WHY RWANDA JOIN EAST AFRICAN COMMUNITY (EAC)? – COMPARATIVE ANALYSIS - Part 2

Rwanda, formally the Republic of Rwanda, is a landlocked nation in the Great Rift Valley of Central Africa, where the continents of Southeast Africa and the African Great Lakes meet. Rwanda is surrounded by Uganda, Tanzania, Burundi, and the Democratic Republic of the Congo and is situated a few degrees south of the Equator. 

Rwanda, officially the Republic of Rwanda, Hutus and the Tutsis, are the two main tribes in Rwanda. The 1994 Genocide in which the Hutus turned against the Tutsis was experienced by the nation. 

Paul Kagame is the head of the military government that controls it. By ratifying the Treaty, it joined the EAC in 2007.

It is recognized as the most environmentally friendly nation and has one of the fastest-growing economies in all of Africa. According to World Bank analysis, 13.4 people are living in Rwanda as of 2021.

Due to border issues and cross-border communities, it has had some diplomatic challenges with Burundi and the DRC.

It has also come under fire for allegedly supporting rebel groups fighting to control natural resources in Burundi and the DRC.

It is a landlocked country without access to the sea. Its official languages are French, English, and Kiswahili; Kinyarwanda is its native tongue. Each presidential term is for seven years, and there are no term restrictions.

Official statistics from the World Bank indicate that Rwanda's Gross Domestic Product (GDP) was worth 11.07 billion US dollars in 2021. Less than 0.01 per cent of the global economy is represented by Rwanda's GDP.

WHY DOES RWANDA WANT THE EAST AFRICAN COMMUNITY (EAC)?

1) TRADE FACILITATION

International commerce is reliant on the passage of imports and exports through her neighbouring states due to her landlocked status, and the goods are vulnerable to non-tariff obstacles.

Comparing this to direct shipping of the same items, it is 41% less expensive. Its degree of competitiveness in the global markets is lowered by the direct transportation of its exports and imports. 

The East African Community is leading the way in huge infrastructure development, as well as other important economic areas like energy. Rwanda will gain economically from this by becoming more competitive in global commerce.

2) FOREIGN DIRECT INVESTMENTS

Due to the development of big markets and economies of scale, Foreign Direct Investment (FDI) flows frequently rise under the East African Community. There must be some economic liberalization, macroeconomic stability, functional infrastructure, strong governance, etc. for a region and specific nations to draw larger amounts of FDI.

Rwanda is well-positioned to be a preferred location for foreign investments targeting the EAC market since it is an emerging tiger in the region and the continent as a whole.

3) IMPROVEMENT OF THE WELFARE OF THE POPULATION

The goal of Rwanda's two ambitious projects, Vision 2020 and Economic Development and Poverty reduction strategy, is to elevate the nation to middle-income status by 2020. Six pillars and three cross-cutting areas have been identified as the priority areas for achieving the objectives of Vision 2020.

The pillars are good governance and a capable state, human resource development and a knowledge-based economy, a private sector-led economy, the development of infrastructure, productive and market-oriented agriculture, and regional and international economic integration.

Gender equality, environmental conservation, sustainable resource exploitation, and science and technology, particularly Information technology, are areas that cut across all of these other issues.

The East African Community provides good opportunities for achieving Rwanda's aspirations for development and raising population welfare. Customers have fewer options for products and services and must pay more in a narrow, tightly regulated market.

The population's welfare will increase as a result of joining the East African community because consumers will have access to more affordable and higher-quality goods and services as a result of the diversity of supply sources.

4) IMPROVING ECONOMIC INNOVATION THROUGH INCREASED COMPETITION

The small market in Rwanda does not stimulate creative behaviour on the part of its company executives because of the lack of competition. To survive and flourish, Rwandan firms will need to become more inventive.

To achieve this, they will need to recognize and capitalize on Rwanda's competitive edge in the area. An expanded and open regional market in East Africa will enhance commercial rivalry.

 5) COOPERATION IN THE DEVELOPMENT OF CRITICAL INFRASTRUCTURE

The majority of infrastructure projects are out of the reach of individual governments, hence collaborative efforts within regional integration are the apparent solution to this issue.

Being a landlocked nation, Rwanda would gain from regional infrastructure projects like roads, railroads, air transport, pipelines, etc. that are required to reduce the costs associated with conducting international commerce due to Rwanda's reliance on the seaports of Mombasa and Dares Salaam.

Additionally, due to their greater economies of scale, international donors and investors increasingly favour projects involving many nations.

6) FREE MOVEMENT OF FACTORS OF PRODUCTION

The relevant provisions of the EAC Common Market Protocol on Free Movements will allow the economies and consumers of member states to benefit from their competitive advantages regarding the free movement of factors of production, i.e. capital, labour, goods, and services, and associated rights of establishment and residence.

 

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