Tanzania’s signing of the host agreement for the East African Crude Oil Pipeline (Eacop) was great news for the business segment of the East African economy.
For ordinary people, however, a more meaningful story could have been confirmation that Tanzania had finally joined the East African Network Area, a regional initiative that harmonized and reduced roaming charges for subscribers to telephone networks in the region. .
Both events represent important developments for the region. Rather expected, the signing by Tanzania of the host Eacop agreement puts the final elements in place to unblock the Ugandan oil sector. Less expected, Tanzania’s activation of the Single Network Zone (ONA) reduces cost and facilitates near-transparent communication for citizens of five of the six member states of the regional bloc.
Initially launched as an initiative of the member countries of the Northern Corridor, ONA is almost magical from the user’s point of view. In addition to locking in the roaming rate at just $ 0.1 in 2015, without having to do anything on their phones, subscribers can take advantage of value-added services like mobile money at no additional cost. In real terms, the roaming tariff has since fallen because it has not been adjusted to compensate for the depreciation of the currency.
Coupled with the acceptance of national identity cards as travel documents across national borders, ONA has unexpectedly opened up the regional economy.
On rural Uganda’s roads, it’s not uncommon to see a Kenyan truck driver looking for a man frantically waving a phone near a pile of pumpkins or sacks of corn. Thanks to affordable telecommunications services, producers and consumers now benefit from fairer prices for agricultural products. Tanzania’s arrival on board deepens this process and promises even more gains to farmers.
Although Dar announced plans to join the network in January, credit still goes to President Samia Suluhu for finally getting things done. Tanzania commits more than six years after Kenya, Rwanda and Uganda dared the unknown. This translates into six years of lost opportunity and deferred benefits for citizens.
President Samia must now go the extra mile and open up Tanzania to regional travel by accepting national IDs as travel documents. This will not only be a boon for regional tourism, but an imperative if citizens are to benefit from the free movement of labor and other factors.
There are beneficial lessons from the ONA agreement that should inform policy. The initiative took a lagged path to implementation due to the mismatch in tax policies in the telecommunications sector. Until these were converged, differences in domestic tariffs created a situation which encouraged revenue leakage due to the illegal termination of international traffic. Uganda was – and still is – a victim of the practice called Sim-boxing, as it still has higher domestic tariffs than its neighbors.
Regional integration has often been hampered by fear of the unknown. ONA has shown that even where the risks are real, they are not insurmountable. Tanzania’s experience will not be without shocks. As a first step, telecom operators in Dar will see a drop in revenues from roaming tariffs. But this will only be transient and will correct itself as user volumes increase.
As Tanzania crosses the proverbial Rubicon, attention now turns to Burundi, who is now the only man out of step.