By John Ikani
East African Community (EAC) nations are experiencing a significant shift in their trade patterns, with a surge in commerce amongst themselves and other African countries, while trade with traditional partners in Europe and Asia is on the decline.
This trend reflects a broader movement towards intra-African trade, a key goal of the African Continental Free Trade Area (AfCFTA).
The AfCFTA aims to create a unified African market, boosting trade and economic growth across the continent.
EAC member states saw a 14% increase in trade with the rest of Africa during the fourth quarter of 2023, reaching $4.3 billion.
This marks a significant jump from the same period in 2022. Intra-regional trade within East Africa also witnessed a 12% rise, reaching $2.9 billion in the final quarter of last year.
Meanwhile, trade with external partners is experiencing a downturn. Commerce with the European Union, typically accounting for 10% of the EAC’s total trade, dipped by 14% in the last quarter of 2023 compared to the previous year.
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Similar declines were observed with the United States and leading Asian trade partners like China.
While some imports from Asia, particularly China, have shown improvement, exports from East Africa to these regions have fallen. This suggests that East African countries are finding new and promising markets within Africa.
Trade with regional blocs like the Economic Community of West African States (ECOWAS) and the Southern African Development Community (SADC) has seen impressive growth.
Notably, trade with ECOWAS tripled in 2023 compared to 2022, while trade with SADC rose by a substantial 40%.
This shift towards intra-African trade presents a positive outlook for the continent’s economic independence.
Increased trade within Africa has the potential to lift millions out of poverty, aligning with the goals of the AfCFTA.
The success of the EAC in fostering regional trade highlights the potential of AfCFTA on a broader scale.
As African nations continue to prioritize intra-continental trade, the continent’s economic landscape stands to be significantly reshaped.
What you should know
Trade between South Africa and EAC countries surged by 26%, making South Africa the primary trading partner for EAC nations in Africa.
The trade volume reached $838 million, marking a significant increase from $664 million in the previous quarter of 2022.
Conversely, in the European Union, Germany, Italy, and Switzerland experienced declines in their trade with the EAC region, dropping by 12%, 2%, and 23% respectively.
This decline caused Germany to lose its position among the top 10 trading partners for the region.
Encouraging intra-African trade is pivotal, envisioning the continent’s 1.4 billion people as a unified marketplace.
Such trade not only holds the potential to alleviate poverty but also reduces Africa’s reliance on external economies.
