EABC urges elimination of trade barriers in EA region
ARUSHA: THE East African Business Council (EABC) has urged East African Community (EAC) member states to address existing trade barriers to enhance intra-regional trade and reduce overdependence on external markets.
EABC Acting Executive Director, Mr Adrian Njau made the remarks in Arusha yesterday during a media briefing on the EAC Common External Tariff (CET).
Mr Njau noted that the slow growth in intra-EAC trade, compared to the rapid expansion of external trade, is largely due to the underutilisation of regional trade opportunities.
He cited key impediments including the persistent existence of non-tariff barriers (NTBs), weak regional industrial value chains, lack of product diversification and inconsistent application of regional trade instruments such as the EAC CET.
“Every year, the EAC conducts a pre-budget consultative process where Partner States’ ministries of finance and the EAC Secretariat meet to review tax and customs proposals, including recommendations for changes to the CET, which are then adopted in the budgets that commence each July,” he explained.
“Eliminating NTBs in the region would unlock an estimated 63.4 billion US dollars in regional trade and increase intra-EAC trade by an additional 54 per cent.”
According to him, inconsistent implementation of the EAC CET, particularly through the use of stays of application (SoAs) and countryspecific duty remission (SDR), remains a major obstacle to intra-regional trade.
Mr Njau explained that final products benefiting from SDRs but not considered of EAC origin are subjected to full CET rates when traded within the region, which further hampers intra-EAC trade growth.
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In light of these challenges, he called for a uniform application of the EAC CET by all Partner States and the elimination of charges of equivalent effect on goods of EAC origin transferred across member countries.
He also recommended structured consultations before pre-budget cycles to ensure that stays and remissions do not undermine regional commitments.
He advocated for clear regional guidelines and timeframes on stays of application to preserve the predictability of the CET, annual reviews of the stays to prevent trade distortions and the promotion of an EAC-wide duty remission or drawback scheme for industrial inputs to level the playing field among Partner States.
Earlier, Mr Njau revealed that in 2024, EAC total trade grew by 14.2 per cent to reach 124.9 billion US dollars, up from 109.4 billion US dollars in 2023.
Exports surged by 24.7 per cent to 56 billion US dollars, while imports rose by 6.8 per cent to 68.9 billion US dollars. He further noted that intraEAC trade grew by 9.4 per cent, reaching 15.2 billion US dollars.
However, he pointed out that intra-EAC trade only accounted for about 12.2 per cent of the region’s total trade with the world last year, meaning that approximately 87.8 per cent of trade remains with external markets—a figure that underscores the urgent need to deepen regional integration.
“The growth of total EAC trade was primarily driven by external trade, which rose from 109.4 billion to 124.9 billion US dollars, while intra-EAC trade only increased from 13.9 billion to 15.2 billion US dollars,” he said.
“The slow growth in intraregional trade raises a fundamental question as to whether the EAC will be able to meet its target of achieving 40 per cent intra-EAC trade by 2030,” he added.
