East African Community (EAC) countries rank among the top 20 global trades markets with the potential to grow their economies.
This is despite the existing trade disputes and prevalence of non-tariff barriers (NTBs) in the region.
A new study carried out by the British Standard Chartered Bank shows that Kenya leads the East Africa region in terms of putting in place the right foundations to support future growth trade such as physical and digital infrastructure, e-commerce and ease of doing business.
According to the report, Kenya is the only East African Community country that has improved its trade readiness, which is paying off through investments in infrastructures and improvement in its business environment.
Tanzania has made significant steps in attracting foreign direct investments as well as export and gross domestic product growth.
EAC governments’ failure to resolve trade barriers has attracted the attention of the international communities with the United Nations Conference on Trade and Development launching an investigation into the causes and impact of NTBs on intraregional trade which has gone to as low as 0.2 per cent of the global trade volumes.
The trade barriers are still prevalent in the region even after the EAC countries committing to remove the NTBs without adding new ones under the Customs Union Protocol, which was established in January 2005.
Despite the formation of initiatives such as the EAC Time-Bound Program for Elimination of Identified NTBs to deal with the non-barriers in the region, there appears to be no success.
This has resulted to the EAC trade remaining at 20 per cent compared to trade within other regions like the South African Development Community, whose trade stands at 58 per cent and the European Union at a high of 68 per cent.
The report adds that African markets have a long way to go as they face limited improvements in terms of inward FDI flows which means that most markets need to do more to reassure overseas investors.
The report further added that building strong institutions and improving ease of doing business is critical to the African market.