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Business leaders in East Africa have expressed concern over the decline in intraregional trade, some saying that this does not bode well for the integration agenda.
Nicholas Nesbitt, new chairman of the East Africa Business Council (EABC) trade among East African Community member states fell by 10.1 percent between 2013 and 2014 14.6% between 2015 and 2016.
"This is not a good sign for regional companies," he said.
The decline in intraregional trade was largely attributed to persistent non-tariff barriers (NTBs), which the region has fought with limited success over the years.
Nesbitt also blamed restrictions on the export and import of certain products. He stated that the task of the regional trade body, which has observer status with the EAC, is to ensure that flows of goods and services are continuous to support the EAC. regional integration.
Nesb However, he added that this could only be achieved if partner country governments worked closely together and improved the business environment.
He also said that intra-regional trade could be improved through the improvement of technological infrastructure to accelerate the flow of goods. Yesterday, the EAC secretariat official admitted that he was more and more concerned about the fall in intraregional trade, saying the issue had been an important issue at recent high-level meetings.
The Council of Ministers, which is the political body of the regional bloc, instructed the secretariat to establish the reasons for the decline earlier this year.
However, a regional analyst based in Arusha said the causes of the decline were well documented.
According to the 2016 EAC Trade and Investment Report, intraregional trade declined sharply in 2015.
In 2016, total trade declined b The decline was attributed to fluctuations in demand and export prices due to an unfavorable global economic environment.
Total exports decreased by 6.8 percent to $ 14.9 billion. The decline in imports was attributed to a drop in crude oil prices which reduced import bills for petroleum products. [16] 19659002] The EAC trade deficit declined 36.8 percent to $ 14.8 billion in 2016, in part because of a drop in imports into the region
Overall, EAC trade was meager and accounted for only 0.3 per cent of world trade in 2016. 19659002] Intra-regional exports continue to account for a small proportion, accounting for only 5.9 per cent of total EAC trade, despite implementation of the Single Customs Territory which provides for the elimination of tariffs and other barriers to trade between the parties. Total intra-EAC exports decreased by 17.4 percent to $ 2.6 billion in 2016 from $ 3.2 billion in 2015.
However, exports to the Comesa region, at the end of the year, have been declining. excluding EAC partner countries increased by 2.9 percent. $ 2.4 billion, reflecting the growing commercial relationship between the EAC and Comesa.
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