A key question for East Africans who are passionate about regional integration is, how well is the East African Community (EAC) doing in terms of the promotion of intra-regional trade? The answer is not as simple as one might expect. 

On August 24, The EastAfrican published an article by Luke Anami, which stated: “The EAC may have to blame itself for slow trade between its partner States, even though the bloc has some of the most ambitious business protocols on the continent. In spite of these, trade between members has reduced from 16 percent to 14 percent in recent years, signalling persistent protectionism and defiance of the bloc’s policies.” 

The article went on to make some pertinent observations about the persistence of trade barriers within the EAC. But the figures presented by Anami are contestable. Indeed, arguably, the last four to five years have witnessed a dynamic growth in regional trade, despite a difficult global environment. 

Read: How delayed EAC protocols slow down regional trade

Confusion occurs around the precise figures because there are different ways of measuring the extent of regional trade. Without getting too technical, it all depends on the perspective taken. How, for instance, do we deal with the transhipment of goods that originate outside East Africa but pass through several member states (e.g. goods passing from the ports of Mombasa or Dar es Salaam to Uganda, Rwanda, or beyond)?

In principle, these are classified as “re-exports,” and should not be counted in intra-regional trade, but sometimes the distinction is not easy to make from official trade figures. 

What about informal cross-border trade? There are a number of cross-border “hotspots” of informal trade within the EAC, where small-scale transactions are not always captured in the official statistics. Many of these transactions involve agricultural produce or livestock. The Bank of Uganda regularly reports its estimates of informal cross-border exports, which in 2023 was estimated at more than $544 million.

Finally, do we include new member States even though they have not yet started to implement the EAC trade rules? Somalia only joined the EAC in November 2023, so it is too early to consider, but for the Democratic Republic of Congo (DRC), it has been a member since March 2022.

All these distinctions are important and can make a huge difference to perceptions of how well a regional bloc like the EAC is performing. In Anami's article, for example, the the 14 percent figure for intra-regional trade appears to refer to statistics that include the DRC. This is legitimate - but also misleading. 

The DRC is a very large country, with huge mineral wealth. It is also the only country in the region with a consistently positive trade balance (i.e. it exports more than it imports). This is precisely why, from a trade perspective, the DRC is such a valuable member of the EAC trading bloc – it has the capacity to boost regional trade by importing a lot of goods from the rest of the region. But because of its mineral wealth, the bulk of its exports are commodities destined for outside the continent. 

China alone absorbs more than half of DRC’s total exports. Consequently, the inclusion of the DRC in the EAC trade statistics results in an immediate drop in the intra-regional trade as a share of total trade. It also makes the intra-regional trade share extremely volatile, because the denominator (total export values) are constantly shifting in line with global commodity prices.

So, what happens if we exclude DRC? Suddenly, the share reaches 21 percent, putting the EAC in the vanguard of African regional economic communities in terms of its share of intra-regional trade (see Figure 1). 

Twenty percent may not sound a lot, but given the characteristics of commodity-based economies, it is high – around the same level of intra-regional trade as the Association of Southeast Asian Nations, and almost double that of the Southern Common Market in Latin America.  

More broadly, however, we can appreciate from Figure 2, drawn from EAC Secretariat official data, that the value of intra-EAC exports has been expanding uninterruptedly over the last seven years, from $2.4 billion in 2017 to more than $6.4 billion in 2023. And this is without taking into account the myriad of informal cross-border transactions that are not captured in official statistics. 

In effect, the data reflect a remarkable rate of expansion of intra-EAC trade – more than doubling, at a time when global trade growth has been sluggish, and the region has been grappling with the knock-on effects from the Covid-19 pandemic. It has been led by exports from Kenya, Uganda and Tanzania, but all member States have benefited from the dynamic growth of EAC markets.

And although data from other sources give different numbers for intra-EAC trade, the sources tend to concur on the sharp rise in the absolute value of intra-regional trade. 

To sum up, it is easy to conflate the wrong things and give a false impression of the trends in intra-regional trade. There are a lot of legitimate concerns, particularly from the private sector, about non-tariff barriers and other impediments to regional trade. But this should not cloud our judgment about the fact that the most important market for East African economies is the one on their doorstep.  

Andrew Mold is Chief, Regional Integration and AfCFTA Cluster, Regional Office for Eastern Africa, United Nations Economic Commission for Africa, Kigali, Rwanda.