Collection, Analysis , Compilation and dissemination of trade and Investment information
Trade Information Portals
As a means of facilitating trade and increasing transparency, EAC developed and launched a Trade Information Portal (TIP). The TIP gives access to step-by-step guides on licenses, pre-clearance permits and clearance formalities for the most traded goods within, to and from the EAC.
The TIP is linked with national trade portals that present step-by-step the national import and export procedures in Burundi, Kenya, Rwanda, Tanzania and Uganda.
For each step, the trade portal tells the user where to go, who to see, what documents to bring, what forms to fill, what costs to pay, what law justifies the step, and where to lodge a complaint in case of a problem.
A central part of the TIP is the Trade Facilitation Index (TFI), which enables institutions engaged in trade facilitation to measure and compare the ease of importing and exporting, and the related administrative burden between EAC Partner States. The EAC trade information portal and trade information portals (TIPs) in Partner States are accessible at: tradehelpdesk.eac.int
EAC Trade and Investment Report
The EAC Secretariat annually compiles, publishes and disseminates trade information through the production of the Annual EAC Trade and Investment Report.
EAC Trade and Investment Report 2020 - Highlights
The EAC Secretariat has continued to strengthen the Community Protocols and Partner States have been committed to ensuring a smooth flow of people, goods and services by removing barriers to trade and investment. Consequently, export and import trade comprising agricultural goods and manufactured goods is liberalised. Intra-EAC trade has continued to grow with trends showing that each Partner State is gaining a significant share of the EAC market.
The outbreak of COVID-19 that affected world economies did not spare the EAC Region and its Partner States. It slowed down most economic activities, especially trade and investment. The total trade for EAC declined by 6.08 percent to US$51,915 million in 2020 from US$55,278.2 million in 2019. Total exports from the region in the same period increased by 3.15 percent to US$16,257 million from US$15,760.8 million in 2019. The increase was attributed to the increase in value of EAC exports to United Arabs Emirates and United Kingdom. While total intra-EAC Exports decreased by 7.37 percent in 2020. This decline in exports was due to the COVID-19 pandemic which reduced manufacturing output and slowed down economic activities. On the other hand, total EAC imports decreased by 9.77 percent to US$35,658 million in 2020 from US$39,517.50 million in 2019. The relative decline in EAC imports between 2019 and 2020 was a result of the COVID-19 pandemic which reduced trading activities with import partners, mainly China, India and the EU. In addition, the intra-EAC total imports declined by 3.71 percent during the year under review.
In 2020, Republic of Burundi’s total trade decreased by 7.9 percent to US$840.1 million from US$913.2 million recorded in 2019, while exports to her EAC Partner States declined by 16.4 percent to 12.20 from 14.60. Also, the overall domestic exports earnings declined by 24.57 percent to US$153.42 million in 2020 from US$203.40 million in 2019. During the same period, Burundi’s domestic imports decreased by 2.59 percent, to US$909.81 million, from US$934.00 million recorded in 2019. With regard to services exports trade, Burundi strategically positioned itself during the year, making the highest growth in history of up to 102.3 percent in commercial presence, followed by 42.6 percent in presence of natural persons, and 20 percent for Intra-EAC trade. Government services dropped slightly by 0.7 percent in 2020.
In 2020, Kenya’s total trade in goods decreased by 8.76 percent, from US$23,483 million in 2019 to US$21,427 million in 2020. The exports trade increased by 3.14 percent with her total exports to the rest of the world valued at US$6,021 million compared with that of 2019 at US$5,838 million. The country’s imports declined by 12.7 percent, from US$17,646 million in 2019 to US$15,406 million in 2020. It is noteworthy that for almost a decade before COVID-19 struck the world, Kenya was leading in trade in services in the EAC Region. Even at the peak of the pandemic in 2020, the services sector strongly supported Kenya’s economic growth.
Rwanda’s exports to the world in 2020 fell by 17.85 to record US$958.4 million against US$1,166.7 million in 2019. During the same period, total trade in goods increased by 13.17 percent to US$3,591.26 million in 2020, while imports rose by 2.28 percent from US$2,574.2 million to US$2,632.82 million in 2020. Notwithstanding, trade in services plays an important role in the economy of Rwanda. For example, in 2020, services on intellectual property grew by 100 percent, and, due to increased demand for ICT, telecommunication, computer and information services in Rwanda, this service sub-sector grew by 5.4 percent, recording US$20.9 million from US$19.7 million in 2019.
