East African CommunityWT/TPR/G/271
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World Trade
Organization / RESTRICTED
WT/TPR/G/271
17 October 2012
(12-5584)
Trade Policy Review Body / Original: English/French
TRADE POLICY REVIEW
Reports by
the East African Community
MEMBERS
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statements by the East African Community (EAC) members are attached.

Note:These reports are subject to restricted circulation and press embargo until the end of the firstsession of the meeting of the Trade Policy Review Body on the East African Community.

East African CommunityWT/TPR/G/271
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CONTENTS

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REPORT BY BURUNDI

I.INTRODUCTION7

II.KEY DEVELOPMENTS IN BURUNDI8

(1)Institutional Developments8

(2)Key Developments in the Domestic Market and
General Government Policy9

(3)Elaboration and Implementation of Investment Policy12

(4)Recent Economic Performance and Future Challenges13

III.BURUNDI'S TRADE POLICY OBJECTIVES17

(1)Introduction17

(2)Burundi and the WTO18

(3)Sectoral Trade Polices19

(4)Bilateral and Regional Trade Relations24

IV.TRADE POLICY PROSPECTS25

V.TECHNICAL ASSISTANCE AND CAPACITY BUILDING26

REport by kenya

I.BACKGROUND27

II.ECONOMIC PERFORMANCE27

(1)Macroeconomic Performance27

(2)Macroeconomic Outlook28

III.SECTOR SPECIFIC PERFORMANCE28

(1)Agriculture, Livestock and Fisheries Sector28

(2)Manufacturing29

(3)Mining29

(4)Services Sectors29

(i)Tourism29

(ii)Building and construction30

(iii)Information and communication technology30

(iv)Energy31

(v)Financial services31

(vi)Transport services32

IV.PUBLIC EXPENDITURE MANAGEMENT33

V.INVESTMENT REGIME33

(1)Foreign Direct Investment (FDI)34

(2)Licensing Reforms35

VI.TRADE PERFORMANCE36

(1)Domestic36

(2)Foreign36

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VII.TRADE POLICY REGIME37

(1)National and Industrial Trade Policy37

(2)Trade Facilitation37

(3)Competition Policy38

(4)Government Procurement38

(5)Privatization39

(6)Development in Standard's Area39

(7)Intellectual Property Right and Enforcement41

VIII.REGIONAL AND BILATERAL TRADE AGREEMENTS42

(1)East African Community (EAC)42

(2)Common Market for Eastern and Southern Africa (COMESA)42

(3)Tripartite42

(4)EACEUEPA Negotiations43

(5)African Growth and Opportunities Act (AGOA)43

(6)Multilateral Negotiations in the WTO43

(7)Bilateral Trade Agreements44

IX.PRIVATE SECTORDEVELOPMENT STRATEGY (PSDS)44

REPORT BY RWANDA

I.INTRODUCTION46

II.MacroECONOMIC envirOnment46

2.1Economic Performance46

2.2Sectoral Performance and Outlook47

2.2.1Agriculture47

2.2.2Industry49

2.2.3Services51

III.trade policies and practices52

3.1Trade Policy Objectives52

3.2Import and Tariff Regime53

3.3Export Policy54

3.4Investment Regimes54

3.5Sanitary and Phystosanitary (SPS) Measures55

3.6Intellectual Property Rights (IPRs)55

IV.TRADING ARRANGEMENTS55

4.1Bilateral and Regional Trading Agreements56

4.1.1East African Community (EAC)56

4.1.2Common Market for Eastern and Southern Africa (COMESA)56

4.1.3The COMESA-EAC-SADC Tripartite Free Trade Area (TFTA)56

4.1.4Economic Community of the Great Lakes Countries (CEPGL)57

4.1.5European Union-East African Economic Partnership Agreement57

4.2Multilateral Commitments57

4.2.1World Trade Organization (WTO)57

4.3Aid for Trade58

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REPORT BY TANZANIA

I.INTRODUCTION59

II.MACROECONOMIC DEVELOPMENTS59

(i)GDP Performance59

(ii)Inflation Development60

(iii)National Debt Developments61

(iv)Fiscal Performance61

(v)Balance of Payments61

(vi)Exchange Rate61

(vii)Employment62

(viii)Economic Outlook62

III.MEDIUM TERM POLICY FRAMEWORK62

IV.TRADE RELATIONS63

(i)East African Community63

(ii)Southern Africa Development Community64

(iii)The World Trade Organization64

V.SECTOR DEVELOPMENT65

(i)Services Sector65

(ii)Agriculture Sector66

(a)Crops66

(b)Livestock68

(c)Forestry69

(iii)Industrial Sector69

(iv)SME Sector72

(v)The National SME Development Policy73

(vi)Energy and minerals73

(vii)Natural Resources and Tourism74

(a)Tourism74

(b)Wildlife75

(c)Forestry and beekeeping76

VI.CONCLUSION76

