Regional integration and federation are not new concepts. However, they are not easy to realize because they involve heavy costs including psychological ones. The Central African federation of Northern and Southern Rhodesia and Nyasaland was unceremoniously abandoned after only ten years (1953 -63) because white settler Southern Rhodesia would benefit disproportionately. So the Africans in Northern Rhodesia and Nyasaland rejected the project.
In East Africa the idea of a federation was mooted in the 1950s but the three territories were not comfortable with it. When it came up after independence with strong support of Nyerere the federation project failed to take off in 1963 because Uganda did not get on board (Chidzero and Gauher 1986). The cost of federation is very high. The nation-state such as Uganda is likely to be obliterated. Regarding Europe, it has been observed “That new Europe will abolish what Europe has been. Diversity has been the essence of Europe, but the EU abolishes all diversity that matters… [with Europe becoming] a purely geographical expression”(Judd 2005).
The three leaders of Kenya, Tanzania and Uganda then tried East African Community which was launched in 1967. It was unceremoniously abandoned in 1977 after only ten years like the Central African Federation. Therefore, before pushing ahead with East African integration and federation now with five instead of the original three countries we need to understand fully what went wrong and how we can overcome those difficulties if they still exist. Let us begin with East African economic integration.
It is generally recognized that countries that integrate their economies will gain net benefits through trade liberalization or corrective steps will be taken. The issue of equity is therefore important. The history of East African community can be traced to 1917 when a customs union was established between Kenya and Uganda with Tanganyika joining in 1927 (Chidzero and Gauhar 1986). The customs union provided a common external tariff against imports from the rest of the world. The record shows that Uganda has incurred deficits most of the time and suffered de-industrialization and associated forward and backward linkages.
According to the International Monetary Fund (IMF), “For many years [before the East African Community was created in 1967], goods have moved freely between Uganda, Kenya and Tanzania under common market arrangements with a common external tariff against goods originating outside East Africa. However, in view of its large trade deficit with the other East African countries and to protect its new industries, Uganda applied restrictions on certain imports from Kenya and Tanzania for a short time…
Inter-territorial trade increased by more than 75 percent between 1961 and 1965 and in the latter year amounted to British pounds 44 million. In 1966 this trade declined to British pounds 44 million. Uganda’s share of inter-territorial exports increased very slightly in 1966 and was only 24 per cent of total, compared with 66 per cent for Kenya and 10 per cent for Tanzania. On the other hand, its share of imports increased from 32 percent in 1963 to 37 per cent in 1966. As a result Uganda sustained deficits in inter-territorial trade throughout the period under review”. Uganda’s trade deficit with Kenya rose steadily from less than British pounds 2 million in 1961 to British pounds 8 million in 1966(IMF 1969). Deficits have characterized Uganda’s trade within East Africa since then. Kenya has continued to dominate intra-regional trade. For example, in 2008 Kenya recorded a trade surplus of US$ 257.8 million while Uganda had a trade deficit of US$48.3 million (Background to the 2011/12 Uganda budget). As we know, the East African Community collapsed in 1977 because of inequalities in the distribution of trade gains and losses as well as political constraints.
“When it was ultimately forced into dissolution in 1977, after ten years of operation, it [EAC] served as a testimony to the obstacles faced by regional cooperation schemes which emphasized trade cooperation” (Chidzero and Gauher 1986). Uganda’s manufacturing sector has also suffered as a result of trade liberalization.
During a visit to Burundi as part of AU mission in early 2010, we heard complaints from Burundi business community that the country’s manufacturing enterprises were being outcompeted and de-industrializing by cheaper and finer products from members of the East African Community.
Regarding federation Vernon Bartlett (1953) observed that East African federation idea has its origins in 1948 with the establishment of the East African High Commission. He further noted, “But, despite the fashion for federation, a much closer union between the three territories seems unlikely; their policies tend too much to diverge…
Thus in Kenya there is a strong demand for the maintenance of white man’s absolute domination; in Uganda there is a complete acceptance of the fact that it is a black man’s country; in Tanganyika there is an attempt … to gain acceptance from each of the three communities – Europeans, African and Indian that the other two are equally essential to the prosperity of the country”.
Since that time the differences have not narrowed. If anything they have widened with the addition of former (French-speaking) Belgian territories of Rwanda and Burundi. Ideological differences are also wider with military dictators and authoritarians dominating the political landscape.
The differences in economic gains and losses and differences in systems of governance make one wonder whether this is the time to embark on fast track East African economic integration and political federation negotiations. The elites of the East African cooperation project need to pause and figure out how best to proceed in a practical and pragmatic manner without setting timetables. Bartelett was right when he concluded that “The geographical and economic advantages of closer federation are obvious; one pities the men [and women] who have to overcome the obstacles to it”.