EAST AFRICAN FEDERATION: FAST-TRACK OR EMPTY TALK?

C O N F I D E N T I A L SECTION 01 OF 02 DAR ES SALAAM 000731

SIPDIS

SIPDIS

DEPT FOR AF/E B YODER, C PELT, AF/EPS FOR T HASTINGS, AND
AF/RSA FOR J NAY
LONDON, PARIS FOR AFRICA WATCHERS
USTR FOR W JACKSON

E.O. 12958: DECL: 04/26/2011
TAGS: ENRG ECON ETRD PGOV TZ
SUBJECT: EAST AFRICAN FEDERATION: FAST-TRACK OR EMPTY TALK?


Classified By: Classified by Mary Johnson, Economic Counselor for reaso
n 1.4(d)


1. (C) SUMMARY. Economic convergence in the East African
Community (EAC) in on track, with a Customs Union expected to
be fully functional by 2010. To further strengthen the
region's economic ties, the EAC Secretariat also has hopes to
undertake major infrastructure projects in areas such as
energy and roads. While progress on economic harmonization
is clear, political integration remains a more delicate and
challenging subject for the EAC. Despite recent rhetoric
from various East African leaders about "fast-tracking" an
East African Federation (EAF),political integration is not
likely to move forward quickly in the near term. Given
deteriorating democratic systems in both Kenya and Uganda,
and the question of Rwanda and Burundi's accession to the
EAC, the Government of Tanzania (GOT) is cautious on
political federation. Even staff at the EAC Secretariat are
wary of an EAF, preferring cooperation in the cultural and
economic domains prior to coping with the enormous, if not
premature, challenges of political federation. END SUMMARY.

Economic Integration: Full Speed Ahead
--------------

3. (U) During a meeting with the Deputy Chief of Mission
(DCM) on April 25, Dr. Nyamajeje Weggoro, Head Economist for
Sectoral Policies and Programmes at the EAC, confirmed that
the EAC is on track to becoming an integrated Customs Union
by 2010. He explained that the protocol for the Customs
Union was signed (and became operational) in January 2006.
"Within four years, we expect the EAC to have established a
fully functioning Customs Union." Additional changes are in
the pipeline to further free the flow of people, goods and
services across borders, including the introduction of an
internationally accepted East African passport which would be
able to replace the national passport. Weggoro also made
reference to moving toward a common currency which all three
countries had attempted 10 years ago.


4. (U) In addition to removing trade barriers, the EAC has
also developed "Mega-Plans" for increasing East Africa's
power and road connections. At the upcoming United Nations
14th Commission on Sustainable Development, the EAC will
present its Master Power Plan to connect the national grids
of Kenya, Tanzania and Uganda. Weggoro stated that part of
the plan was to run a gas pipeline from Songo Songo to Tanga
to Mombassa and then over to Western Uganda (in parallel to
an oil pipeline already operating between Kenya and Uganda).
Despite Tanzania's current power problems, Weggoro said that
Tanzania has more energy resources than the other two
countries and once the plan is operational, Kenya would be a
net importer of electricity from Uganda and Tanzania. By
presenting their Master Power Plan at the UN Conference, the
EAC aims to involve the international community in
implementing such regional infrastructure projects.

Political Federation: A Pipe Dream?
--------------

5. (C) While plans are big and hopes are high for East
Africa's economic integration, political federation appears a
more complicated and distant prospect. In 2004, East
Africa's leaders established a Presidential Committee on Fast
Tracking East African Federation, and Kenya's Attorney
General, Amos Wako, who now heads the Committee, has set 2010
as an ideal date to start an East African Federation. A
special report in The Citizen (April 17),however, revealed
that EAC Secretariat staff and even members of the Committee
have raised doubts about such a deadline. According to The
Citizen, Committee members and other government officials
have anonymously characterized the time table for federation
as everything from "just hot air, to empty talk, to utter
rubbish." Off-the-record, Weggoro underscored this news
report and confided, "Fast-tracking can mean 30-40 years down
the road!" Weggoro stressed that focusing on political
federation would frustrate rather than enhance EAC
cooperation as member countries got bogged down trying to
resolve difficult political issues rather than building
economic and cultural bonds.


6. (C) The differing levels of democracy in the three
countries is one of the key challenges in terms of forging

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any time of East African political entity. Weggoro noted,
again off-the-record, that the EAC Secretariat had been
disappointed by political developments in the region. He
said that advice from the EAC Secretariat on how to best
achieve acceptable democratic systems has not been kindly
received, especially by Uganda. "We have been let down by
Kenya's political decay and Uganda's worrisome move toward
totalitarianism," Weggoro said. He added that at one time,
the EAC had looked toward Museveni as a potential
representative for an East African Federation; someone who
could have stepped down from power in Uganda and assumed a
leadership role for the EAC.


7. (C) While the reality of political union may be distant,
the EAC does have a vague notion of the model an East African
Federation might follow. "Right now we envision a small
government at the top with a President and maybe a Prime
Minister," Weggoro said. Under such an arrangement the
participating states might resemble Zanzibar in that each
would have its own parliament, ministries, and revenue
collection system, while the central government would handle
foreign relations. Additional details of the vision will be
disclosed when the President's Committee on Fast Tracking
reports its findings and road map for political integration
to the Heads of State in November 2006.

Rwanda and Burundi Eye the EAC
--------------

8. (C) Another challenging issue for political federation
is that both Rwanda and Burundi are seeking membership in the
EAC. Weggoro said that Rwanda and Burundi will be advised to
follow an accession model: observer status (2-5 years),
associate membership and then onto status as a full member.
The timeline for Rwanda and Burundi's accession to the EAC is
still not clear and Weggoro did not suggest that accession
was a foregone conclusion. Weggoro did note that the
original concept for political federation had been a small
union government with Heads of State rotating from Uganda,
Tanzania and Kenya. "The arrangement would probably be
different if Rwanda and Burundi entered the picture," Weggoro
told the DCM, implying that rotation might not be the best
option in the even that Rwanda and Burundi join the EAC.

Comment: First Things First: Getting the Economics Right
-------------- --------------

9. (C) Weggoro's off-the record comments underscored press
reports which have questioned both the probability and
feasibility of "fast-tracking" an East African Federation.
One of the longest serving economists for the EAC, Weggoro is
a champion of increasing EAC integration. His approach,
however, emphasizes the region's strong cultural and economic
ties before tackling the many challenges which would emerge
from political integration. "What is driving the EAC forward
is the belief that we are one country!" Weggoro exclaimed,
citing examples of Tanzanian and Kenyan brothers separated by
superficial borders. Weggoro moderated his exclamations
about the EAC as one country with his conviction to get the
sequencing of integration right: "Start with economic
convergence and cultural ties; this will force political
change over time."


10. (C) EAC caution on the political front seems wise,
especially given the relative states of democracy in
Tanzania, Kenya and Uganda. Most other regional integration
arrangements, such as in Europe, Latin America and elsewhere,
have started with private sector and economic harmonization
before diving into political federation. Strengthening East
Africa's economic and cultural foundation is most likely the
fastest track the EAC can pursue toward not only a common
market, but also, toward any viable political integration in
the future. End Comment.
RETZER