The Effects of East Africa Community Common Market Protocol on Cross Border Traders at Malaba Border in Kenya

Abstract

Transactions of commercial nature across national borders of at least two countries have taken a center stage in the business world. Nations require innovation and continuous technological advancement to cope with challenges of competition due to globalization. The implementation of EAC Common market protocol and the difference in levels of economic development has led to relative difference in price of goods and service, availability and movement of factors of production, change of demand of goods and service, and effect of differential applications of tax administration procedure and level of development are the factors which affect business climate index. The objective of this study was to assess the Effect of East Africa Community Common market protocol on Malaba cross border traders in Kenya. It adopted a cross sectional design in form of a survey which focused on Malaba Border in Kenya side involving a small number of respondent. The study targeted a population of 34 Customs department officers, 26 customs brokers and 100 small scale traders. From these, a sample of 32 respondents was selected and issued with questionnaires which were the data collection tools used. A response rate of 94% was achieved. The data collected was analyzed through the use of SPSS software and results presented in table and figure form where appropriate. The study findings revealed that implementation of the EAC common market protocol has greatly affected the business operations on cross border traders at Malaba Border in Kenya for majority of traders directly or indirectly involved in processing and clearance of goods. First ,implementation has drastically reduced the time to obtain construction permit and opening of business across the border . Secondly, The concept of SCT has not only greatly improved the delivery time of the cargo to destination but also greatly reduced the dumping of consignment of trade goods on transfer to other partner state. Further the benefit of tax harmonization procedure and elimination of Nontariff barriers had not been fully achieved which the majority of the traders perceived not only as the source of unfair competition on cross border trade but also an element which reduce the demand for intra trade. Most of the small scale business operators were unaware of the implementation process and the existing and unexploited opportunity of wholesale trading and existing market share in Uganda side. The study therefore recommends the need for Malaba Traders to be sensitized to create awareness so as to exploit the opportunities which come along with the implementation of the EACM protocol. There is also need for Political will and commitment towards successful implementation of investment reforms programs directed towards infrastructure, health, Education so improve the living standards reduce poverty level and make Malaba border competitive location for investments.