject to continuity-of-ownership
and same business tests, losses
may be carried forward indefinitely.
The carryback of losses is not
permitted.
Alternativ
e
Minimum
Tax
Not Applicable Not Applicable Not Applicable Not Applicable A company making tax losses for 3
consecutive years becomes liable
to a minimum tax at 0.3% on
turnover

34. Anti-Avoidance
Rule (Transfer
Pricing)
Kenyan law requires arm's
length pricing between related
enterprises in line with the
OECD guidelines. New
definition that targets taxation of
income from
natural resources to include
consideration paid to take
minerals and living or non-living
resources from the land or sea.
When independent
parties deal with one
another, the terms of
trade are determined by
market forces and may
be presumed to be at
arm's length.
Uganda law requires arm's length
pricing between related enterprises.
Compliance with the OECD
guidelines generally ensures
compliance.
Taxpayers are required to apply the arm's
length principle to transactions between
associates, both resident and nonresident.
Transfer pricing guidelines are being drafted.
Capital Allowance The wear and tear allowances
are charged on capital
expenditure on machinery and
equipment annually Class 1;
37.5% Class2; 30%
Class3;25%.Class4;12.5%;
Investment deduction is 100%
capital allowance. For capital
expenditures intended for
manufacturing purposes
exceeding sh.200 million set up
outside Nairobi, Kisumu or
Mombasa, the investor can
claim 150% allowance.
An investment allowance
of forty percent (40%) in
new or used assets may
be depreciated excluding
motor vehicles that carry
less than eight (8)
persons, except those
exclusively used in a
tourist
IBD 20% initial+5 annual WDV; Plant
and Machinery 50% to 75% initial
+annually on reducing
balance20%:30%:35%:40%;
Commercial Building Straight Line
5%; 100% Mineral exploration
expenditures and Depreciation
allowance for all depreciable mining
assets is 30%; Scientific Research
Expenditure 100%; W&T ranges
from 20% to 40%
Capital Deductions Buildings Straight Line
Agriculture/Livestock/Fisheries 20%; other
5%; Plant and Machinery Initial allowance
Agriculture 100%; Manufacturing initial
allowance 50%; Plant and Machinery
annually on reducing balance Class 1
37.5%; Class 2 25%; Class 3 12.5%; Mining
Development 100%; Agricultural
improvement 100%; Research and
Development 100%

35. ACHIEVEMENTS OF THE EAC
Increased intra-EAC Trade:
Intra-EAC trade has grown by over 50% as a result of the Customs Union
since its launch.
URT and other States registered a surplus budget in its intra-EAC trade
from 2010. This trend is principally due to coherent regional policy
measures that have enabled EAC to fully implement a free trade regime
coupled with continuous improvement in trade facilitation,”
Signing of the Double Taxation Avoidance Agreement in December 2010
is expected to increase benefits of Customs Union
Significant cross-border Investments and Foreign Direct Investment
Inflows Contrary to initial fears, there is a general fair spread and
distribution of the benefits among the Partner States under the Customs
Union.

36. ACHIEVEMENTS OF THE EAC
Partner States have agreed on a programme to review internal laws to
conform to the CM fully by 2015
Some Partner States have relaxed travel and work permit requirements for
East Africans
East Africans treated as residents while visiting Partner States
Priority given to projects in infrastructure - Roads, Railways, Inland
Waterways, Ports and Harbours, Communications/ICT, Energy and Civil
Aviation, Energy, Environment and Natural Resources Management and
Food Security
24 hour opening of border points within the region, opening of more border
points and creation of one stop border points for busy points e.g Malaba,
Katuna, Namanga, Busia, Gasenyi/Nemba, Isebania
Project on Integration of financial markets has been initiated
Modalities on transferability of workers’ social security benefits are being
negotiated

37. CHALLENGES
Lack of awareness by the Nationals of the Partner
States on the EAC integration agenda and the benefits
of the integration process.
Lack of comprehensive sensitisation of the East
Africans on the provisions of both the CU and the CM
Protocols. inappropriate trade facilitation; inadequate
revenue management; inappropriate customs trade
partnership; inadequate human and capital resources;
NTBs to Customs Union – Road blocks, paper work, i.e
slow pace in the elimination of NTBs …
Slow start of Common Market despite high expectations
during its launch

38. CHALLENGES
Crowded calendars of National Assemblies could delay amendment of national
laws to conform with provisions of the CM Protocol
trade challenges from multiple memberships; and poor state of infrastructure.
Others include inadequate relationships with the private sector and international
organizations; weak legal, regulatory and dispute settlement mechanisms; high
derogation of CET; and inappropriate harmonization and application of Rules of
Origin.

39. THANK YOU