This is what it takes to double intra-EAC trade by 2030

Dar es Salaam. Concerted efforts and strategic interventions are key for the East African Community (EAC) to achieve its goal of doubling intra-regional trade from the current levels of 15 percent to 30 percent by 2030, according to the East African Business Council (EABC) executive director, Mr John Bosco Kalisa.

The efforts would have to include having a common investment framework or a regional investment authority, improving port efficiency and productivity and addressing all regulatory hurdles, just to mention a few.

Mr Kalisa was speaking during the CEO Roundtable Meeting on East African Integration and Economic Outlook 2024 held here on March 20.

He remarked that while the EAC economies continued strong performance and diversified the targets to improve trade, there is a need for clear and simple tax policies that support business operations and facilitate trade finance while also promoting regional value chains.

“It’s only possible to reach that target if we put down the right policy environment, with the private and public sectors working together in designing solutions,” he said.

“Some of the other recommended issues by the EABC include improving port efficiency and productivity, having a one-stop border post, and branding products from the region as ‘Buy East Africa’ or ‘Build East Africa’ to enhance market visibility and promote regional identity,” said Mr Kalisa.

Addressing the long-standing issue of a common currency within the EAC, stakeholders stressed the urgency of fast-tracking initiatives related to monetary union.

The EABC boss highlighted the importance of enhancing the acceptability of local currencies across the region as a crucial step towards monetary integration and the establishment of a unified currency regime.

Gracing the event director of the Department of International Trade Coordination and Economic Diplomacy at the ministry of Foreign Affairs and East African Cooperation, John Ulanga, emphasised the implementation of the EAC industrialization strategy, transport, and trade facilitation as key issues crucial to boosting intra-EAC and African trade.

Chairperson of the Switzerland-Tanzania Chamber of Commerce, Ms Amne Suedi, emphasised the need for harmonisation of policies and infrastructure development for the prosperity of East Africans through trade.

“If an investor is to come and there is harmonisation of laws pertaining to doing business across the region, the likelihood of them investing in more than one country is very high,” she said.

Tanzania Private Sector Association (TPSF) Programme Specialist, Mr Godfrey Mondi, called for the need to improve port efficiency for competitiveness and the use of the Pan African Payment Settlement System to boost intra-African trade.

The managing director of Alaska Tanzania Group, Ms Jenipher Bashugwa, called for the commercialization of agriculture, the reduction of regulatory costs of compliance for SMEs, and the simplification of trade procedures.

“Lowering compliance costs will incentivize informal businesses to formalise their operations, thus expanding the tax base," she said.

In their 2024 Economic Outlook report, the EABC projects Tanzania's real gross domestic product (GDP) to reach 6.3 percent in 2024.

They said this projection is on the back of the rebound in tourism and continued investment in public infrastructure.

“Inflation in Tanzania is projected to moderate to 4 percent in 2024, potentially influenced by global commodity prices and domestic demand,” Mr Kalisa noted.

He stated Tanzania should upgrade the agricultural economy to value-based processing.

As the global shortage of the supply of dollars led to the depreciation of shillings, the EABC emphasised that partner states should pay and settle intra-EAC trade in the local currency to mitigate the depreciation of the shillings to the dollar.

Regional EABC Board Member, Mr Paul Makanza, said EAC economies will grow at 5.48 percent in 2024, increasing from 4.9 percent in 2023 (IMF 2023). EAC inflation is projected to reduce from 12.5 percent in 2023 to 7.9 percent in 2024, indicating a positive outlook for price stability.