Intra-regional trade could create 2 million new jobs for East Africa

The East African region has a combined GDP of US$ 880 billion and a population of 437 million. Despite this attractive combination, the economies of East Africa are still highly fragmented with low intra-regional trade and investment levels. To make matters worse, the trade and investment have been declining. The region’s biggest economies of Kenya and Ethiopia have an annual bilateral trade worth less than US$ 100 million since they barely trade with each other. While these two economise paint a rough picture of the trade imbalances in the region, trading within the East African Community (EAC) is higher with exports peaking in 2013 at US$ 3.5 billion. Again, unfortunately, by 2017 the exports volumes had declined with earnings reducing by 31 per cent to just US$ 2.4 billion. The lack of trade integration poses a serious impediment to the future development of the region despite the fact that the East African region has become the fastest-growing sub-region on the continent. East Africa’s economy is consumption-led creating a significant domestic demand that is being met by imports rather than regional production. This has increased trade deficits which are 10 to 20 per cent of GDP. To address this, the region