Industrialisation plan top on the East African Community Summit’s agenda
as region moves to protect local textile, leather manufacturers and
vehicle assembly firms from unfair competition. PHOTOS | FILE
By CHRISTABEL LIGAMI
In Summary
Importation of used clothes and shoes is to be outlawed in
East Africa once the region’s heads of state adopt the Industrialisation
Policy that will also restrict importation of used motor vehicles.
If the policy that seeks to transform the manufacturing sector
is adopted during the Heads of State Summit in Arusha, Tanzania, on
Wednesday, individual countries are expected to domesticate it before it
takes effect.
The summit has prioritised industrialisation on the agenda, with
the five presidents expected to make a decision on the modalities for
promotion of motor vehicle assembly in the region and reduction of the
importation of used motor vehicles from outside the community, and the
promotion of the textile and leather industries in the region, and
stopping importation of used clothes, shoes and other leather products
from outside the region.
“This means the region, like the other developing countries, is
ready to transition itself into an industrial bloc through a higher
level of production quality and manufacturing practices,” said Betty
Maina, Kenya’s Principal Secretary in the Ministry of EAC. “It will
benefit industry and increase access to locally manufactured products in
the region while at the same time creating more employment
opportunities.”
On the importation of motor vehicles, the presidents will agree
on the proposed new rules on age limit, valuation methodologies for used
motor vehicles and standardised depreciation rates.
There has been mounting concern that vehicle importers are
taking advantage of the variations in the maximum age rule to circumvent
it.
Kenya and Rwanda forbids importation of cars that are more than
eight years old, while Tanzania has a maximum car age limit of 10 years
and Uganda has no limits on car age.
The EAC Council of Ministers last year proposed a ban on
second-hand clothes, bags and shoes to promote the region’s textile and
leather industries.
The presidents then directed the council to study modalities for
the promotion of motor vehicle assembly with a view of stopping or
reducing the importation of used vehicles in East Africa.
“The ban will be done in a gradual phase-out mechanism for a
period of time that will be endorsed by the presidents as proposed by
the EAC ministers,” said Ms Maina.
Common external tariff
In 2009, the region imposed a common external tariff (CET) of 25
per cent on motor vehicles imported into the region as leaders sought
to promote local vehicle assembly.
The EAC industrialisation policy approved by the EAC Summit in
November 2011 provides a regional framework aimed at growing and
expanding the manufacturing and small and medium enterprise (SME)
business so as to create employment and income for the benefit of the
region.
The policy aims to transform the region into modern industrial
economies through high value addition industries an increase in
manufactured exports, thereby promoting employment and purchasing power,
product diversification and increased linkages with other economic
sectors
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