Would more trade facilitation lead to lower transport costs in the East African Community?

Briefing papers
May 2017
Andreas Eberhard-Ruiz and Linda Calabrese

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 briefing, based on interviews with East African private sector organisations and other relevant stakeholders, examines how and why increased trade faciliation has reduced transport costs, and argues that efforts to date have impacted the logistics chain unevenly, leaving room for more to be done to speed up regional trading and produce benefits for consumers.