A joint policy to encourage mutually beneficial motor vehicle manufacturing is being developed by players in the automobile sectors from the East African Community and the Southern African Customs Union. This development follows the near conclusion of the tripartite free trade area (TFTA) tariff negotiations launched more than four years ago.
The dispute between the two economic blocs was over the contentious 25 percent import duty under the tripartite free trade area (TFTA). However, now both the sides have agreed that import duty on some motor vehicle parts will be abolished within the first five years of the TFTA, and others will enter duty-free as provided under the EAC CET. The decision restricts a massive influx of motor vehicles from South Africa into the EAC region once the more than 700 million-people TFTA comes into force. The estimated number of vehicles imported into East Africa each year is around 250,000 and expected to reach 500,000 by 2030.
