Lobby urges EAC leaders to prepare joint recovery plan

Wednesday April 22 2020

EAC

A staff member of Matatu sprays disinfectant inside a minibus as a preventative measure of coronavirus in downtown Nairobi, Kenya, on March 16, 2020. PHOTO | YASUYOSHI CHIBA | AFP 

By The EastAfrican

Companies in the region are pushing for tax waivers on medical devices and food to cushion businesses as countries face an upsurge in Coronavirus cases.

The East African Business Council (EABC), a regional lobby for business and the private sector, said in a statement said that EAC member states should waive Customs duties and value added tax for medical devices and protective equipment from the region and other highly demanded goods in battling Covid-19.

The statement, issued at the end of the 76th Board Meeting of the EABC, said all six members of the EAC—Tanzania, Kenya, Uganda, Rwanda, Burundi and South Sudan —have been affected by the viral disease.

Private sector organisations from Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan also called for a common approach to businesses to safeguard the region’s jobs and exports.

EABC chief executive Peter Mathuki said: “Given the intrinsic nature and level of integration of the EAC, the impact of Covid-19 poses high risks at the regional level regarding the recovery of tourism, SMEs, and manufacturing business sectors hence there is an urgent need for a common approach on the preparedness, response measures and recovery strategy for the EAC region.”

“A common approach will safeguard current and future jobs, exports, businesses and offer quick economic recovery for the EAC bloc,” he added.

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The statement further says that EAC should ensure food security and supply of raw materials, enhance the supply of agricultural input and extension services to farmers, and promote agro-processing and urban farming.

The private sector has also called on governments to collaborate for increased production and ensure that raw materials and intermediate goods needed by industries flow across the EAC partner states, and to allow “free movement of East Africans across the partner states in line with the World Health Organisation guidelines.”

The EABC board meeting created a regional platform for the private sector to combat Covid-19 in the EAC region, the statement said.

“This platform is steadfast to take up regional business integration issues to the attention of EAC Heads of State, Council of Ministers and senior government officials in light of Covid-19 pandemic.”

It also urged the EAC heads of state to adopt a common approach to the preparedness, response measures and recovery strategy to curbing Covid-19 outbreak in the region and to come up with a common recovery strategy.

The EABC also appealed to EAC member states to regulate recurrent expenditures and focus on increasing budgetary allocation on health, social services and food security.

The common post-Covid-19 recovery strategy should focus on intra-EAC trade and investments; collaborate and share information on the short term and long-term impact of Covid-19; a liberal movement of air freight to boost horticulture exports to Europe, Asia and the US in light of the Covid-19 pandemic.

Already countries in the region have taken different economic measures to mitigate against Covid-19 lockdowns and border restrictions. Kenya, Uganda, and Rwanda have instituted tax relief options.

On Thursday, Kenya announced direct remittance of cash to needy homes.

Earlier, tax relief options targeting low income earners through cuts in Pay As You Earn, Value Added Tax, Turnover Tax and Corporate Tax had been announced.

Bank of Uganda announced exceptional liquidity assistance for one year to financial institutions and waived limitations on restructuring credit facilities of financial institutions that may be going into distress.

This is meant to strengthen the banking institutions to remain afloat as few borrowers will be able to pay back their loan obligations.

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