The perceived effect of East African community customs union on the food and beverage manufacturers in Kenya
Negotiations to set up a Customs Union for East African Countries namely Kenya, Tanzania and Uganda began in 2000 after the collapse of the original Community in 1977. The former Community collapsed mainly due to intra-community political differences and the growing feeling among the partner states that Kenya was overly benefiting from the shared and jointly owned services at their expense. Subsequent meetings of the three heads of states led to the signing of the East African Community Customs Union (EACCU) Protocol on March 2, 2004 in Nairobi Kenya. The Customs Union became effective on January 1, 2005. In Kenya the implementation of the Customs Union was met with mixed feelings among the manufacturers. Some firms were optimistic while others were pessimistic of the outcome. It is these conflicting views that led to the undertaking of this research project in order to investigate the perceived effects of the EACCU on the food and beverage manufacturers in Kenya. The objectives of the study were to assess Kenya's food and beverage manufacturers' level of awareness and knowledge of the EACCU protocol; to determine the level of satisfaction with the protocol and to assess the relationship between the levels of awareness/knowledge, and satisfaction with EACCU and organizational demographics of Kenya's food and beverage enterprises. The population of interest comprised all the 100 members -li.sted under Food and Beverage Sector of the Kenya Association of Manufacturers (KAM). A semi-structured selfadministered questionnaire was used to gather the data. Out of the 100 firms that were given the questionnaires 62 firms responded. The study established that although most of the company executives were aware of EACCU only arourid 11 percent were well versed with the protocol. Another approximately 60 percent were just knowledgeable while approximately 30 percent were not knowledgeable at all. The study also found that there was no strong correlation between level of awareness knowledge, and satisfaction with the EACCU protocol. Overall, the results of the study indicated that a majority of companies perceived EACCU positively. As may be expected, this study also had its limitations. It was limited to the food and beverage sector and the perceptions of the other manufacturing sectors may not necessarily be the same. The views of those who did not return the questionnaire (n=38) are also not known. In addition the current study focused on perceptions. The actual results after the implementation of the protocol may be different. Similar studies should therefore be conducted on the other manufacturing sectors so as to compare the results. Studies should also be carried out in the other sectors of the economy in order to enhance empirical knowledge of this important area of Kenya's socioeconomic fabric. The study has got implications to the food and beverage manufacturers, the government, KAM and the academicians. To the food and beverage sector it is now clear that the Customs Union is perceived positively by the manufacturers and therefore more investments are likely to be undertaken in this sector. To the government, it means that their negotiations towards the formulation of the protocol did not go in vain. More investments are likely to come in and of course more revenues and job opportunities created. To KAM, it has been revealed that only 11% of the sector thoroughly understands the protocol. Increased stakeholder education and sensitization need to be done to improve members understanding. To the academicians this should be a launching pad for further research on this dimension of the East African Community.