Tanzania must play ball or quit the EAC

If there’s anything that last month’s  Sixth East African Business Summit in Kigali failed to show, it is the feel-good family atmosphere that is needed for regional integration. It is shameful that many years after the revival of the East African Community (EAC), we are still negotiating on free movement of people and labour.

Presidents of Kenya and Rwanda, Uhuru Kenyatta and Paul Kagame, reignited this rather boring debate. Uhuru chose to be diplomatic and hid in the vagueness of “some countries” that fear competition. Truth be told, Tanzania has been the biggest stumbling block on the road to integration. It is always erecting bumps. This has turned the East African Community into some sort of polygamous fiasco, where every partner has veto power and a slight change in mood evokes nasty actions.

Yes, that is what all-equal partnerships are all about. But it turns it on its head when the independence of partners slows down progress. The other four partners must stand up to Tanzania and tell its leadership to play ball or run the risk of being left out. East African countries are better together than lonely and shaky economies. The trend globally is blocs. This has given a number of region strong say in world affairs, both economically and politically.

The euro is one of the strongest currencies in the world and that’s because it derives its strength from the European Union member countries. Big ones such as Germany and France lift the struggling ones like Greece. Ditto United States. This is the kind of unity of purpose that should underpin EAC. Minority interests will keep dragging integration behind. 

All unions, and the EU is a good example here, are give-and-take affairs. Every partner gains in a way and loses in another. This cannot be equal as some lose or gain more than others. When looked at in the long term everything is eventually evened out.

This is how Tanzania should look at the EAC. It might have weak economic structures that could easily be disrupted especially by more aggressive Kenya, but is should not lose sleep over that. Perhaps that is what is needed to fast-track its economic performance. With new competition from Kenyans, Ugandans, Rwandese and Burundians, Tanzanians will be forced to run faster and catch up. That means its economy will have to grow even faster.

On the other hand, it will benefit from expertise and exchange of various factors of production, including technology, which will be a major lift for its economy and its people. Tanzania leaders have always shown contempt for EAC. But they should see the buttered side of their bread. If not, they should leave the rest of us to match forward. There should be no middle ground.

Silver-lining in rebasing 

It was all cheers after revised figures showed that Kenya is, in fact, a middle income economy. These statistics, brought about by rebasing of the economy, may not make sense for the low-ranked Kenyans, especially the near 50% who live in poverty. They can’t see any economic gains or improvements in their living standards. But they are inspiring figures none the less. 

They show that indeed, our economy growing in real terms. The super-rich and growing middle class must be interpreting the figures with glee. For it in these categories that current growth is markedly felt. Real estate and telecommunication sectors increased their contributions to the economy, and this was not unexpected.

Housing market has been sizzling for the last ten or so years and has created enough billionaires and more millionaires in Kenya. It is bound to continue doing so as more and more Kenyans aspire to own homes and commercial properties. Capturing this sector is very important as it has become the number three contributor to GDP. 

Rebased GDP statistics can transform a county. Nigeria did that recently and overtook South Africa to become the biggest economy in Africa and 26th globally. Ghana used this new methodology to recalculate its national wealth in 2010 and found that its economy was about 60 percent bigger than it had been previously thought.

Being 25% bigger doesn’t mean everyone becomes richer. What it means is that economic indicators have improved and the fundamentals favour sustainable growth going forward.  That’s something to celebrate in those numbers, even though the feeling alone doesn’t put food on the table.

The figures present a gem for economic planners, policy makers and business people. They form a basis to make informed decisions on investment and development programmes. We should take advantage of the different scenarios that the rebasing provides to plan the economy well. This way we will be able to know how much the economy is worth in terms of production and consumption.


Another important observation is that Vision 2030 is within sight. What is needed is an acceleration of projects and proper prioritisation to get there. Rebasing is not a strange thing. The UN Statistics Office requires every country to rebase its national statistics every five years to reflect the changes in the economy. 

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