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Vol 50 No 13

Published 26th June 2009


Synchrobudgets

As they approach economic union, East Africa's finance ministers struggle to balance the books at home

The East African Community, grouping Burundi, Kenya, Tanzania, Uganda and Rwanda, plans to set up a common market this November. The opportunities are potentially vast: the EAC comprises 120 million people, with a combined gross domestic product nudging US$50 billion. Negotiators still need to agree on tariffs, local protection and new rules for land use and work permits. In the past, Kenya's larger and more diversified economy was regarded as the biggest beneficiary of the regional project, giving its businesses more open trade and the chance to invest their surpluses in other members' relatively cheap assets. However, Kenya's pre-eminence has been shaken by its political crisis last year. Rwanda's growth in GDP has been strong over the past decade, while Tanzania and Uganda would obviously benefit from inward investment and from membership of a larger economic community but they worry that Kenya's weight could stifle some of their nascent agro-processing and light manufacturing industries.

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