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Thesis (MBA)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: The three East African countries of Kenya, Tanzania and Uganda have a long history of economic co-operation, which at one time amounted close to political integration. Their present co-operation arrangement is known as the East African Community (the new East African Community), but is one that remains susceptible to failure if conscious and purposeful steps are not timely adopted to facilitate their integration. A number of reasons have been attributed to the failure and eventual demise of the old East African Community. These reasons include, the unequal distribution of gains and costs amongst the partner states, perceptions and impressions on reaching conclusions about the distribution of those gains and costs, the heavy internal and external debt burdens that the three countries experienced in different degrees, differing political ideologies amongst the political leaderships of the three countries, unwillingness to cede government authority to the Community, and the absence of sufficient possibilities for cost reduction shifts in the industrial sector amongst the three countries. The above meant that there was little chance for potential economies of scale. While the recognition of the value of past experiences forms an important aspect of a future strategy for the Community, prevailing and anticipated circumstances are more relevant. This study project seeks to establish the chances for the success or failure of the new East African Community by means of an analysis of the historical passage of East African co-operation, in particular the former official arrangement of 1967-1977 and scrutiny of the system underlying the present arrangement. The differences and similarities of the two systems are then extrapolated and the likely effects that those differences and similarities will impart upon the new East African Community are investigated. Finally, the ways and means identified as a possible easing of the shortcomings are advanced as recommendations. One outstanding development in the existence of the new East African Community so far has been the pursuance to establish an East African Federation in the shortest possible timeframe. In the new East African Community's formative treaty the objective of achieving a political federation is declared to be the ultimate objective. It would appear that the concept of "shortest possible time" was partly interpreted by those mandated to explore the possibilities as relating to the timeframe during which the existing political leadership would still be functioning. The study has, however, concluded that the fast tracking of the political federation is one of the possible serious threats to the sustainability and longevity of the new East African Community. Likewise, membership of other regional integration arrangements by the partner states of the Community - without a concrete formally agreed common mechanism to deal with the ensuing conflicts of interest - is considered to be a weakness. The study recommends a number of preconditions necessary for the smooth transition to a political federation that would not compromise the positive prospects of the Community. / AFRIKAANSE OPSOMMING: Die drie Oos-Afrikalande Kenia, Tanzanië en Uganda het 'n lang geskiedenis van ekonomiese samewerking wat op 'n stadium feitlik op politieke integrasie neergekom het. Hulle huidige integrasiereëling staan as die Oos- Afrikagemeenskap (die Gemeenskap) bekend, maar dit bly vatbaar vir mislukking indien bewuste en doelgerigte stappe nie betyds gedoen word om hulle integrasie te bevorder nie. 'n Aantal redes is aangevoer vir die mislukking en uiteindelike verval van die ou Oos-Afrikagemeenskap. Hierdie redes sluit onder andere in die oneweredige verspreiding van winste en kostes tussen die vennootskapslande, persepsies en indrukke oor besluite rakende die verdeling van genoemde winste en kostes, die kwaai binne- en buitelandse skuldlaste wat die drie lande in wisselende mate ervaar het, verskillende politieke ideologieë tussen die politieke leierskappe van die drie lande, 'n onwilligheid om regeringsgesag na die Gemeenskap oor te dra en die afwesigheid van genoegsame moontlikhede vir kosteverminderingstappe in d ie nywerheidsektor tussen die drie lande. Die bovermelde het beteken dat daar min geleentheid vir potensiële groot ekonomieë was. Alhoewel die erkenning van die waarde van ervarings uit die verlede 'n belangrike aspek van 'n toekomstige strategie vir die Gemeenskap uitmaak, is heersende en verwagte omstandighede meer relevant. Hierdie studieprojek poog om by wyse van 'n analise van die historiese verloop van samewerking in Oos- Afrika en in die besonder van die vorige amptelike reëling tussen 1967 tot 1977 en 'n ondersoek van die stelsel wat die huidige reëling onderlê, vas te stel wat die kanse is op die sukses of mislukking van die nuwe Oos-Afrikagemeenskap. Die verskille en ooreenkomste tussen die twee stelsels word dan geëkstrapoleer en die verwagte gevolge wat daardie verskille en ooreenkomste op die nuwe Oos-Afrikagemeenskap gaan uitoefen, word ondersoek. Laastens word die middele wat geïdentifiseer is as 'n moontlike verligting van die tekortkominge, as aanbevelings voorgehou. Een van die opvallende ontwikkelings in die nuwe Oos-Afrikagemeenskap is die nastrewing van die doel om 'n Oos-Afrikafederasie binne die kortste moontlike tyd tot stand te bring. In die Gemeenskap se stigtingsooreenkoms is gekonstateer dat die uiteindelike doelwit die bereiking van 'n politieke federasie is. Dit wil voorkom asof die konsep "die kortste moontlike tyd" gedeeltelik só geïnterpreteer is dat dit na die tydsraamwerk verwys waartydens die huidige politieke leierskap steeds die leisels sou hou. Die studie het egter tot die gevolgtrekking gekom dat die vinnige pas vir die totstandkoming van die politieke federasie een van die moontlike ernstige bedreigings vir die volhoubaarheid en langdurige voortbestaan van die nuwe Oos-Afrikagemeenskap is. Op soortgelyke wyse word lidstate van die Gemeenskap se lidmaatskap van ander streeksreëlings - sonder die bestaan van 'n konkrete formeelooreengekome gesamentlike meganisme om aandag te skenk aan voortspruitende belangekonflikte - as 'n swakheid beskou. Die studie beveel 'n aantal voorwaardes aan wat noodsaaklik is vir die gladde oorgang na 'n politieke federasie wat nie die positiewe vooruitsigte van die Gemeenskap in die gedrang sal bring nie.

