Since the establishment of the East African Community (EAC), the region has seen a steady strengthening of economic and political ties. 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 still affects trade flows, and reduces the benefits to be gained from the regional integration process.
Promoting trade is typically associated with tariff reduction or tariff removal, but many studies have also highlighted the fundamental role of trade facilitation in strengthening trading relationships. Trade facilitation is particularly relevant for regions that have historically suffered from high internal transport costs, such as sub-Saharan Africa. This paper examines the channels through which trade facilitation efforts can reduce the price for transporting goods between countries in East Africa.
This working paper was amended on 12 September 2017 to:
- add a disclaimer on behalf of DFID; and
- correct errors to the mathematical formulations on page 12.