Somalia: EAC’s Missing Piece
The sixth leg of the diplomatic tour of HE Hassan Sheikh Mohamud (HSM), president of Somalia was to Arusha, EAC’s headquarters. This coincided with the annual High-Level Retreat for EAC Heads of State on the theme, Deepening Integration, Widening Cooperation. The presence of the Somali president in the meeting was a telling sign of changing tides in the region. Previously, EAC members declined Somalia’s bid to join the regional bloc twice, in 2012 and 2017, during HSM’s first term in office. A later attempt by his predecessor HE Mohamed Abdullahi Farmajo in 2019, which saw the acceptance of DRC instead, and EAC’s non-responsiveness spoke volumes about the uncertain future of Somalia in the region.
HSM’s warm reception now is a telling sign of good things to come, a manqué dream from his first term in office that is now renewed with a zealous effort to cement Somalia’s desire for stability and peaceful coexistence with its neighbours. Crucially, EAC’s heads of state’s reception of the Somali president shows a paradigm shift in the perception of the country’s role in the region. Beyond politics, the economic potential and security of the horn are best realised with the inclusion of Somalia in EAC.
The question now is, when and not if Somalia will accede to EAC. Somalia’s accession to the EAC will take approximately 2 years, with the satisfaction of EAC’s condition of Articles 3 and 4 of the Treaty for the Establishment of the EAC. These conditions include respect for universal principles of good governance, democracy, the rule of law, respect for human rights and other civil liberties. Similarly, the recent appointment of HE Abdisalam Hadliye as Somalia’s new presidential Special envoy for the East African Community (EAC) shows a clear sign of Somalia’s seriousness about joining EAC as the 8th member state in the regional block.
In this article, we discuss the role of Somalia and the benefits it can gain as well as contribute to the region. But first, an understanding of the anatomy of EAC is required.
Anatomy of the EAC:
(i). Origin
Founded in 1967, the East African Community (EAC) is a regional intergovernmental organisation headquartered in Arusha, Tanzania. It developed from the East African Common Services Organisation (EACSO) operating from 1961–1967, which had a tripartite economic union between Kenyan Colony, Ugandan Territory, and Tanganyika (now Tanzania) Territory. It later became the East African Community from 1967 until its collapse in 1977. Following its revival in 2000, the community saw the inclusion of Burundi and Rwanda in the newly reformed East African Community in 2009. Currently, EAC consists of seven current member countries, namely, DR Congo, Burundi, Kenya, Rwanda, South Sudan, Uganda, and the United Republic of Tanzania. The region is home to 300 million people, with 22% considered an urban population, with a combined GDP of US$ 240 billion.
The regional integration was formalised through the Treaty for Establishment of the East African Community ratified by on by its original member states, Kenya, Uganda, and Tanzania on 30th November 1999, with Rwanda and Burundi acceding to the EAC treaty on 7 July 2007.
This is an economic block, Considered the fastest growing economic block in Africa and the world, EAC boasts as the most successful economic block in Africa, a testament to its ambition. The regional contentions marred the attainment of political and economic union and harmony, despite the ongoing political disagreements and rifts between member states, such as the Kenya and Tanzania rift and Rwanda and DR Congo rift, Rwanda and Uganda tensions.
(ii). Pillars of EAC:
(a). Pre-Integration:
As outlined in Article 5(2) of the Treaty for the Establishment of EAC, it is based on three pillars: common foreign and security policies, good governance and effective implementation of the prior stages of Regional Integration. This will upgrade Somalia’s asymmetrical agreement and inclusion power to reap its strategic destiny as a functioning modern state.
(b). Post-Integration:
Additionally, EAC outlines what integration in the region looks like along the lines of pillars of EAC Regional Integration, which include a customs union, common market, monetary union, and a political federation. Regarding the customs union, the EAC strives to establish a free trade zone, where member states agree to impose zero duty on all goods and services through the agreement of common external tariffs, meaning that member states when importing goods from countries outside EAC zone will be subjected to the same tariffs when they sell these goods to any EAC member state.
