The East African Community (EAC) is grappling with a significant trade deficit, with its import bill far surpassing its export revenues, according to data from the bloc. This concerning situation highlights the urgent need for increased efforts to boost economic output and improve the livelihoods of its citizens, as emphasized by members of the East African Legislative Assembly (EALA). During the EALA plenary on June 13, the Chairperson of the Council of Ministers, Ezéchiel Nibigira, presented the budget estimates for the EAC's financial year 2023/2024. He disclosed that the total trade within the EAC had increased by 13.4 percent, reaching $74 billion in 2022 compared to $65.2 billion in 2021. ALSO READ: EAC budget rises to $100m as MPs call for more to spur integration However, Nibigira further revealed that the region's total exports to the rest of the world amounted to $20.1 billion in 2022, while its imports from the rest of the world exceeded $53.8 billion. These figures indicate that the EAC is predominantly a net importer, resulting in a high trade deficit. Intra-EAC trade saw a growth of 11.2 percent, reaching $10.9 billion in 2022 from $9.8 billion in 2021. Notably, cereals, cement, iron and steel, live animals, petroleum products, sugar, foods, and beverages are among the primary products traded within the EAC, signaling a transition from agrarian economies towards industry-based ones. Speaking to The New Times, Jacqueline Amongin, an EALA MP from Uganda, stressed the importance of investing in local production to increase intra-EAC trade and boost exports to other parts of the world while simultaneously reducing imports. She emphasized that relying heavily on imports indirectly affects employment opportunities within the EAC, including for university graduates. Amongin believes that promoting intra-EAC trade and reducing imports will lead to job creation and foster economic prosperity in the region. She suggested supporting the growth and productivity of small and medium enterprises (SMEs) and investing in renewable energy sources, such as utilizing solar power and manufacturing solar panels within the EAC instead of relying on imports from countries like Germany and China. ALSO READ: Trade among EAC countries hits $10 billion EALA MP Francine Rutazana, from Rwanda, proposed increasing intra-EAC trade and reducing dependency on European and American trade partners. She highlighted the potential for establishing joint EAC factories specializing in each country's predominant products. Rutazana cited the pharmaceutical industry as an example, suggesting that Rwanda could lead in its development while other countries support it, instead of competing by establishing separate factories. Rutazana also emphasized the importance of focusing on economic activities aligned with each country's comparative advantage. For instance, she mentioned developing agro-processing industries based on specific crops, such as maize and rice. Data from the EAC Secretariat reveals that the region's economies heavily rely on the export of agricultural commodities, manufactured products, and services like tourism, ICT, and financial services. While there has been an increase in the trade of finished goods, primary commodities continue to dominate the composition of EAC trade, including coffee, tobacco, cotton, rice, maize, wheat, and tea.
