EAC trade up 47 per cent ahead of Customs Union

By John Oyuke in Arusha

Trade within East Africa Community (EAC) grew by 47 per cent last year despite earlier fears that a regional free trade area would negatively affect economies of some partner states.

An evaluation of the impact of the Customs Union has revealed that intra-EAC trade moved from $1.85 billion (Sh139 billion) in 2005 to $2.72 billion (Sh204 billion) last year.

Exports to the rest of the world also grew by 26.2 per cent last year compared to the previous year.

Tanzania’s Prime Minister Mizengo Pinda called for acceleration of the integration process saying trade performances are a clear indication of the positive trends by the EAC Partner States.

"Contrary to earlier perceptions that the Customs Union would negatively affect the economies of some Partner States in revenue erosion and competitiveness, major benefits have accrued in terms of increased trade and revenue," he said.

A vegetables market. From next year, goods will be traded free of duty within the five partner states of the East Africa Community. Photo: File

Pinda was speaking at the East African Community Regional High Level Forum on Customs Reforms and Implementation of a fully-fledged Customs Union in Arusha at the weekend. Implementation of the Customs Union has been progressive since 2005 through a gradual removal of tariffs on intra-EAC trade.

Improving performance

It was against this background that a gradual phase down of duties on selected lists of goods from Kenya to Tanzania and to Uganda was adopted.

From next year — as per the progression — goods will be traded free of duty within the five partner states of the East Africa Community, that is, Kenya, Uganda, Tanzania, Rwanda and Burundi. The EAC Customs Union will be fully-fledged next year. This is expected to coincide with commencement of the Common Market, which is slated to begin in July next year.

Pinda said with this in mind, improving the performance of the Customs Union should be key to development of the region.

"This is because the EAC would witness not only the free movement of goods enabled by the Customs Union, but also the free movement of persons, labour, services and capital," he added.