EAC trade jump 40 percent in Q2 2025 as exports rise

The sharp increase was driven by exceptional export performance, with exports jumping by 40.5 percent to $18.6 billion, reflecting strong global demand for EAC-produced goods. Imports rose more modestly by 18.8 percent to $19.6 billion.

As a result, the region’s trade deficit narrowed significantly, from $3.2 billion a year earlier to $0.9 billion in the second quarter of 2025, marking a notable improvement in the bloc’s external position.

Trade with other African countries expanded by 42.9 percent to $9.3 billion, now accounting for nearly a quarter of total EAC trade. Intra-EAC trade also strengthened, rising by 24.5 percent to $4.6 billion, equivalent to 12.1 percent of total trade.

The Community continued to deepen its commercial links with Common Market for Eastern and Southern Africa (Comesa) and Souther African Development Community (Sadc), which contributed 9.9 percent and 15.2 percent, respectively, to the region’s trade portfolio.

China, the UAE, South Africa, Hong Kong, and Singapore remained the dominant destinations for EAC exports, collectively absorbing 62.8 percent of total outbound shipments, up from 40.1 percent last year.

Malaysia and South Africa recorded the strongest quarter-on-quarter growth in demand for EAC goods.

High-value commodities continued to underpin export performance.

The top five, copper, precious stones and metals, coffee and tea, mineral fuels, and ores, accounted for 79.6 percent of total exports, reflecting growing specialisation in globally competitive products.

On the import side, China maintained its lead as the largest supplier, accounting for $4.7 billion or 24.2 percent of total imports. The UAE, India, South Africa, and Japan also remained key partners, jointly contributing more than half of the region’s import bill.

Petroleum products, machinery, vehicles, precious metals, plastics, and iron and steel dominated the list of imported items, signalling continued investment in infrastructure, energy, and manufacturing.

Despite the strong trade performance, inflationary pressures remained a challenge across the region. The EAC’s annual headline inflation stood at 22.7 percent in June 2025, slightly lower than May’s 24.0 percent but still far above the 13.7 percent recorded in June 2024.

The report attributed the elevated figure to steep price increases in South Sudan (179.4 percent) and Burundi (34.1 percent).

On average, headline inflation for the 2024/25 financial year rose to 23.0 percent, up sharply from 6.6 percent the previous year.

Core inflation, excluding food and energy, eased to 19.3 percent in June from 23.6 percent in May, though still well above the 15.0 percent recorded a year earlier, indicating persistent underlying price pressures.

Short-term interest rates rose in most EAC economies during the quarter, except in Kenya, where the 91-day Treasury bill rate dropped by 70 basis points to 8.2 percent. Uganda and Burundi recorded the highest rates at 11.2 percent and 8.6 percent, respectively.

Lending rates fell in Kenya and Tanzania but rose in Uganda, which saw an increase of 140 basis points.

Deposit rates remained largely stable, with Tanzania recording the only notable rise of 70 basis points.

South Sudan posted the widest interest rate spread at 13.7 percent, while Tanzania had the narrowest at 6.5 percent, reflecting varying monetary policy environments across the region.

Regional money supply (M3) expanded by 19.1 percent year-on-year, driven by a 19.2 percent rise in private-sector credit, an indication of ongoing monetary expansion and growing business confidence.

Overall, the EAC’s strong trade performance in the second quarter of 2025 underscores an increasingly dynamic and diversified regional economy.

The narrowing trade deficit, surging exports, and steady intra-African trade expansion point to improving integration and resilience.

The EAC Secretariat reaffirmed its commitment to fostering a competitive business environment, enhancing value addition, and promoting shared prosperity among Partner States.