The process which culminated in the establishment of the East African Community (EAC) in 1967 started in the early 1920s. The idea was first conceived in Britain. Initially, East Africans vehemently opposed this idea fearing that it would sustain British hegemony in the region, but their resentment did not prevent the establishment of the East African High Commission (EAHC) in January 1948. It was only in the 1950s and 1960s that East African leaders embraced the idea due to political and economic reasons. In 1961 they converted the EAHC into the East African Common Services Organisation (EACSO) and in 1967 they established the EAC. Nationalism and sub-nationalisms in the region cast a spell on the EAC. The coup, which took place in Uganda in 1971, strained relations between Idi Amin and Presidents Nyerere and Kenyatta thus making it impossible to hold regional meetings. Eventually, the EAC collapsed in June 1977. / Political Science / M.A. (Politics)

This study empirically examines the impact of monetary policy on economic growth in three East African countries (Uganda, Kenya and Tanzania). The role of monetary policy in promoting economic growth remains empirically an open research question, as both the empirical and theoretical underpinnings are not universal, and the results remain varying, inconsistent, and inconclusive. This study may be the first of its kind to examine in detail the impact of monetary policy on economic growth in Uganda, Kenya and Tanzania – using the autoregressive distributed lag (ARDL) bounds-testing approach. This study used two proxies of monetary policy, namely, money supply and interest rate, to examine this linkage. The results were found to differ from country to country and over time. The Uganda empirical results reveal that money supply has a positive impact on economic growth, both in the short run and in the long run. However, interest rate was found to have a positive impact on economic growth only in the short run. In the long run, interest rate has no significant impact on economic growth. In Kenya, both short-run and long-run empirical results support monetary policy neutrality, implying that monetary policy has no effect on economic growth – both in the short run and in the long run. The results from Tanzania also reveal no impact of monetary policy on economic growth in the long run – irrespective of the proxy used to measure monetary policy. However, the short-run results only reveal no impact of monetary policy on economic growth only when the interest rate is used as a proxy for monetary policy. When money supply is used to measure monetary policy, a negative relationship between monetary policy and economic growth is found to dominate. Overall, the study finds that monetary policy is only relevant for economic growth in Uganda and only when money supply is used as monetary policy variable. Therefore this study recommends a money supply based monetary policy framework for Uganda. The study findings also suggest that monetary policy may not be a panacea for economic growth in Kenya and Tanzania. / Economics / M. Com. (Economics)

The process which culminated in the establishment of the East African Community (EAC) in 1967 started in the early 1920s. The idea was first conceived in Britain. Initially, East Africans vehemently opposed this idea fearing that it would sustain British hegemony in the region, but their resentment did not prevent the establishment of the East African High Commission (EAHC) in January 1948. It was only in the 1950s and 1960s that East African leaders embraced the idea due to political and economic reasons. In 1961 they converted the EAHC into the East African Common Services Organisation (EACSO) and in 1967 they established the EAC. Nationalism and sub-nationalisms in the region cast a spell on the EAC. The coup, which took place in Uganda in 1971, strained relations between Idi Amin and Presidents Nyerere and Kenyatta thus making it impossible to hold regional meetings. Eventually, the EAC collapsed in June 1977. / Political Science / M.A. (Politics)