REPORT BY UGANDA

I.INTRODUCTION77

II.ECONOMIC OUTLOOK77

(1)Gross Domestic Product77

(2)Investment and Savings78

(3)Employment79

(4)Public Revenue79

III.SECTORAL PERFORMANCE79

(1)Agriculture79

(2)Services80

(3)Manufacturing80

IV.UGANDA'S TRADE POLICY81

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V.DIRECTION OF TRADE81

(1)Exports81

(2)Imports82

VI.TRADE POLICIES BY SECTOR82

(1)Services82

(2)Agriculture82

(3)Mining and Energy82

(4)Manufacturing Industry83

VII.UGANDA'S EXTERNAL TRADE RELATIONS83

(1)Regional Trade Relations83

(2)Bilateral Trade Relations83

(3)Unilateral Trade Relations84

(4)Multilateral Trade Relations-WTO84

VIII.CONCLUSION84

East African CommunityWT/TPR/G/271
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REPORT BY BURUNDI

I.INTRODUCTION

  1. The Republic of Burundi is a landlocked country wedged between Central and East Africa. Burundi joined the World Trade Organization (WTO) in July1995, after having become a Contracting Party to the GATT in 1962. The Government of Burundi recognizes the pivotal role played by the WTO in the management and protection of an open multilateral trading system, basedon rules designed to promote growth and development on a global scale. The monitoring ofnational trade policies through the Trade Policy Review Mechanism is an important feature of the WTO'swork, and transparency is a fundamental component of the efficiency of the multilateral trading system.
  2. The first Trade Policy Review of Burundi took place in 2003. The current review is therefore the second of its kind, but is marked particularly by the fact that it is being held jointly with the reviews of four other countries of the East African Community (EAC).[1] There have been a number of important developments since Burundi's first review in 2003, which continue to have implications for trade and traderelated policies.
  3. Burundi's new trade policy, as envisaged by the authorities for the coming years, is set out in several framework documents, including the document entitled "Burundi Vision 2025"[2]; the Growth and Poverty Reduction Strategy Paper (GPRSP II)[3]; the national agricultural strategy (20082018)[4]; the national trade and industrial development strategy[5]; and the national sustainable tourism development strategy.[6] At the same time, the national strategy for private sector development and the national regional integration strategy, which are currently being elaborated, will enhance the framework for future action by Burundi in the area of trade policy.
  4. Despite its landlocked status, Burundi is seeking to make trade an essential pillar of itsstrategy for development, employment promotion and poverty reduction. Between 2004 and2006,the cumulative share of trade in goods and services (exports and imports) in GDP rosefrom43.5per cent to 57.7per cent, an increase of 14per cent over the period. Trade in services alone, as a proportion of GDP, grew from 15.41per cent in 2004 to 29.26per cent in 2008.
  5. One of the main changes in Burundi's trade policy was its accession to the East African Community in July2007. Since then, Burundi has contributed to the work of the CommunitySecretariat, particularly in the context of the implementation of protocols for the creation ofthecustoms union and the common market, negotiations under the EconomicPartnershipAgreement(EPA) with the European Union (EU), and the SADCCOMESAEAC TripartiteAgreement. Apart from its participation in the various WTOagreements, Burundi is continuing its programme of trade liberalization on a bilateral and regional basis with a view to promoting trade and investment. According to the World Bank Doing Business index for 2012, Burundi climbed eight places in the ranking, from 177 in 2010 to 169 in 2012. Burundi is also ranked46 in the investor protection index and thus stands as one of the top ten reforming countries in the world.
  6. Burundi is seeking to fulfil all its trade policy goals while promoting improved social inclusion, economic growth and sustainable development. The purpose of this report is to provide a broad overview of the way in which Burundi's trade policy is formulated, as well as to highlight the country's current and future trade priorities.