The EAC also has a common market, which is the region’s second integration milestone that has been in effect since 2010. The goal of establishing a common market is to accelerate economic growth and development. This has to do with the maintenance of a bilateral stance on the 4 freedoms of movement (Goods/services, Labour, Persons and Capital) in all the factors of production, and two rights (Residence and Establishment).
Another key pillar of the EAC is the monetary union, an ambitious goal of establishing a common currency for the regional bloc. The monetary union agreement was signed in 2013, in accordance with the EAC Treaty, the East African Monetary Union (EAMU) outlines the pathway to converging the regional members’ currencies into one currency.
Finally, the EAC treaty also envisages the creation of a political federation, which will establish a new super state under a single authority and government. This is the ultimate goal of the EAC Regional Integration, the fourth step after the Customs Union, Common Market and Monetary Union.
1. What is in it for Somalia?
Fortunately, Somalia’s passionate interest to join the East Africa Community has never lost the hype at home for the last two decades. This official integration bid arguably has twin strategic interests for Somalia. In his remarks during the 22nd Ordinary East African Community Heads of State Summit in Arusha, President Mohamud mentioned how his country is eager to benefit from the integration and how Somalia will contribute to the trade bloc as well.
“I am very happy to see the Somali flag flying next to the flags of your countries today and I hope that it will be the same in the coming years. Somalia is a very rich country with natural resources, livestock, and agricultural resources. More importantly, we have a vibrant business community. Indeed, Somalia has a great potential to contribute to this great community,” stated President Hassan Sheikh Mohamud
Despite the fact, that Somali will be a great contributor to the East African community with its rich, virgin natural resources that could be a game changer for the region’s trade and improve the quality of lives of over 300 million people in the bloc. This is also intertwined and reflects the body’s vision of widening and deepening its partner states for improving the quality of its lives as one of the fastest-growing economies in the world. Since Somalia has unique circumstances than current or recently accessed partner states in the community, it will reap several strategic gains for its state-building and transformation into a modern state in the region.
Among the most strategic potential gains for Somalia’s accession to East Africa Community, three stand out in relation to the nation’s current needs: political, economic, and social integration.
Firstly, a meaningful accession to EAC will help Somalia to enjoy political support from the partner states in the bloc. At the moment, Somalia has mutual agreements with some of the partner states, but inclusion into the EAC will further strengthen peace, security, and good governance in Somalia due to the cooperation and collaboration Somalia will get from other members in the EAC. Since Somalia is facing unique challenges in state building than other countries in the bloc, this will expedite the region’s commitment to supporting Somalia’s peace and transition. Additionally, Somalia will technically be forced to undergo speedy institutional building, including the finalization of the constitution, and completion of its federal governance structure.
Secondly, Somalia will join the larger EAC Common Market and Common External Tariff framework to facilitate its trade within the region. Somali private sector will be the biggest winners in this since their entrepreneurial spirit is beyond their national borders. Currently, Somali entrepreneurs are hugely invested across the East Africa region with tougher challenges and conditions from their host countries. Hopefully, the inclusion accession will create favourable trade and investment for entrepreneurs to invest and ease of doing business. Additionally, Somali entrepreneurs will be able to export its surpluses and the competitive advantage as a country to the bloc to increase the economic output and production as a nation.
Finally, ordinary Somali citizens will enjoy lesser immigration rules and movement restrictions. Currently, thousands of Somalis travelling within the region face restricted immigration regulations. The visa-free movement will increase the number of Somalis seeking to further their education within the region. As a member of the EAC, Somalia will also adopt the East African Community passport to move freely in the region. Most Somali youth seek to advance their studies or seek medical treatments from abroad. If those opportunities are made attainable for Somalis within the region, it will go a long way in promoting the socioeconomic integration of Somalis in the EAC. Consequently, the Somali people will be able to interact with, share, and learn from the rest of the EAC member states and bring those valuable lessons back home to further strengthen and rebuild their country.
