East African Community Members (EAC) have recorded increased trade volume within themselves and other African countries while reducing trade ties with the European Union and Asia.
This means that East African countries are living the great agenda of Africans trading within themselves and enriching their respective economies while reducing Africa’s dependence on the outside world.
According to the East African, the seven countries in the region increased their trade with the rest of Africa by $584.6 million to $4.3 billion in the fourth quarter of 2023. The increase represents a 14% increase compared with a similar period in 2022 per the latest data by the EAC secretariat.
Cross-border trade within the East African region also recorded a 12% rise surging from the previous year’s $2.6 billion to $2.9 billion in last year’s Quarter 4.
During quarter 3 of last year, trade between East African countries rose 20% to $3.2 billion a height never reached before by trade within the region for two years.
In the same vein trade between East African countries and the rest of Africa crossed a $5 billion mark for the first time in two years.
While Trade within East Africa and the rest of Africa are recording positive numbers reflecting an increase, the direct opposite can be said for trade between East African countries and the outside world.
The trade between East African countries and European Union countries which usually accounts for 10% of EAC total trade witnessed a significant 14% drop from $2.04 billion in the three months to December 2022, to $1.7 billion in the last quarter of 2023.
The same story goes for the United States which is the tenth leading trade partner in East Africa. The US recorded a 19% drop in business with the region from $200 million in the October-December period in 2022 to $161 million last year.
In Asia, a similar downward trend was observed in trade between East African countries and their leading Asian partners which include Pakistan, Malaysia, China, Vietnam, Indonesia, and Korea.
Imports to China showed significant improvement but exports to the Global economic powerhouse dropped by 12% signaling that East African countries are finding markets elsewhere.
Amidst the decline in trade volume between East African countries and the EU, Asia and the United States the EAC countries are finding new and great business partners in Africa.
For example, trade between East Africa and the Economic Community Of West African States (ECOWAS) tripled from $61 million in 2022 to over $199.6 million last year.
Similarly, trade with the Southern African Development Community (SADC) improved by 40% to $2.7 billion.
The overall outlook paints an increase in trade between African countries cutting the continent’s dependency on the outside world.
This comes at a time when African leaders are pushing for an increased implementation of the African Continental Free Trade Area which aims to promote more trade within African countries and lift 65 million people out of poverty.
What To Know
- South Africa is the leading trade partner for EAC countries on the continent, with the trade between them rising by 26 percent. Trade between South Africa and EAC countries hit $838 million, up from $664 million in the last quarter of 2022.
- In the European Union, Germany, Italy, and Switzerland saw their trade with the EAC region drop by 12 percent, 2 percent, and 23 percent respectively. The drop pushed Germany out of the rank of the 10 leading trade partners for the region.
- Africans are encouraged to trade more within themselves turning the continent of over 1.4 billion people into one giant marketplace. This will help reduce poverty in the continent and cut down the continent’s dependency on the outside world.
