T o w ar d s S u s t aina b l e D e v e l o p m e n t E P R C Briefing East African integration: How can it contribute to East African development? Key Points The integration process of the East African Community does have potential to improve the prospects for poverty-reducing economic growth The potential is greatest in two areas: cooperation in infrastructure and other public-goods provision, and growth-enhancing institutional change Progress on institutions will happen if business pressure groups and other stakeholders interested in rule-governed policies participate strongly in the upcoming negotiations on the formation of an East African common market This could result in institutions favouring investment getting ‘locked in’ by regional agreements, so that political favouritism and protection become progressively less significant factors in the development of the member states • • • • 1. Issues and approach The East African Community is being reborn. Since the East African Community (EAC) Treaty of 1999 and the formal launching of the new Community in 2001, the pace has been quickening. A process creating a free trade area and customs union between Kenya, Tanzania and Uganda was begun in January 2005, and negotiations are now starting to establish a full common market between the three countries plus Rwanda and Burundi by 2010. Meanwhile, discussions are under way with a view to ‘fast tracking’ the final component of the integration process, political federation. In view of the tight timetable, there is surprisingly little discussion of the possible benefits and risks that integration poses for the peoples and societies of East Africa. What are the developmental benefits of the EAC, taking into account other integration processes taking place in eastern and southern Africa? What are the opportunities to be seized and the risks to be averted by development-minded stakeholders in the region? Will the new EAC be more successful in sustaining an integration dynamic than the Community dissolved in 1977? In what ways do the political and economic drivers of the process differ from those that propelled and then destroyed the previous experiment? This briefing is intended as a contribution to a more intensive and focused debate on these issues in East Africa. Funded by DFID and prepared jointly by think tanks based in Dar es Salaam, Kampala, Nairobi and London, it draws on a literature survey, workshops and interviews undertaken during May-September 2006. David Booth, Diana Cammack, Thomas Kibua, Josaphat Kweka and Nichodemus Rudaheranwa February 2007