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Dec. 8, 2006 EAC Adds Burundi and Rwanda Rwanda and Burundi's joining of the East African Community is receiving praise, and is expected to expand the regional market. The East African Business council, the apex body of business associations in East Africa, said the expanded body would command a larger market. Speaking in Nairobi after holding its last executive committee meeting this year, the board chairman, Mr Abid Alam estimated a market base of 106 million from 90 million consumers. On complaints that the two economies - that joined the bloc last week - were fragile and stood to lose to more established members, Alam said the integration was a gradual process that will include addressing the fears. The council's vice-chairman, Mr Devani Arun said once all members are integrated into the bloc, there would be increased competition, resulting in high quality products and lower production costs to benefit consumers. "The recognition of the council by the EAC will give it 'more teeth' to be involved in the formulation of policies and decision making at the EAC and reinforce its position as the voice of the private sector in the region," said Alam. Meanwhile, industrialists in Rwanda on Wednesday expressed fears they would be pushed out of business by cheaper products from the group's custom union. The EAC's customs union, which groups Kenya, Uganda, Tanzania, Rwanda and Burundi, will open up borders for the duty-free trade of some goods in the region. The manufacturers cited transport, taxes and the cost of raw materials as the main hindrance to a level playing field. "Our biggest problem is the cost of transporting raw materials from either Mombasa or Dar es Salaam, it's simply too high," Mr Hariharan Dharmarajan, the director general of Sulfo Industries, told Reuters. "This, coupled with some unfair duties inevitably pushes our prices higher than those in the three countries." Tiny, landlocked Rwanda uses ports in Kenya and Tanzania to import materials. High energy, water and transport costs will also work against Rwanda's only brewery, Bralirwa, as it gets exposed to competition from the bigger players in the region, the head of the brewery said. "We can compete on quality but not on price," Bralirwa's Managing Director, Door Plantenga said, "The cost of electricity, water is twice as much as theirs; taxes are higher compared to theirs. How do you compete with such a person?" |
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