Why intra-EAC trade surged to a record $11 billion

Arusha. Trade among the East African Community (EAC) partner states surged to a record $10.9billion last year, thanks to swift removal of the notorious barriers.

The increase is also attributed to strong collaboration between the member countries in harmonisation of the standards.

The record $10.9 billion attained in 2022 followed a 12.1 percent growth of trade within the seven-nation bloc within the period.

“Total intra-EAC trade grew by 11.2 percent to $10.9billion in 2022 from $9.8 billion in 2021,” the secretary general Peter Mathuki said here yesterday.

Addressing the media throughout the region through a video link, Dr Mathuki expressed his optimism on the growth of trade in the region.

He hinted on the possibility of making trade among partner states in the Community account for 40 percent of the region’s total trade.

The percentage share of intra-EAC trade to EAC total trade stood at 15 percent in 2022, he explained in a hybrid media conference.

Signs of a steep rise in share of intra-regional trade out of the total trade with the rest of the world are slowly emerging.

Already, the EAC intra-trade value for 2023 has indicated a positive trend with 16 percent in January and 19 percent in February recorded of total global trade.

According to him,EAC total trade increased by 13.4 percent to $74.1 billion in 2022 from $65.3billion in 2021.

Intra-regional trade has also been boosted by admission of DR Congo into the bloc last year and enhanced trade facilitation initiatives. These include, among others, removal of non-tariff barriers (NTBs) and harmonization of 2,568 East African Standards.

The partner states are reckoned to have adopted the EAC Harmonised Standards, ranging from 77 percent to 91 percent as of June this year.

Also as of June this year, 26 NTBs were resolved out of the 33 reported. Seven NTBs remain outstanding although at different levels of resolution.

To facilitate free movement of goods, the partner states have effectively eliminated NTBs “as they arise and have cumulatively eliminated a significant number of 184 of them with only a few remaining outstanding.”

In that vein, the community has also developed an NTBs Mobile App to aid the timely reporting of the notorious trade barriers.

Dr Mathuki said despite a host of challenges - old, new and emerging - the EAC was inching towards a fully-fledged Customs Union. This is seen within reduction in the turn-around time from an average of 21 days to 4 days along the EAC corridors.

Ninety five percent of the EAC Customs regimes including imports and exports have been operationalised with transit being piloted.

The average transit time from the main EAC Ports of entry (Dar es Salaam and Mombasa) to the exit borders reduced from 86.16 hours (3.59 days) to 81.84 hours (3.2 days) in 2022.

Operationalisation of the One Stop Border Posts (OSBPs) - there are 14 of them- has led to a reduction in cross border clearance time by 80 percent.

However, the EAC boss affirmed that it will take time before the region does away with the trade barriers as some “keep on evolving.”

He said the seven outstanding NTBs have much to do with occasional road blocks mounted by the police in some partner states.

Other barriers are simply restrictions on movement of goods due to what is deemed to be protectionism by some member countries in the bloc.

While NTBs continue to impede full implementation of the

Customs Union, protectionism is biting at national level, he said.

He called on South Sudan to ratify the African Continental Free Trade Area (AfCFTA) agreement like the rest of the EAC states.

To enhance economic integration and trade, the regional organization will push for digitalisation to catalyse E-commerce that will, in turn, create jobs.