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8-07-2015, 17:31

East African Community, the, 1967-1977

The East African Community, which formally came into existence on December 1,1967, was largely a reorganization of an already existing customs union (also providing other services) between Kenya, Tanzania and Uganda, which shared a joint British colonial heritage.

This customs union had come under increasing strain since the three nations had achieved independence. The East African Treaty of Cooperation sought to make their association more amenable to all involved parties. The three countries were associated by means of a common market that included a uniform external tariff and free trade on imported goods, a common currency, and a number of shared services such as railways, ports, and airways which had been brought together under the former East African Common Services Organization (EACSO). The main problem that needed to be rectified, as seen by Tanzania and Uganda, was that both the common market and services operated to the advantage of Kenya rather than the other two members, and sometimes to their actual disadvantage. In essence, because Kenya was more developed, it attracted the most investment while also maintaining the majority of employment opportunities, as the headquarters of most were located in Kenya.

Attempts at reform during the early 1960s had not worked, and by 1965 the common market was in danger of collapse. A commission under an independent chairman, the Danish economist Professor K. Philip, drew up a new treaty of East African cooperation (EAC), which came into force in December 1967. Its most important features were a transfer tax, an East African development bank, and the decentralization of the various common services headquarters. The object of the transfer tax (an import duty) that the three could impose on each other was to protect new manufacturing industries from existing ones in Kenya; in effect, the measure was deigned to encourage the growth of new industries in the two weaker partners. Under the treaty each member had to appoint a minister responsible for community activities.

A factor that worked against the success of the community was the clear divergence, in both character and political beliefs, of the three heads of state. Kenya’s Jomo Kenyatta was a generation older than both Tanzania’s Julius Nyerere and Uganda’s Milton Obote. While Kenyatta was a conservative pragmatist, Nyerere was a dedicated socialist and something of an ideologue; meanwhile Obote was also in the process of moving to the political left. By 1970 a growing gap had developed between the moderate pro-Western policies of Kenya and the increasingly left-wing policies of the other two. One result of the 1967 Arusha Declaration in Tanzania, for example, was to persuade a number of Tanzanian civil servants to leave government service to go into the private sector, or seek jobs in the civil service.

The coup of January 1971, which ousted Obote and brought the unpredictable Idi Amin to power in Uganda, posed a potentially disastrous threat to the EAC. Tanzania refused to recognize the new government, and Nyerere declined to meet with Amin while giving political asylum to Obote. For most of 1971 the EAC was in crisis while the continuing (and growing) disparity in economic development between Kenya and the other two partners led to more or less permanent tensions between them. At that stage, the three determined to keep the EAC alive, as each considered dissolving the organization to be against their best interests. A row between Tanzania and Uganda centered on Amin’s unilateral appointment of a new minister to the EAC without consultation as required under the treaty. Kenya attempted to mediate between the two nations.

The uneasy relations between the three led Zambia, which had opened formal negotiations in 1969 to join the EAC, to suspend its application. Kenya, meanwhile,

Complained that generous Chinese aid to Tanzania to help finance the TANZAM (Tanzania/Zambia) railway was undermining the demand for competitive goods (that is, Kenyan products) elsewhere in the community. Heavy losses by the East African Airways Corporation were another cause for concern.

By 1973 the situation had demonstrably worsened. Amin’s erratic policies were wreaking havoc with the EAC, disrupting community trade and damaging tourism, which was vital to all three members. At the same time, both Tanzania and Uganda were imposing restrictions on Kenyan manufactured goods. In Kenya’s parliament a call was made to revise the treaty. Amin called for an East African Federation. Meanwhile, most of the joint services or corporations ran into trouble, and the East African Income Tax Department was dismantled. In 1974 Kenya refused to remit Harbour Corporation funds to the head office in Dar es Salaam. Tanzania accused Kenya of depositing funds in a secret railway account to avoid sharing the money with its partners. Relations between Kenya and Tanzania deteriorated to the point that in December 1974 Kenya closed all but one border post with its neighbor, accusing Tanzania of trying to ruin its trade with Zambia.

The crisis in the community came to a head in 1975. In August a treaty review commission was set up to alleviate the growing tension. However, the EAC finally collapsed at the end of 1976, after a seminar attended by community specialists and the review commission both failed to produce any acceptable remedy.

Instead, the primary issue became how to disentangle the various joint services. This was made no easier by the fact that some services, most notably East African Railways, had been woefully mismanaged. Kenya favored a free trade common market and the retention of the East African Development Bank. Uganda was most troubled by the collapse of the EAC because it had no access to the sea. Under Nyerere, Tanzania was always suspicious of the capitalist path pursued by Kenya.

The end came in December 1977, when President Nyerere attacked Kenya for trying to alter the structures of the EAC in its favor and for behaving as though the community was primarily Kenya’s, while treating Tanzania and Uganda as poor relations. There was no precisely negotiated end to the community; rather, it disintegrated gradually, although in January 1978 a Swiss diplomat, Victor Umbricht, was selected to preside over the liquidation of the community’s assets.

Perhaps the differences between the three countries, and the different political paths they pursued, were always bound to bring an end to such an association. The principal reasons for the growing disunity could be summarized under four headings: political deadlock and mistrust, the disparities in gains and losses, the operation of the various joint corporations, and the imbalance in trade (trade restrictions between members had been increased through 1974).

Guy Arnold

Further Reading

Arnold, G. Kenyatta and the Politics of Kenya. London: J. M. Dent and Sons, 1974.

Bevan, D., et al. East African Lessons on Economic Liberalization. Brookfield, Vt.: Gower Publishing Co., 1987. Hazlewood, A., ed. African Integration and Disintegration. Oxford: Oxford University Press, 1967.

-. Economic Integration: The East African Experience.

London: Heinemann Educational Books, 1975.

Hughes, A. J. East Africa: The Search for Unity. Harmondsworth: Penguin Books, 1963.