, Tanzania and Uganda. In effect, it is a new form of customs tariff on intra-East African trade. The criteria for imposing it on the manufactured goods of a partnerstate are the following:
—the consuming state must be in deficit on its overall trade in manufactures with the other two partner states;
—it must not impose the tax on any value of manufactured goods exceeding the deficit in trade;
—it can impose the tax only when goods of a similar description are being manufactured locally or have a reasonable chance of being so manufactured in the near future (three
Mr. Paulo Drummond, Mr. Ari Aisen, Mr. Emre Alper, Ms. Ejona Fuli, and Mr. Sébastien Walker
This paper examines how susceptible East African Community (EAC) economies are to asymmetric shocks, assesses the value of the exchange rate as a shock absorber for these countries, and reviews adjustment mechanisms that would help ensure a successful experience under a common currency. The report draws on analysis of recent experiences and examines likely future changes in the EAC economies.
Mr. Emre Alper, Ms. Wenjie Chen, Mr. Jemma Dridi, Mr. Herve Joly, and Mr. Fan Yang
This paper assesses the extent of economic and financial integration among the East African Community (EAC) along a number of dimensions and, where possible, whether integration has increased in the wake of the major regional integration policy milestones.
to coordinate and review their monetary and balance of payments policies. Although each partnerstate maintains its own currency, they constitute in fact a joint monetary area. Initially, the banknotes of all three partners circulated freely throughout their territories and were accepted by the public at par. In addition, each partner undertook to exchange the notes of the others, and to effect remittances expeditiously at par without charging any commission. 31 All bona fide payments for current transactions as listed in the treaty were to be made freely among
The East African Community (EAC), with its common market, transport, and communications corporations, scientific research institutions, and the East African Development Bank (EADB) was once regarded as a model for African regional integration. However, the Community ran into serious political and economic difficulties and broke up in July 1977. This article examines the main problems of regional integration with specific reference to the factors that led to the breakup of the EAC.
C. Emre Alper, Ms. Wenjie Chen, Mr. Jemma Dridi, Hervé Joly, and Mr. Fan Yang
and to establish residence in another EAC partnerstate ( Ogalo 2012 ) . 5 CM Protocol Articles 7, 13, and 14 stipulate that EAC citizens are guaranteed the right to reside in any partnerstate—along with their spouse, dependents, and children—for the purpose of living, visiting, touring, transit, education, training, and working. They also provide the right for citizens to establish their business in any partnerstate and pursue economic activities in accordance with the national laws of the partnerstate. This also includes self-employed persons who are free to
among the three countries at the official par value and for the exchange of currency notes without undue delay and at the official par value without exchange commission. In order to harmonize monetary policies, the governors of the central banks are required to meet at least four times a year. While providing for free bona fide current account payments between countries, and capital controls under specified conditions, the treaty provides for reciprocal credits up to defined limits should a partnerstate be in need of balance of payments assistance. Member countries
partnerstate unless the resident of the partnerstate is listed on a stock exchange in the partnerstate. 16 A “principal purpose test” offers a companion or alternative to a provision on LOB. Under this test, treaty benefits would be denied when it is reasonable to conclude that one of the principal purposes of an arrangement or transaction is to secure a benefit under a tax treaty – unless it is established that obtaining such benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of the tax treaty. The OECD