Since the establishment of the East African Community (EAC), comprising Burundi, Kenya, Rwanda, Tanzania and Uganda, the region has seen a steady strengthening of economic and political ties among the community's partner states. The EAC Customs Union came into force in 2005, facilitating the establishment of a common external tariff and paving the way for the removal of all intra-regional tariffs by 2010.
Despite this, available trade statistics paint a mixed picture about the impact of the EAC on intra-regional trade. Although the establishment of the EAC coincided with an important expansion in intra-regional trade in absolute terms, overall intra-EAC exports did not grow as a share of the region's total exports. In addition, the persistence of non-tariff barriers (NTBs) still affects trade flows, and reduces the benefits to be gained from the regional integration process.
This fifth and final briefing of a project on NTBs in the EAC examines the cost of transport and logistical barriers to regional trade, calculating that they cost East African economies between 1.7% and 2.8% of gross domestic product every year. It then offers recommendations for policy-makers, suggesting that further trade liberalisation and improvements to infrastructure will reduce costs, in turn benefitting consumers by lowering prices.
Report by the Overseas Development Institute
The costs of logistical and transport barriers to trade in East Africa0.09 MB