II.KEY DEVELOPMENTS IN BURUNDI

(1)Institutional Developments

  1. This is the first time that Burundi is conducting its trade policy review jointly with other countries of the East African Community. Following the protracted sociopolitical crisis between1993 and 2003, and the return to stability in the aftermath of the signing of the Arusha Peace Agreement on 28August2000 and the holding of general elections in 2005, Burundi has established new democratic institutions.
  2. A new Constitution was adopted in February2005 and promulgated in accordance with LawNo.1/610 of 18March2005. The new Constitution provides for the restoration of a pluralistic democratic system and the rule of law, guarantees individual freedoms and recognizes the right of association, including the right to form political parties. Executive power is exercised by thePresident of the Republic, two VicePresidents of the Republic and the members of the Government. The first VicePresident is responsible for coordinating political and administrative affairs, while the second VicePresident has the task of economic and social coordination. At the provincial level, executive power is delegated to a governor responsible for coordinating provincial administrativeservices.
  3. Legislative power is exercised by the Parliament which comprises two chambers: theNational Assembly and the Senate. The Constitution also provides for a court of auditors (Article178).
  4. The President, H.E.MrPierre Nkurunziza, was elected in 2005 and reelected in 2010. Thefirst and second VicePresidents are MrThérence Sinunguruza and DrIr Gervais Rufyikiri, respectively.
  5. Information relating to Burundi's trade policy is contained in the basic law, particularly as regards questions of external control, ratification of international agreements, or the adoption of the State budget. Burundian trade policy is mainly conducted by the Ministry which has trade as part ofits remit. Other Ministries contribute thereto in varying degrees, in particular the Ministries responsible for economic development planning, transport, mining and energy, and justice. Afterjoining the EAC, Burundi established a Ministry to oversee East African Community affairs, which is attached to the Office of the President of the Republic. The Ministry plays a vital role in coordinating the activities of this regional economic community.
  6. The tax administration was reformed in 2009 through the establishment of the Burundi Revenue Office (OBR), in accordance with Law No.1/11 of 14July2009. The law completely overhauled the organization of the tax and customs authorities and established an agency with a high degree of managerial autonomy, operating on the resultsbased management model, to replace the previous quasiministerial administrative authorities.
  7. An investment promotion agency (API) was established in 2009 by virtue of Decree No.100/177 of 19October2009. The API's main function is a general one of informing and assisting investors, in particular in obtaining documents and fulfilling the formalities provided for by the law. The agency is also responsible for devizing reforms needed to improve the business climate in Burundi and ensure sound implementation of the new Investment Code.[7]
  8. One noteworthy development in the private sector was the reform of the Burundi Chamber of Commerce and Industry (CCIB) in May2010, through the establishment of the Burundi Federal Chamber of Commerce and Industry (CFCIB). The new body's purpose is to initiate and support actions to improve the business climate and develop the private sector in Burundi. It groups together several privatesector professional organizations, which have been organized into 11 sectoral and twocrosssectoral chambers.
  9. A Government decree of June2008 introduced a framework for dialogue to promote publicprivate sector partnership. The framework has a standing Secretariat and is meant to serve as a platform for consultation and dialogue between authorities at the highest level in connection with privatesector development issues.
  10. Lastly, the State has stepped up its privatization programme by withdrawing from several key sectors of the economy, including coffee and finance in particular. The current Government has a Ministry responsible for good governance and privatization, which is directly answerable to the President of the Republic. The Ministry's task is to supervise and conduct the policy for privatization of Stateowned enterprises, and to introduce the necessary related structural and institutional reforms.