The youngest partner state in the EAC is the Republic of South Sudan whose total trade to the world in 2020 declined by 93.54 percent to US$36.85 million compared with US$553.22 million in 2019. During the same period, total intra-EAC trade with South Sudan dropped to US$11.2 from US$232.7 million in 2019.
In the United Republic of Tanzania, the private sector leads as the engine for economic growth. In 2020, minerals accounted for the biggest proportion of Tanzania’s exports. Gold was the highest export with US$2,959.2 million, comprising more than 50 percent of the country’s total exports. Tanzania’s total trade increased marginally by 3.7 percent to US$ 14,582.60 million in 2020, from US$ 14,058.44 million in 2019. Tanzania’s main export destinations in the EAC during the year were Kenya at US$230.2 million, Rwanda at US$208 million, Uganda at US$191.3 million and Burundi at US$179 million. Trade in services declined from the fourth quarter of 2019, hitting a decline of 67.9 percent in the third quarter of 2020, from a negative growth rate of 0.69 percent in 2019.
Surprisingly, the Republic of Uganda had a record total trade increase of 4.6 percent accounting for US$12,398.33 million in 2020, from US$12,849.45 million in 2019. Uganda’s imports rose from US$7,753.79 million in 2019 to US$8,250.51 million in 2020, which is an increase of 6.41 percent. During the same period, total exports increased by 1.13 percent to US$4,147.82million in 2020 from US$4,095.66 million in 2019. Likewise, transportation, travel and commercial services exhibited substantial growth in the country. The commercial services sector could not however pick up and drastically dropped in two quarters of 2020.
Foreign Direct Investment (FDI) flows into EAC are an important instrument to support mechanization of Agriculture, and transformation and industrialisation in the region. Over the past years, industrial production in the region has increased, buoyed by investment in manufacturing, construction and financial services. Likewise, the region has sought to exploit its abundant natural resources endowment, especially oil in South Sudan and Uganda, minerals in Burundi, Rwanda, Tanzania and Uganda, and tourism and financial services in the majority of the Partner States. The Partner States have undertaken reforms to improve the investment climate to promote industrial development and resource exploitations and consequently provide a conducive environment to attract FDI.
Generally, Total investment into East Africa decreased by almost 46.29 percent, falling from US$11.64 billion in 2019 to US$6.25 billion in 2020. This fall is attributed to COVID-19, which led to a shutdown of economic activities. The performance of the EAC Partner States in FDI shows that Burundi recorded the highest percentage growth of 179.7 percent. FDI inflows to Kenya decreased by 24.63 percent to US$917.93 million; and the inflows to Rwanda declined by 47.93 percent to a low record of US$1,281.39 million. Notably, the FDI inflows to South Sudan showed a decrease of 67.75 percent, from US$3,879.60 million in 2019 to US$1,251.14 million, while that of Tanzania declined by 71.25 percent to US$754.59 million in 2020. Moreover, FDI inflows into Uganda increased by 16.57 percent to US$1,445.48 million in 2020. It was noted that in 2020, the number of jobs created as a result of FDI inflows to the EAC region fell by 72.5 percent to 58,017 jobs in 2020 from 211,084 in 2019.
Notably, domestic investments have become the key development strategy for EAC Region. In 2020, Uganda marked a large increase in domestic investment value by 19.72 percent at US$518.38 million, followed by Rwanda whose domestic investment accounted for US$331.39 million. However, Burundi experienced the highest percentage increase in domestic investments by 188.50 percent at US$251.57 million from US$87.20 million in 2019.
Furthermore, The FDI into East Africa decreased by 43.39 percent from US$8.67 billion in 2019 to US$4.91 billion in 2020. Only Burundi recorded growth in the year under review, with a 173 percent surge from US$127.2 million to US$348.10 million, while Uganda’s FDI inflows increased by 14.88 percent, from US$807.00 million in 2019 to US$ 927.10 million in 2020. The FDI inflows to Kenya decreased by 33.14 percent from US$ 1,217.9 million to US$814.30 million. And the inflows to Rwanda also decreased by 52.10 percent, from US$1,983.32 million in 2019 to US$950.00 million in 2020, while South Sudan showed a decrease of 64.32 percent from US$3,315.9 million to US$1,183.20 million. Likewise, FDI inflows to Tanzania declined by 43.73 percent to US$684.9 million from US$1,217.2 million.
By and large, there is great potential for growth in trade and investment in the EAC region, and the following recommendations can be worked out by the Partner States. First of all, and in view of the COVID-19 pandemic, Partner States should review and harmonise the COVID-19 testing charges, and the validity and mutual recognition of COVID-19 certificates to ensure safe and smooth movement of goods, persons, services and service suppliers in the Region.