Balancing sustainability goals and economic integration in the EAC

18 June 2015

The regional integration efforts in the East African Community have focused mainly on promoting the free movement of capital, goods, and services. However, such efforts have failed to address economic development disparities among member states. 

There are about 143.5 million people living in the Eastern African Community (EAC) with youth comprising about 45 percent of the total population. The region has enjoyed an average fertility rate of 6 percent between 2000 and 2013 with the same growth projected to continue for the next 10 years. The main challenge posed by this trend is that unemployment continues to plague the youth. Poverty in the region is highest among youth and women.

The current GDP stands US$110.3 billion with an average growth rate projected at 6.2 percent per annum. Agriculture and retail sectors are the main contributors to the total GDP. Despite an improvement in growth in recent years, EAC’s member states rank among the bottom 40 countries in the 2014 Human Development Index.  The benefits of economic growth in the region remain largely inequitably distributed with a significant percentage of the population still living in less than desirable conditions. 

The region also faces serious risks posed by climate change. The 2013 ND-GAIN Index produced by the University of Notre Dame ranks all member states of the EAC as some of the most vulnerable countries when it comes to climate change. Since the agriculture sector remains the backbone of the economy in this region, climate change will have a disruptive effect on economic growth in the region. Therefore, if no mitigation measures are put in place, the Stockholm Environment Institute estimates that the region will experience a loss of 1- 3 percent of GDP each year by 2030.

Achieving MDGs

All EAC member states committed to implementing the Millenium Development Goals (MDGs) at the close of the Millennium Summit. The fifteen years old MDGs were in effect a set of poverty alleviation aspirations aimed at reducing the extreme poverty prevalent in most developing countries. The realisation of some of the MDG commitments in the EAC varies considerably among the member states.

Eradicating extreme poverty and hunger under MDG1 is largely unrealised in the region since most member states continue to suffer persistent problems related to hunger and food security. According to the 2014 Global Hunger Index, the EAC is still facing challenges when it comes to eradicating hunger since most of its member states rank poorly. Food insecurity persists in the region with the 2014 Global Food Insecurity Index also ranking EAC member states as some of the most food insecure countries in the world.

Countries like Rwanda and Tanzania seemed relatively successful in achieving commitments under MDG4 despite the fact that child mortality remains an issue across the region. All the member states are still facing challenges in improving maternal health under MDG5 . In early 2013, the Secretariat launched the Open Health Initiative to assist in implementation of MDG4 and MDG5. However, the fact that this initiative kicked off two years prior to the MDG deadline might have limited its possible effectiveness in assisting member states live up to their commitments.

Kenya, the largest economy in the region, performs well on the implementation of MDG2. Its constitution guarantees the right to free and basic education. The Government of Kenya has since introduced the Free Primary Education Programme, further guaranteeing the achievement of MDG2. Literacy rates in other member states remain among the highest compared to other African countries.

Challenges to sustainable development

This year marks the end of the era of the MDGs, ushering in the post-2015 SDGs. Different global players are preparing for the Financing for Development Summit set to take place in Addis Ababa in July 2015. The global discussions will continue at the Sustainable Development Goals Summit scheduled for September 2015 in New York. Finally, this year is set to end on a high note with discussions on climate change at the COP21 taking place in Paris on December 2015.

It is crucial for the EAC to play an active role in determining the direction of the global discussions mentioned above for three reasons. First, the region relies on development finance to achieve both its regional integration and poverty alleviation efforts like the MDGs. EAC will need to find a more sustainable way to finance the implementation of SDGs post-2015. 

Second, while some countries in the region fared well in their commitments on some MDGs, the overall performance might have been better. It is high time that the EAC establishes deeper integration and ensures that no country lags behind in implementing developmental commitments.

Third, the effects of climate change will severely disrupt the economies in the region. Since the region’s GDP is heavily rooted in rain-fed agriculture, the region needs a concrete vision to reduce hunger and ensure food security. Agriculture is one biggest sectors creating employment in the EAC. Hence, it is important for the EAC to prepare regional recommendations and targets for the COP21. This is especially important considering that the region needs considerable funding to mitigate the effects of climate change.