(2)Key Developments in the Domestic Market and General Government Policy

(a)The "Burundi 2025" vision
  1. In the aftermath of the sociopolitical crisis experienced by Burundi between 1993 and 2000, the authorities took a series of emergency measures to stem some of the most seriously adverse consequences. Thus, with a view to ensuring a longer strategic horizon for the consolidation of security and sociopolitical stability, sustainable economic growth and job promotion, food security and poverty reduction, the Government adopted its forwardlooking national study entitled "Burundi2025" in June2011.
  2. The "Burundi 2025" vision is a planning instrument for longterm economic and social development which will guide national policies in the area of sustainable development, with a view to satisfying the needs of present and future generations. The document relies on eight key pillars which will serve to ensure a clean break with the negative tendencies of the past.
  3. The first pillar concerns enhancing good governance and strengthening Government capabilities. The aim is to strengthen security, resolve past disputes and, at the same time, prevent new conflicts through the promotion of national reconciliation. Burundi also intends to strengthen the rule of law, Government capacities and the professional skills of the administration.
  4. The second pillar relates to the development of human capital. The State intends to offer quality social services in the areas of health and education.
  5. The third pillar concerns economic growth and poverty reduction. The authorities are aiming for accelerated doubledigit economic growth under the impetus of a diversified production sector that is competitive both internally and externally. Given the importance of agriculture to the Burundianeconomy and the fact that it is still in an undeveloped state, it is planned to modernize the sector and develop agribusiness. The national authorities are also anxious to develop sectors with high growth potential such as tourism, telecommunications and mining. Lastly, particular emphasis is placed on industrialization and privatesector development in Burundi over the next few years. Under this pillar, the "Burundi 2025" vision gives priority to economic infrastructures, including energy.
  6. The fourth pillar is based on the strengthening of regional integration and attracting gainsthereby. Apart from the EAC, Burundi is also a member of the Common Market for Eastern and Southern Africa, the Economic Community of the Great Lakes Countries (CEPGL) and the Economic Community of Central African States (ECCAS). The authorities plan to rationalize theircommitments visàvis these different communities by implementing appropriate reforms, andinparticular to make Burundian products competitive on the different regional markets. Thediversification of the export base and the development of the competitiveness of local business inBurundi are essential prerequisites for the success of the regional integration policy.
  7. Population control is the fifth pillar of the "Burundi 2025" vision. With a population growth rate estimated at 2.4 per cent per year in 2010, Burundi is well aware of the burden placed by its population on the success of future reforms. The authorities wish to ease demographic pressure and lower the population growth rate to 2 per cent by 2025. To this end, the Government will use awarenessraising measures to reduce the fertility rate among women.
  8. The sixth pillar entails "restoring social cohesion by giving renewed priority to basic culturalvalues". In Burundi's postconflict setting, the strengthening of social cohesion is essential to mobilizing and harnessing the energies of the population as a whole for the sake of a shared future and enhanced future prospects.
  9. The penultimate pillar concerns town and country planning. Burundi intends to introduce a largescale town planning policy that would produce benefits extending to the promotion of urban employment and improvement of the quality of basic social services and access thereto. It is planned to achieve an urbanization rate of 40 per cent by 2025, compared with barely 10per cent in 2010.
  10. The eighth and final pillar relates to the strengthening of international partnership. Burundi is seeking to create synergies between different development partners and to promote a framework for dialogue in the development planning process and in the financing and implementation of the "Burundi 2025" vision.
(b)The growth and poverty reduction strategy paper (GPRSP)
  1. Deriving inspiration from the "Burundi 2025" vision, the Burundi Government adopted itsfirst growth and poverty reduction strategy paper (GPRSP I) in September2006. Following an evaluation, this document was updated in January2012 (GPRSP II). GPRSP II is aimed at creating an environment conducive to sustainable development in Burundi with a view to achieving the Millennium Development Goals (MDGs) and the "Burundi 2025" vision.
  2. Implementation of GPRSP I has produced encouraging results in the areas of security, governance, development of human capital and access to basic social services. However, there has been no improvement on the poverty front given the weakness of economic growth, caused mainly by poor performance in the agricultural sector, which has a very narrow export base, low levels of investment and a weak private sector. In addition, implementation of GPRSP I has enabled Burundi to reach the completion point under the Heavily Indebted Poor Countries (HIPC) initiative of the IMFand thus to obtain substantial debt relief visàvis its international creditors.
  3. In the face of the numerous challenges that remain to be addressed for the sake of harmonious development in Burundi, four strategic priorities have been adopted under GPRSP II: strengthening of the rule of law; consolidation of good governance and promotion of gender equality; transformation of the Burundian economy to promote sustained growth with job creation; improvement of accessibility and quality of basic social services and strengthening of the social welfare base; and lastly, land and environmental management for sustainable development.
(c)Burundi's accession to the East African Community (EAC)
  1. The strengthening of regional trade integration is an essential pillar of the "Burundi 2025" vision. Following Burundi's accession to the EAC on 1July2007, and to its Customs Union, allinternal community tariffs were eliminated. Community rules of origin were introduced and the elimination of customs duties and taxes of equivalent effect on products originating in the EAC became effective in 2010. In practical terms, having already fully liberalized its trade with Rwanda and Kenya in the context of the COMESA free trade area, and having partially liberalized its trade with Uganda, Burundi additionally opened its market to the United Republic of Tanzania.
  2. Following accession to the EAC Customs Union, Burundi applies the three bands of the Common External Tariff (CET): 0per cent on raw materials and capital goods; 10per cent on intermediate goods; and 25per cent on finished goods. The EAC CET comprises 5,432 eightdigit lines under the Harmonized System (HS) nomenclature. The protocol provides for reviewing the highest tariff after fiveyears. In addition, higher rates ranging from 35per cent to 100per cent are applied to products deemed to be sensitive such as dairy products, wheat, rice, sugar, maize and cotton fabric. The protocol instituting the EAC Common Market, which entered into force for Burundi in July2010, also provides for the free movement of goods, persons and workers, the right of establishment, the right of residence and the free movement of services and capital.
  3. Burundi's customs legislation has consequently undergone a major transformation with the implementation of the EAC Customs Management Act, replacing LawNo.1/02 of 11January2007 on the Burundi customs code.
(d)Legal and regulatory framework
  1. Progress has been made on several fronts in Burundi since 2004 in terms of modernizing the legal and regulatory framework relating to trade policy. The main reforms that have been introduced concern the commercial code, LawNo.1/07 of 26April2010; the law on the competition lawregime, LawNo.1/06 of 25March2010; the Government procurement code, LawNo.1/01 of4February2008; the law on industrial property, LawNo.1/13 of 28July2009; the law establishing a code for private companies and companies in which the State has shares, LawNo.1/09 of 30May2011; and the law on bankruptcy and composition, LawNo.1/07 of 15March2006.