Increase Intra-Africa Trade

East African trade
The majority of East Africa’s trade is done by road

Traders in the East African Community (EAC) are already feeling the pinch of uncertainties in the global economy with demand for regional exports slowing down.

Reports suggest that there’s a considerable decline in demand for East Africa’s fish exports in the European market, which has affected thousands of fish farmers mainly in Uganda and Tanzania.

While demand in Spain, Portugal, Greece and Germany – some of the biggest consumers of Nile Perch fillets – slows, there’s a potentially substantial fish market in the region, with Rwanda’s annual fish demand alone standing at 25,000 tonnes.

Additionally, as commodity prices on the world market dwindle, Rwanda’s export receipts are projected to grow by just 1 per cent this year, a huge decline in growth compared to the 56 per cent experienced last year. However, export volumes are projected to remain high.

The volatility in the global economy, worsened by high oil prices, could hold back regional economic growth and development ambitions.

To offset the impact of a slowdown in economic activity in the eurozone, East African Community partner states and African countries, in general, must increase the level of trade amongst themselves. EAC alone has a market of more than 120 million people while Africa’s market exceeds 900 million people.

Yet, intra-Africa trade accounts for a paltry 11 per cent of the total African trade, compared with 47 per cent in Asia and 70 per cent in the European Union.

Increasing intraregional trade will certainly boost regional exports but it must be implemented alongside other policy measures designed to eliminate trade barriers.

The EAC, in particular, has to address challenges of non-tariff barriers. This should be able to compliment efforts to improve the region’s ability to trade with the rest of the world.