EAC secures €39.8 million German funding to boost trade and small businesses

The agreement comes as the regional bloc begins implementing its Seventh Development Strategy, which places greater emphasis on trade, investment, private-sector development and economic integration.

The EAC delegation was led by Secretary General Ambassador Stephen Mbundi, while the German delegation was headed by Head of the Central and East Africa Division at the German Federal Ministry for Economic Cooperation and Development (BMZ), Joachim Schmitt.

Speaking during a bilateral meeting with the German delegation, EAC Secretary General Ambassador Stephen Mbundi thanked Germany for its continued support, saying the partnership had played a significant role in advancing the region’s integration agenda.

“Germany is a longstanding partner of the EAC. We appreciate Germany’s continued confidence in the EAC and its commitment to supporting regional integration, trade and sustainable development,” he said.

EAC Deputy Secretary General in charge of Customs, Trade and Monetary Affairs, Annette Ssemuwemba, said the renewed cooperation had come at a critical time as the Community embarks on implementing its Seventh Development Strategy.

She said the negotiations provided an opportunity for the two sides to review regional priorities and identify areas where German support could have a direct impact.

“As we look towards implementing the Seventh EAC Development Strategy, renewing our cooperation with Germany is critical,” Ms Ssemuwemba said.

A key component of the funding will be improving access to finance for micro, small and medium-sized enterprises (MSMEs) through a partnership between German development bank KfW and the East African Development Bank (EADB).

Ms Ssemuwemba said MSMEs were among the main drivers of employment and economic activity across the region, particularly in manufacturing, agriculture, tourism and innovation.

She said the financing would help tackle one of the major challenges facing small businesses, limited access to affordable and suitable financial services.

Focus on trade and investment

Germany said East Africa’s expanding intra-regional trade and growing participation in the African Continental Free Trade Area (AfCFTA) presented significant opportunities for investment and regional value-chain development.

Head of the Central and East Africa Division at the German Federal Ministry for Economic Cooperation and Development, Joachim Schmitt, said intra-EAC trade had increased by 14 per cent, describing the region as an increasingly attractive destination for German and European investors.

“East Africa is the fastest-growing region with a 14 per cent increase in intra-EAC trade,” he said.

Mr Schmitt said the region’s expanding markets and value chains were creating opportunities for German and European businesses to increase their engagement in East Africa.

“With our cooperation, we want to support rules-based trade integration, regional economic development and deepen private-sector engagement,” he said.

The EAC and Germany also agreed to strengthen support for the Invest.EastAfrica! German-East Africa Business and Investment Forum, an initiative involving the EAC Secretariat, the State of Hesse, the East African Business Council and German business organisations.

The forum is expected to provide a platform for strengthening trade, investment and business ties between East Africa and Germany.

The two sides also welcomed preparations for upcoming negotiations between the European Union and the EAC on a joint Economic Partnership Agreement.

They said a forward-looking and sustainable agreement could create new opportunities for businesses and consumers while strengthening market access and trade relations between the two regions.