EAC GEARS FOR 40 PERCENT REGIONAL TRADE

EAC GEARS FOR 40 PERCENT REGIONAL TRADE

BY GRACE MACHA IN ARUSHA

The East African Community (EAC) is gearing for a 40 percent intra-regional trade in five years.

Attaining the target means increased efforts to eliminate a host of the trade barriers that have persisted for years.

The secretary general Peter Mathuki has outlined measures he believed would swiftly foster intra-regional trade to that level.

These include, among others, optimising implementation of the Customs Union and Common Market protocols.

Others are implementation of the four-band Common External Tariff (CET) to enhance trade competitiveness.

Two years ago, the fast expanding economic bloc adopted a four-band CET structure of 0%, 10%, 25% and 30%/35%.

"We endeavour to continue with its implementation to facilitate trade competitiveness", he said in his New Year address to the EAC staff.

He did not mince words that non-tariff barriers (NTBs) were to blame for the low intra-regional trade estimated to be only eleven percent in 2022.  

Dr Mathuki went on; "We need to work together to  eliminate NTBs hindering intra-regional trade".

He was optimistic that intra-regional trade in East Africa will rise to at least 40 percent over the next five years.

According to the EAC boss, fostering regional trade would entail resource mobilization from multiple sources.

He said that the EAC will work with all partner states to expedite the operationalisation of the financing formula to maximize the bloc's performance.

“We are mulling on convening a Sectoral Council Meeting with ministers in charge of Finance to discuss on implementing this directive as well as a strategy to rationalise the cost of doing business in the community,” he added.

The Community will during 2024 prioritise revitalising relations with the development partners the private sector and the civil society.

The development partners  account for about a half of the EAC annual budgets which revolved around $ 100million for years.

Intra-regional trade has, nevertheless, been on an upward trajectory with goods and services transacted during 2022  valued at $ 10.1 billion.

In 2021, trade within the bloc of six nations then,before the admission of DR Congo, was valued at $ 9.8 billion.

During 2022, on the other hand, the EAC total exports to the rest of the world were valued at $20.139 billion.

Total imports from the rest of the world into the region amounted to $53.891 billion, according to the East African Legislative Assembly (Eala).

The most traded products within the region are cereals, cement, iron and steel, live animals, petroleum products, sugar, foods and beverages.

Business analysts said this signifies that the EAC economies were "agro-based with good signs of moving to industry-based.”