PRESENTATION AT LEARNING EVENT ON TRADE AND REGULATIONS IN SERVICES IN AFRICA
THE EXPERIENCE OF EAC ON ACCOUNTANTS MRA AND ITSIMPLEMENTATION
SHERATON ADDIS ABABA, ETHIOPIA
FREDRICK RIAGAICPAK
PRESENTATION AT LEARNING EVENT ON TRADE AND REGULATIONS IN SERVICES IN AFRICA
THE EXPERIENCE OF EAC ON ACCOUNTANTS MRA AND ITSIMPLEMENTATION
SHERATON ADDIS ABABA, ETHIOPIA
FREDRICK RIAGAICPAK
Credibility . Professionalism . AccountAbility
Presentation Outline
• Background in the Context of the EAC integration• The Impetus and Key Success Factors• Challenges to Implementation• The Missed Steps - Lessons• Conclusion
Credibility . Professionalism . AccountAbility
Background – Context of EAC
The EAC comprise Kenya, Tanzania, Uganda Rwanda and Burundi
Total Area : 1.8 million sq. km.Population: 135.4 millionGDP per Capita: US$ 732
Credibility . Professionalism . AccountAbility
Population of Reg. AccountantsKenya : 10,900Tanzania: 4,500Uganda: 1600Rwanda: 200Burundi: 100
Per capita numbers?
EAC Integration Process
Credibility . Professionalism . AccountAbility
• Are we moving too fast… what critical lessons from the EU?
CUSTOMS UNION
COMMON MARKET
MONETARYUNION
POLITICALFEDERATION
2005 – June 2010; July 2010 – 2012; 2012 – onwards; Ultimate
the Impetus and Key Success Factors
Credibility . Professionalism . AccountAbility
• CMP took effect in July 2010
• Initial Mutual Recognition Agreement (MRA) signed in May 2009 between Kenya, Tanzania and Rwanda; was it EAC driven?
• East Africa Community Institutes of Accountants (EACIA) MRA signed September 2011:
• creates East Africa Institutes of Accountants - ICPAK, NBAA, ICPAR, ICPAU and OPC ;
• formally registered with the EAC Secretariat and at advanced stage of adoption under the EAC structures;
The Impetus
Credibility . Professionalism . AccountAbility
Why the EACIA MRA?
• Remaining true to the CM Protocol – Art 11 of the CMP
• offer business support to cross-border trade in the EAC through a regional pool of professional business advisors and accounting professionals;
• develop the accountancy profession in the EAC region in accordance with IFAC SMOs;
Key Success Factors
•The desire to collaborate – at least prior to signing of the MRA;
•Engage on the basis of negotiations, the initial MRA between Kenya, Tanzania and Rwanda; •Openness for additional members – Uganda and Burundi coming through the revision of the MRA in September 2011;
Key Success Factors – cont’d
•Critiques from stakeholders such as the World Bank and the EAC Secretariat served to improve on the final MRA;
• Acceptance that PAOs not at the same level of development and hence operationalize an all-inclusive structure;
•Adoption of informal twinning arrangements to foster the development of the emerging PAOs – Rwanda and Burundi.
Challenges to Effective Implementation
• Existence of explicit trade barriers:
• Slow pace of harmonization of labour and immigration laws resulting in explicit trade barriers – work permits requirements; • Nationality requirements – Burundi Mode 3 unbound unless 1/3 of
capital owned by locals… referrals by locals in the case of Tanzania.
• Incomplete commitments – Kenya and Tanzania have not committed to opening up taxation facet of accountancy. •Varied timelines for liberalization
•General apathy on the side of accountants… is it the fear of the unknown?
Missed Steps
• Failure to undertake situation analyses and gap analysis prior to engaging;
• Non-involvement of EAC Secretariat – slowed the process adoption of the MRA document as a community legal binding doc;
• Linking access to market under Mode 4 to Schedule of Free Movement of Workers.
Lessons from the EACIA Experience
• Appreciate the different levels of development of the individual members and turn that into a unifying factor;
• Prioritize review of the various legal frameworks – the greatest enabler;
• Embrace partnership between govern and private sector;
• Awareness creation among the critical stakeholders:
• among the professional accountants• Government agencies playing the regulatory roles of some sort.
“A society grows great when old men plant trees whose shade they know they shall never sit in” – a Greek Proverb
Thank You!!
“A society grows great when old men plant trees whose shade they know they shall never sit in” – a Greek Proverb
Thank You!!
Credibility . Professionalism . AccountAbility
