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Capital Markets

Africa: Trade hangs in the balance

Infrastructure development and streamlined processes have helped the East African Community make great strides to become one of the most successful trading blocs in Africa. But regional inconsistencies threaten to derail further integration.

Trade_hangs-envelope

General Motors East Africa’s (GMEA) headquarters is a few miles from the heart of Nairobi along the Mombasa highway. While the traffic moves quickly, time is wasted getting to the Motor Vehicle Association quarterly meeting being held there because security is strict: the whole city has been on high alert since the Westgate Mall terror attacks last September.

In a cramped meeting room, around 15 people, mainly men, who all work in the automotive industry in Kenya, are sitting around a small conference table. Representatives from General Motors, Scania East Africa and the Associated Vehicle Assemblers are all present.

There is a prolonged and heated debate over the shipment of 400 buses that has made its way from offshore into Kenya, and no duty has been paid for them. The duty free import of buses from outside of the East African Community (EAC) should not be legal, but it appears the government has let this happen.

The members voice their frustrations at the importing of motor vehicles intensified by centralized imposition of tariffs on vehicles traded within the EAC, which, in theory, should not exist due to the streamlining of import duties within the community.


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