AMAZING THOUGH IT MAY sound, the East Africa Community is soon going to be in trouble again. It seems utterly incapable of deciding on the way forward, let alone creating a trading block. In consequence, there is an urgent need for new drivers.

Many Kenyan investors have been stunned by the recently published EAC Legal Notice No EAC/10/2007. This notice which reneges on the Protocol on the Establishment of the East African Community Customs Union's Common External Tariff (CET) of 25 per cent came into force on July 1, 2007.

The Legal Notice deals with motor vehicles for the transport of more than 25 persons. Item 11 of the Legal Notice reads: "Uganda stays application of CET rate of 25 per cent for one year and apply import duty rate of 10 per cent on the buses specifically imported for use during the Commonwealth meeting. Tanzania stays application of CET rate of 25 per cent on 2,400 buses imported for the Fast Bus Project."

What this notice is saying is that some bus operators in Uganda and Tanzania, the equivalent of KBS and Citi Hoppa in Nairobi, have been allowed to import buses from outside East Africa and will be subsidised by allowing them to pay import duty at a rate of 10 per cent instead of the agreed 25 per cent.

Now, this sad and double standard policy decision has raised three critical questions that need to be reviewed if EAC is to play a more effective role.

One, why are business people in Uganda being granted a concession to import an unspecified number of buses for a period of one year? The Commonwealth Heads of State meeting is scheduled for November this year, and only 50 buses are required which, thereafter, will be part of the fleet of 350 granted a monopoly to operate in Kampala.

Two, the Tanzanian Fast Bus Project is a viable business investment like any other which was computed when Tanzania's maximum duty rate was 40 per cent. Why does it require an import duty reduction now?

Three, buses assembled in Kenya are much cheaper. So, why do our neighbours prefer to import expensive buses and then demand a subsidy?

Kenya is the only country in East Africa with automotive assembly plants. It has three vehicle assembly plants: Associated Vehicle Assemblers in Mombasa, General Motors in Nairobi, and Kenya Vehicle Manufacturers in Thika.

These plants employ more than 15,000 people. And between them, there is enough capacity to cheaply offline vehicles and coaches for the entire East and Central African region.

While there is no doubt that the integration process of the EAC has potential to improve the prospects for economic growth, neo-patrimonialism is an albatross around our necks. This state of affairs was captured in the EAC briefing of February 2007 by David Booth, Diana Cammack, Thomas Kibua, Josephat Kweka and Nichodemus Ruderanhanwa.

In their publication, East African Integration: How Can it Contribute to East African Development?, they point out the dangers of neo-patrimonialism. "In neo-patrimonial systems," they say, the State has a bureaucratic (law and rule-governed) façade, but political motivations are mostly about short-term advantage and the dispensing of patronage."

The authors concluded that "from a trade-integration point of view, the literature suggests that the EAC is not a well-chosen unit. In the technical language used in this field, the three economies are neither very complementary nor very competitive."

The EAC, although an excellent concept, has failed in the past. Perhaps one of the most important tasks right now is to save the EAC from irrelevance.

For this to happen, we need to see people at the helm of EAC who have first-rate intellect and a sharp strategic sense -- leaders who are pragmatic rather than ideological.

Mr Kitau is the managing director, Bruce Trucks & Equipments (EA) Ltd