Leaders of the five-member East African Community bloc have signed a common market treaty to allow free trade.
The presidents of Burundi, Kenya, Rwanda, Tanzania and Uganda signed the East Africa Common Market Protocol, opening up a region of 126 million people for businesses and free movement of its residents.
‘This was a great step,’ Tanzanian President Jakaya Kikwete said after the signing.
‘We are going to move to other stages after this historic event.’
Investors lauded the decision, which they say will boost intra-regional trade that has remained inferior to exchange with external markets and regions.
The protocol is expected to come into force in July 2010 when the member states shall have ratifed it.
The bloc's Secretary General Juma Mwapachu said in a recent interview that the leaders had no option but to enter the common market.
However, efficiency of the common market will be hobbled by poor roads and railway network across the region.
The bloc only recently launched projects to link the member states with a railroad, notably landlocked Burundi and Rwanda.
First established in 1967, the EAC collapsed 10 years later due to differences in economic ideologies and political fall-out after the ouster of Uganda's first president Milton Obote.
It was resurrected when leaders of Kenya, Uganda and Tanzania agreed in November 1999 to create a European Union-style common market for their 90 million citizens to strengthen their economic and political clout.
Rwanda and Burundi joined the bloc in 2007, expanding its population to 126 million and a GDP of €40.4bn.
In 2005, the grouping established a customs union setting common tariffs for external goods. It is currently working to form a monetary union by 2012 and ultimately a political federation.