2. What Is Next after President Mohamud’s Bid?
Somalia now enjoys a common consensus from the EAC member of states for its second official bid for the integration after it was communicated through the communique of the Head of states meeting in Arusha. According to the communique, it noted the need to expedite the verification process of Somalia’s bid to join the regional bloc in accordance with the EAC procedure for admitting new members.
At least six milestones have to be achieved by Somalia to integrate with EAC;
i) Verification Process
This is a big win for Somalia, and from now on the EAC council of ministers will be sent to Somalia to undertake a verification exercise of establishing the country’s level of conformity in accordance with Article 3 (2) of the Treaty for the Establishment of the EAC.
ii) Accession to the Treaty Establishing the East African Community
Hopefully, based on the positive recommendation from the verification mission by the EAC council of ministers, the current EAC chairperson H.E General Évariste Ndayishimiye of Burundi and President Hassan Shaikh Mohamud will sign the Treaty of Accession of Somalia into the EAC. Thereafter, Somalia will undertake internal and constitutional processes for the ratification of the treaty of accession. This internal process includes the ratification of the treaty of accession by the parliament.
iii) Depositing the instruments of acceptance with the Secretariat
After successful ratification of the treaty by the Somali parliament, Somalia will deposit the instruments of ratification with the EAC Secretary General to register the treaty of accession and its instruments with the relevant international bodies including the African Union, and the United Nations, the World Trade Organisation, and others.
iv) Somalia Joins EAC’s areas of cooperation
Several areas of cooperation will be identified during negotiations between Somalia and EAC and it will be determined in the report during the verification mission. These areas should include trade liberalisation and development, investment and industrial development and liberalisation of movement of persons, labour, and services.
v) Roadmap for integration of EAC
As the final outcome of the process, a road for integration will be developed which will detail how Somalia will implement the core EAC commitments including the customs union, common market, monetary union, and political federation.
vi) Are there prerequisites for Somalia to integrate with EAC?
Definitely, there must be requirements to be met from EAC perspectives and similarly, there must be benchmarks for Somalia as a partner state. To take full leverage and capitalise on what the community offers to Somalia, the institutional building should top priority for Somalia within the duration of the integration process. Somalia’s institutional rebuilding must be a policy priority for the government, and it can be simultaneously pursued alongside with integration process. The provisional constitution should be completed, the federal model system must be consensually agreed upon, and the entire state-governance structure should be functionalized with set modern values of democracy, good governance, rule of law and respect for human rights.
Additionally, Somalia should unlock its potential to develop its competitive advantage in exchange for the rest of the community. To mention one, Somalis could become a regional hub for the supply chain to facilitate and interlink the landlocked countries to the Indian Ocean. To happen this, Somalia should modernise and build its ports, build railways, and improve its logistical capacity to better serve and contribute to the bloc.
A key outcome of HSM’s meeting with his Kenyan counterpart is the resumption of the khat trade and Kenya’s importation of Somali fish. This highlights Somalia’s budding competitive advantage, exporting 164 tonnes in 2019; Somalia’s flat fish export grew by 112.99 per cent netting US$0.27m in 2019 alone. Somalia’s underdeveloped competitive advantage is in fishing. This could become its main export to the region; Kenya for example relies almost entirely on China for its fish imports. Tapping into local markets like Somalia’s could reduce the cost of fish in the Kenyan market.
Summarily, Somalia must be a contributing member of EAC, with a role to play, it is our belief that this can best be realised through capitalising on Somalia’s competitive advantage, with a goal of developing a competitive, resilient and modern supply chain that eases the movement of goods and interlinks the region to the Indian ocean. Critically, Somalia must focus on identifying the best course of action to strengthen the economic utilisation of its competitive advantage internally and externally for the region. Deepening and widening the boundaries of EAC is not just diversifying its composition but also furthering the regional bloc members’ peaceful and prosperous co-existence.
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Written in collaboration with Mohamed Okash, Editor-In-Cheif, Somali Business Review
This article was first published in Somali Business Review on 19 August 2022.
