Intra-EAC trade falls to $5.63 billion

Workers in Kigali offload goods imported from other East African countries. The share of intra-EAC trade to the total trade declined to 10.1 per cent in 2014 from 11.1 per cent in 2013. PHOTO | CYRIL NDEGEYA 

By JAMES ANYANZWA

In Summary

• Kenya, Uganda and Tanzania continue to dominate intra-East African Community trade even though its value fell from $5.8 billion in 2013 to $5.63 billion in 2014.
• Intra-EAC trade is mainly dominated by agricultural commodities such as coffee, tea, tobacco, cotton, rice, maize, and wheat flour and manufactured goods such as, cement, petroleum products, textiles, sugar, beer and salt.
• Non-tariff barriers and double taxation for companies operating in two or more member countries are among key challenges facing businesses in the EAC regional integration agenda, according to the Kenya Private Sector Alliance.

Kenya, Uganda and Tanzania continue to dominate intra-East African Community trade even though its value fell from $5.8 billion in 2013 to $5.63 billion in 2014.

The share of intra-EAC trade to the total trade declined to 10.1 per cent from 11.1 per cent in the same period.

Intra-EAC trade is mainly dominated by agricultural commodities such as coffee, tea, tobacco, cotton, rice, maize, and wheat flour and manufactured goods such as, cement, petroleum products, textiles, sugar, beer and salt.

Uganda remains a key market for Kenya’s exports, according to Kenya’s Economic Survey (2016).

Kenya’s total exports to Uganda over the 2011-2015 period stood at $3.28 billion, followed by Tanzania ($1.98 billion), Rwanda ($734.93 million) and Burundi ($303.83 million). Exports to South Sudan, which was admitted to the EAC in March this year stood at $71 million.

Similarly Kenya imported the most goods from Uganda at Ksh81.57 billion ($815 million) in the same period, followed by Tanzania ($748.64 million) and Rwanda ($36.45 million).

But major imports came from South Africa, totalling $3.19 billion.

Latest data from the Kenya National Bureau of Statistics (KNBS) shows that Kenya’s combined exports to Uganda, Tanzania and Rwanda  dropped from $69.9 million   in January to $1.56 million in February, before rising to $88.8 million n March.

Last year, a study by Kenya’s Ministry of East Africa Community revealed that  the volume of Kenya’s exports to the EAC had fallen sharply largely due to unfair competition from Chinese traders and the country’s unfavourable taxation regime.

Unfavourable taxation measures such as value added tax, industrial development fee as well as the railway development fund make Kenyan manufactured goods five per cent more expensive than imports from Comesa and SADC countries, according to the survey.

Non-tariff barriers and double taxation for companies operating in two or more member countries are among key challenges facing businesses in the EAC regional integration agenda, according to the Kenya Private Sector Alliance.

Others are non-recognition of standards and professional qualifications among partner states.