Writes Leo Odera Omolo
BUSINESSES and governments in Eastern African region will continue to paying hefty perks to hire and retain key professionals, as scarcity of skills and strict entry conduct and regulations continued to have hurt labor movement, a new World Bank survey shows.
The findings run against expectation that the signing of the EAC Common Market Protocol- that should have seen thousands of skilled lawyers, engineers and accountants seek employment in the region would ease the talent war and slow down the compensation race in the East African Community labor market.
The survey shows foreign professionals constitute less than 10 per cent in any of the EAC countries, even as most of the nations suffer huge deficits. There is only relative abundance of professional in Kenya and scarcity in Rwanda, Zambia, Malawi, Uganda and Tanzania.
Although professionals in Eastern Africa receive low nominal wages relative to their counterparts in developing countries, once their wages are adjusted for purchasing power, professional in Uganda and Kenya are comparatively well paid reflecting the demand for their services.
However, in legal services the very high wage earned by professionals are not necessarily indicative of their scarcity ,but rather of the power of professional bodies which impose strict entry and conduct regulations says the report entitled,” De-fragmenting Africa; Deepening Regional Trade Integration in Goods and Services.”
“Regulations affecting operation of legal and engineering providers including restrictions on prices and fees, advertising, form of business and inter-professional cooperation, are particularly heavy when compared with those in emerging economies,” says the report just released.
It shows that the restrictions imposed on accounting firms are even more stringent, with branches of foreign firms being prohibited in Kenya, Uganda and even the more liberal Rwanda.
Kenya and Tanzania also prohibit ownership or control of foreign accounting and auditing firms by non-locally licensed professionals.
The lack of intra-East African foreign firms participation is because each member states of the EAC grants exclusive rights to contain professionals over certain activities, “said a Kenyan director of the EAC Economic Affairs Richard Sindiga.
The World Bank wants policy makers in Eastern Africa and the continent as a whole to do more to cut down the trade barriers within Africa or it will suffer on the on-going world economic recession.
“It is clear that Africa is not reaching its potential for regional trade, despite the fact that its benefits are enormous.”
Meanwhile tension is high in most of the border posts connecting Kenya and its neighboring Tanzania following the boycott by track drivers and other users of motor vehicle after Tanzanian authorities had unilaterally raised the border crossing fees to USD 200 {Kshs 16,000}
The issue had temporarily raised the political temperature of the region and caused a long pile up of vehicles at the border crossing points, mostly at Taveta, Namanga and Sirare.
It affected the vehicles plying the Voi-Taveta –Moshi route in the Coast Province, and also the Namanga border crossing, which is close to the Kenyan capital City of Nairobi and Sirare border post located in the far southern end of Nyanza Province.
Traders complained bitterly that the move by Tanzania was against the EAC Common Market Protocol signed last July to speed up free movement of goods and persons across the common borders of member states.
On Tuesday, however, an immigration officer working o the Kenyan side of the border at Taveta told he media hat the matter has been resolved after discussions with their Tanzanian counterparts and that its details would be announced soon. The Tanzanian officials, however, were tight lipped and maintain a total silent, only telling this writer to contact Dar Es Salaam for such comments.
Kenyan traders operating at the border post said many Tanzanian were operating their businesses on the Kenyan side of the border without work permit.
“We want to know why Kenyans who wants to do any business in Tanzania have to obtain permits, whereas traders fro Tanzania operates in Kenya freely without any interference”, said a Kenyan trader at Taveta.
Ends