Why joining East Africa Community now is an economic suicide for South Sudan?
8 min readBy Garang Biar, Juba, South Sudan
March 3, 2016 (SSB) —- East Africa Community is a Regional intergovernmental Organization of the Republic of Kenya, United Republic of Tanzania, Uganda, Rwanda and Burundi, with it has a headquarter in Arusha Tanzania. The main aim for which this community was form is to widen and deepen co-operation among the Partner States in, political, economic and social fields for their mutual benefit. To this extent the EAC countries established a Customs Union in 2005 and a Common Market in 2010.
The next phase of the integration will see the bloc enter into a Monetary Union and ultimately become a Political Federation of the East African States. There are many other protocols that have been developed by the member states apart from the stated protocols of custom unions and the common market but I am going to base my arguments on these two protocols and see how we shall benefit from the union if we join as demanded by our political elites.
In the real world experience, no country is independent to the extent its can do without joining any of the regional economic block. This is done so for a country to benefit from the economy of scale since different countries supplies different kinds of goods and services for which they are well endured to this common market thus, each country can produce anything that they have a great comparative advantage for the union hence encouraging the mass production, improving efficiency and the effective uses of the scarce resources and all the member countries got benefitted from this mutual cooperation. South Sudan is not an exception to belong to any of the regional economic block like East Africa community so long South Sudan can enjoy those mutual benefits that other nations enjoy when in such union.
However, Custom union and common Markets are always found by countries that have an equal strength in term of industrials, human, and socioeconomic developments such that they can compete favorably without having any member state that can be disadvantaged by this mutual benefit from the body. This explains why the first East African Community collapsed because all member states were not on equal footing. Therefore, the question is; Is South Sudan at the equal footing with other member state to compete within this union favorably? Which sector of the economy do we have a comparative advantage in order to benefit from East African community? Why do some member state such as Rwanda and Burundi delay without joining the union at the beginning?
Answering the above mentioned question will give us some clue of the advantage of joining now. Since the aim of this body is to widen and deepen co-operation among the partner states in political, economic and social field for the mutual benefit. To me the mutual benefit is brought about by the strength of each country in the union because it’s this area of a great comparative advantage that the country relies on in the union. For the case of South Sudan, we can’t compete favorably in this union in all the aspects given our weak import-dependent economy, poor institutional development and low human development. It should be remembered that those common markets and custom unions are forums and platforms in which people sell and buy goods and services amongst the member states. Then there comes a question; what is South Sudan going to sell and buy in this market?
The answer is that South Sudan will sell nothing since they don’t produce anything and it will buy almost everything because it an import dependent economy. This will put us in an unfavorable term of trade in this union because the volume of imports will be far much greater than the volume of our exports. In international trade, an import is goods and services you pay hard current to obtain it while export is any goods or services you earn hard current from selling its. Our imports ranges from consumable goods to durable goods and its includes the number of expatriates that our government are paying in different institutions as consultants.
All these out matched the meagre amount of money being fetched into our economy after the sale of oil which is the sole export that bring dollars. Therefore, no miracle can change our import dependent economy and improve our position of term of trade in this union if we join now. Even the very oil that we have is being imported from those who processed and its cost a lot of hard currency for the country to import it in order to run our generators’ electricity generating country.
Coming to the point of human development, human resource is the major engine to foster economic growth, East Africa is a home to approximately 143.5 million people compare to 11 million south Sudanese according the estimation of South Sudan Population in 2015. When we compare this huge relatively skilled population with our low unskilled population of South Sudan, then we shall end up being swallow alive if we risk joining now. We are supposed to learn from the current domination of different economic sectors where our poor business minded populations are tailing in all sphere of business in their own country.
Being in a custom union or a common market does not grantee development. We can learn an example of Ethiopia which one of the fast growing economies in Africa and it is not a member of East Africa community. Ethiopia is growing because they have put a trust in developing their own system and they set their own pillars of development.
The issue of custom union; if we tax all the goods coming into our country from East Africa, then it will be of economics advantage as we shall have all these taxes to add onto the revenue which is solely dependent on oil that account for over 98 percent of all the country’s revenue. This is not a lost to our country but a gain because all the neighboring countries will be ready to supply our market with their surplus products from their economies. It will be south Sudan exempting taxes from East Africa and East Africa is exempting nothings since we are not exporting any goods to them if we are to enter into the custom union. Where do we benefit here?
The only country we can hurriedly speed up custom cooperation is Sudan because we share the longest border and from the experience, Sudan supply about eight states of the ten state very fast using two routes; the railway route supply the four states of Greater Bhar el gazal at once and the Nile river transport supply the whole of Greater Upper Nile, Lake State and Central Equatoria making goods so cheaper in the whole country. The trade routes from Sudan are also advantageous than The East African one because they are not affected by the season unlike the East African routes that make almost greater Upper Nile and Bhar el gazal more vulnerable during the rainy season.
It is advisable to deal with each East African country on bilateral basis instead of dealing with them as a block. We need to agree with each country how best we can mutually relate as per different economic sector. This would allow us to identify areas of our strength or of great comparative advantage and we develop this sector before we join the union.
Therefore, joining East African Community at our current stage and state of development will leave us vulnerable and uncompetitive in community as per all the three protocols which are the main protocols of East African Community. We shouldn’t risk the generation to come for the interest of few individual elites who want just to roam in East Africa after the wipe of the vista fee and for them to feel more secure with ill acquire wealth in East Africa. There are some people who are trying to reward sons and daughters of their landlord with jobs at the expense of the poor south Sudanese who are unskilled and cannot get jobs or do business in East Africa.
In conclusion, we need to fuel agriculture using the oil money in order to encourage local production that can facilitate the industrial growth and development. After here, we can be able to export the processed goods into this union and we shall be at the favorable side of the trade instead of depending on the import from East Africa. We need to develop our service sector such that we can start exporting our services such as education, health, electricity, transport and communication amongst other services that can earn us foreign exchange as exports for our country. This cannot happen if we join now since our institution will be out competed by the relatively developed institution from East Africa.
For instance, if we connect the electricity from Uganda as the government is planning to do so, we will never construct our own dam to generate our electricity because Uganda will always try to make sure that they sabotage construction of more dam and this position can easily be supported by Egypt that has a veto right over Nile water. This will make our economy will more weak if it’s depend on the foreign power for electricity. Therefore, joining East African community is an economic suicide if we make at this time.
The writer is a concern South Sudanese and can be reached at garangbiar@yahoo.com; Or call on 0955360123
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