The East African Community officially held a “member states” inauguration for South Sudan, as its newest member joining the regional federation. His Excellencies President Salva Kiir Mayardit of the Republic of South Sudan was invited by Dr. John Pombe Joseph Magufuli, President of the United Republic of Tanzania and also the Chairperson of the East African Community Heads of State Summit to officially sign the Treaty of Accession of the Republic of South Sudan into the EAC today Friday 15th April 2016 in Dar es Salaam, Tanzania, making it the sixth official member.
The signing of the Treaty follows after the EAC member states met at the 17th Ordinary Summit held on 2nd March, 2016 in Arusha, Tanzania, the EAC Heads of State received the report of the Council of Ministers on the negotiations for the admission of the Republic of South Sudan into the Community and decided to admit the Republic of South Sudan as a new member. The main benefits for South Sudan of joining the EAC include:
- Hard infrastructure: Regional public goods to reduce trade costs
- Soft infrastructure to support growth: Policies favoring openness
- Factor mobility
- Access to new markets for trade Reaping these benefits will require that South Sudan undertake a series of policy reforms that would be in the country’s interests under any circumstance. Potential short-run costs of integration are harder to identify and could include dealing with:
- Increases in cost of some imported products
- Effects on government revenue
- Foreign Direct Investment
The discussion of these benefits and costs is difficult because South Sudan is a new country with very little available data. What is known is that South Sudan is a major oil producer in the region, and now can use the EAC to transport energy into the Indian Ocean. With the recent announcement of a South Corridor oil pipeline in the works, the accession of South Sudan will give the country an option to transport oil through East Africa.
What can be done is to illustrate potential benefits and costs drawing on other experiences and to point out the domestic reforms that South Sudan should undertake to maximise net benefits of EAC membership. These reforms and policy decisions are largely decisions that would, under normal circumstances, be in the country’s long-term interests.
Rwanda, which faced similar trade offs when negotiating its accession to the EAC in 2007. Like South Sudan, Rwanda is a landlocked country that has emerged from a devastating war in its recent past. Although there were some costs associated with joining the EAC, Rwanda went ahead and became an EAC member in 2007. Less than a decade later after joining the EAC, indicators suggest strong net benefits of EAC membership for the Rwandan economy, something similar expected for South Sudan.
Article written by Athanas Lupatu