Changing the trade context

Regional integration efforts must incorporate a broader agenda than trade for more sustainable development within the EAC. It is therefore crucial to shift the focus to implementing these three key priorities: mitigate the threat posed by climate change, address issues related to food insecurity, and reduce the levels of poverty within the region. To do this, the EAC should adopt a multipronged strategy that will addresses economic, environmental, and social concerns in the region.  

Climate change mitigation is of utmost importance considering the contribution of agriculture to the overall GDP in the EAC. According to the 4th EAC Development Strategy paper, this contribution has been on a steady decline. The decline is largely attributed to the disruptive effects of climate change since farming in the region is rain-fed. While the causes of climate change could be attributed to the actions of states outside the EAC, a growing middle class in the region is leading to an increase in combustion emissions and rapid urbanization. These human actions cause deforestation and the destruction of fauna further exacerbating the effects of climate change.

While it is hoped that COP21 will bring about a comprehensive global agreement, the region should not only aim to contribute to global discussions, but take to heart the implementation of regional initiatives. The EAC Climate Change Fund established in 2013 is not yet operational since the obligation of contributing towards the Fund is not binding on the member states. The member states should therefore discuss the modalities of financing the Fund and ensure that the EAC Disaster Risk Reduction Bill becomes law. Second, the EAC must address the root causes of food insecurity. A recent report by the Montpellier Panel shows that 65 percent of the soil in Africa, including in countries within the EAC, is damaged and cannot sustainably support agriculture. Farmers also have to deal with an increase in the cost of arable farmland and farm inputs. Thus, it is essential to adopt a sustainable intensification strategy in the EAC to help reduce food insecurity. Investing in high yielding seed inputs is now a necessity considering the poor state of soil in the region. 

The region is adopting Genetically Modified Organisms (GMOs) as a solution to food insecurity. Most member states have set up national frameworks to regulate GMOs, with the EAC Secretariat having talks on adopting a common regional policy on GMOs. While some would argue that GMOs might actually contribute to food insecurity due to intellectual property rights implications of the technology, the EAC and its member states can take an active role in investing in research and development of this technology. GMOs could contribute to food security if the intellectual property rights is owned locally and the technology is developed taking into account the local conditions and the precautionary principle. This would require financing both by the Secretariat and by the governments of member states.

Lastly, extreme poverty in the region must be addressed if the region is going to enjoy any sustainable long term growth. For this to happen, the EAC must invest in education that meets the capacity needs of the implementing the EAC Industrialization Policy. The Secretariat should monitor the implementation of the Industrialization Policy since some of its targets aimed at poverty reduction have to be achieved by 2032. The EAC must address issues of gender equality considering that some member states are still lagging behind in ensuring the full participation of women in the economy. Such participation of women will lead to a significant reduction in poverty since poverty rates in the EAC are higher among women.

Conclusion

The regional integration agenda in the EAC has focused mainly on the reduction of barriers related to the flow of capital, goods, and services amongst the member states. While this has translated into economic growth and development for some, a large percentage of the population is still facing challenges related to inequitable development. This uneven distribution of the economic gains is largely evident amongst the member states when it comes to assessing the actual realisation of the MDGs. As the world discusses sustainable ways to advance development in the face of climate change, it is high time for the EAC to implement its policies in a manner that contributes to sustainable economic growth and equitable development across the region. 

Author: Francis Osiemo is Research Assistant, Economic Transformation and Trade Programme at ECDPM. 

The views expressed here are those of the author and do not necessarily represent those of the institution with which he is affiliated.

This article is published under
18 June 2015
Building on a strong endowment of natural resources and skills, Africa can become a model of green transformation, demonstrating that growing without eroding the underlying stock of natural wealth is...
Share: 
18 June 2015
How can African countries capitalise on the transition period as envisaged in their Economic Partnership Agreements with the EU to deepen regional integration so as to enhance further the agreements...
Share: