Impact of east african common market protocol on Kenya’s regional trade

Abstract

The Protocol on the Establishment of the East African Common Market entered into force on 1 July 2010, following ratification by all the five Partner States namely: Burundi, Kenya, Rwanda, Tanzania and Uganda. The Protocol was signed by the Heads of States on 20th November 2009, coinciding with the 10th Anniversary celebrations of the revived Community. The overall objective of the Common Market is to widen and deepen cooperation among the partner states in the socio- economic, political and environmental meadows. This was to be realized through removal of restrictions on the movement of goods, persons, labour, services and capital, and the rights of establishment and residence. The problem statement is that, there is an indication of the of the protocols which impinge East African Community integration process cooperately and at the state level are not yet fully-fledged, operationalized and completed. The purpose of this study was to investigate the impact of East African Common Market Protocol on Kenya‘s Regional Trade, the study‘s specific objectives was: to assess Kenya‘s implementation of the EAC Common Market Protocol, to find out the achievement of the EAC Common Market Protocol on Kenya‘s regional trade, and to examine the challenges facing the EAC Common Market Protocol in Kenya. The research questions were: How far has Kenya implemented EAC Common Market Protocols? What has Kenya achieved from the EAC Common Market Protocol intra-regional trade? What are the challenges facing Kenya in the EAC Common Market protocol? The hypothesis of this thesis is that partial implementation of the EACCM has rendered the protocol non-operational. This study was guided by the theory of functionalism which is associated with the works of David Mitrany. The study was carried out along the East African borders of Busia, Malaba and Namanga which is dominated by cross border trading transaction, clearing and forwarding. The population of the study was the employees of the Ministry of Tourism and East Africa Community and the Ministry of Foreign Affairs and International Trade, cross border traders, bus and long distance drivers. Mugenda‘s 10% -30% (1999) formula was used to calculate the sample size, which was 95 and the samples was proportionally allocated to the different strata. Respondents were selected through simple random sampling, stratified sampling, purposive and convenient sampling techniques. A questionnaire was used to collect quantitative data from the respondents. Both primary and secondary methods were employed as data collection instruments. Data was analyzed using content analysis. This study adopted descriptive research design. The findings of the study revealed that Kenya‘s active participation had significantly increased trade activities and trade liberalization has moderately influenced the Kenya‘s production level, East African Community CMP has influenced Kenya‘s regional trade implementation of the protocol as enshrined in the EAC CMP Treaty, several benefits accrue to member states as a result of joining the common market: the common market has led to increased trade activity within the Community (71%), whereupon consumers in Kenya have accessed a variety of goods and services with competition serving to enhance quality of products. Traders on the other hand have the benefit of access to a larger market and production base thus higher profits and lower costs with increased productive efficiency as they expand their operations. Nevertheless, institutional challenges threaten the common market to a large extent on account of coordinative failures inherent in the interstate set up of the EACCMP. Challenges identified includes: border restrictions (48%), undeveloped infrastructure, economic dominance of some of the member states with economic benefits of increased productive advantage skewed in their favour; setbacks in regional integration efforts within EAC due to delays in harmonizing tax regimes by EAC member states. On the contrary, non-tariff barriers were found to be a challenge, to some extent, in the EAC common market. In conclusion the benefits of regional integration within the EACCMP however, greatly outweigh the constraints experienced whereupon the study suggests that the level of integration be fast tracked to a partnership. This study recommends that member states should enhance infrastructural development to facilitate movement of labour, capital and labour in the intra-regional trade of East Africa.