In economic terms, the East African Community (EAC) is underperforming. For instance, a quick comparison of the region with the development trajectory of the United Arab Emirates (UAE) shows that the EAC has been resting on its laurels for far too long. Something has clearly gone wrong.
When the UAE was formed in the early 1970s as a federation of several underdeveloped states where some oil had been discovered, EAC countries (then comprising Kenya, Tanzania and Uganda) had been independent for approximately a decade. They were already enjoying a steady growth that was powered by the exploitation of their natural resources, as they invested in the development of their social and economic infrastructure. The three universities in these three countries (namely the Universities of Dar es Salaam, Makerere and Nairobi) were radically focused on developing excellence in the human capital of their respective countries.
Half a decade later, the EAC had collapsed and another two decades down the line, the economies of the three former partner states were all on their knees, begging bowl in hand before foreign donors (mainly the World Bank and the IMF) who dictated the economic reforms they would adopt. These reforms partly worked but left the countries heavily indebted with an ever-increasing burden on the shoulders of their taxpayers. On the other hand, the UAE had become a formidable centre of international trade that both developed and underdeveloped countries could no longer ignore.
What did the UAE do right, but East Africa did wrong?
Both the UAE and the EAC had looked to the outside world for possible transferrable developments. The UAE decided to think for themselves and concluded that what they wanted from the outside world were trade and business. The country started by putting its oil proceeds into developing duty-free trade systems and infrastructure. Later on, they accelerated the diversification drive, adding hospitality to their key defining attributes.
On the other hand, East African countries decided to outsource the thinking process to the outsiders (through the IMF and the World Bank) who discretely but firmly oversaw the writing of their annual budgets. These countries put the future of their children in loans, a chunk of the loans being ‘budget support’ which makes it difficult to measure whether the loan is performing well or not. Even the infrastructure development loans were so unfairly structured that they did not develop local capacity; for example, to date, local engineering companies are largely confined to doing “earthworks” (digging trenches) in the construction of roads that are funded by external lenders, while foreign engineering companies take up the more substantial jobs.
Worst still, it is never clarified, at least to the tax-paying public, if such loans meet the first principle of borrowing – that is to generate the capacity to pay back the loan. East African taxpayers are never told how many dollars each borrowed dollar would generate and by what time. It is blind borrowing on the borrower’s part.
As East African countries entered the debt-seeking phase in the mid-1990s, they revived the EAC and attracted more members, namely Rwanda, Burundi, South Sudan and, more recently, DR Congo, forming a potentially more formidable seven-member block.
The current situation
The UAE is still standing strong and was not even affected by the Arab Spring – the spate of uprisings that a decade ago destabilized Arab countries and saw the devastating, opportunistic interventions of external forces that left once-prosperous states in the region in ruins.
Moreover, the UAE is now a top global investment and holiday destination. Even East Africa’s great tourism attractions like coastal beaches and great wildlife are starting to pale in comparison to what the UAE (already the world’s travel hub) has to offer. The UAE is, for example, developing a national park that has more animal and plant species than the Maasai Mara and the Serengeti put together. The compact park which is just several square miles large can be toured around in a matter of hours.
On its part, the EAC’s goal is to form a political federation. Euphemistically, the relationships amongst the members are not always good. To make matters worse, internal political tensions in some member states have pushed refugees to stream from one member country into another at an unhappy rate. The said economic union is not performing to expectation. Labour movement within the region is minimal despite the massive untapped human resource base. Instead, East African youth are flocking to other regions, especially the Middle East and Europe for economic tourism. The proposed monetary union/single currency in the region is behind schedule by years. Despite the massive abundance of fertile soil and favourable climate in the region, there is biting hunger in some areas. The Covid-19 came as a cruel reminder of the ever-increasing gap between the EAC and the UAE when a charity organisation from the UAE gave millions of meal packages to citizens of an EAC country, who expressed extreme gratitude when they should have been the ones to give food to the desert country.
Can the EAC catch up with the UAE?
The EAC shouldn’t just aim at catching up with the UAE, because it can do far better than the naturally disadvantaged middle eastern federation. As the world finds itself on the verge of the Fourth Industrial Revolution, access to knowledge and technology is no longer a big problem. Serious-minded people in the less developed countries can easily access knowledge. While investments in research and innovation are necessary pre-requisites for any sustainable development, they take time to yield fruits. However, this should not be an excuse. In the meantime, East African countries can use their resources to buy the technology they need. Ideally, those at the helm at the EAC should map the resources in the region, take stock, plan together and then source the technology they need to get where they want to take their people. There is no need to re-invent the wheel. What took other developed countries centuries and decades to build can be done in a few years by those who invest resolutely and wisely, and acquire the right technology.
But if East Africans do not think for themselves to decide how to use the resources in their territory (stretching from the Atlantic to the Indian Ocean), they may not have much left to plan with by 2030, as the marauding outsiders would continue to work with the abetting and corrupt local political and economic elite to mortgage away most of the natural wealth.