3 days ago
EAC's invisible walls: Why intra-trade remains stubbornly at 15pc?
The East African Community (EAC) Council of Ministers has received a report on a fresh surge in non-tariff barriers to trade in the regional bloc, largely fuelled by contradictory domestic taxes.
The EAC Sectoral Council of the Ministers of Trade, Industry, Finance and Investment (SCTIFI) says the number of non-tariff barriers (NTBs) within the bloc increased from 10 in November 2024 to 48 in May 2025, reflecting the challenges member states are facing trading with one another.
This has left the intra-EAC trade stagnant at 15 percent.
NTBs have impacted trade in various goods and services, including sugar, milk, soft drinks, beer, cement, clinker, road user charges, paints and varnishes, fish, and forest and timber products, according to disclosures by the council.
Read: Ugandan traders bemoan erratic road fees on EAC trade routesThe ministers blamed the resurgence of NTBs in the region on the continued enactment of discriminatory laws and regulations by member states.
This has led to violations of the national treatment principle and the non-notification of such breaches and the partial implementation of partner states' commitments to EAC integration, including non-resolution of NTBs and the imposition of new ones, which contravenes EAC laws.
Other major causes are non-harmonisation of policies and regulations among partner states, especially fees, levies and charges and the non-timely resolution of reported NTBs.
Read: EAC is not treating us well, say Rwandan tradersThe meeting noted that of the 48 NTBs, 18 were resolved, 22 are at various stages of resolution, two were operational and were referred to the relevant committees for consideration, and that six were not bona fide.
By November 2023, 269 NTBs had been resolved, leaving only nine were outstanding.
The resurgence of NTBs raises concerns about the partner states' commitment to regional integration and the promotion of intra-EAC trade.
Domestic taxesThe EAC Secretariat says intra-EAC trade has remained low, largely due to NTBs.
EAC's total trade with the rest of the world increased by 2.37 percent to $80.6 billion in 2023 from $78.7 billion in 2022, while intra-EAC total trade grew by 13.1 percent to $12.1 billion from $10.6 billion in the same period.
However, the percentage share of intra-EAC trade to bloc's total trade was 15 percent in 2023.
NTBs have been a major hindrance to the free movement of goods as enshrined in the EAC Customs and Common Market protocols.
Ordinarily, NTBs refer to any obstacles to international trade that are not import or export duties and may take the form of import quotas, subsidies, customs delays, technical barriers, or other systems preventing or impeding trade.
According to the ministers, the number of NTBs were attributed to domestic taxes such as excise duties and other charges of equivalent effect and that a number of reported NTBs were operational related to service delivery and could be addressed through Trade Facilitation Committee rather than describing them as NTB.
The council took note of the 18 resolved NTBs and directed partner states to refrain from enacting laws that impose fees, levies and charges of equivalent effect on goods originating from the bloc and to refrain from imposing quotas on goods originating from the bloc.
It also directed the partner states to make budgetary allocation to undertake activities related to the resolution of NTBs and that the EAC Secretariat should convene and coordinate the bilateral engagements among partner states on specific NTBs as they occur in order to resolve them promptly.
Customs UnionThe council also directed partner states to treat goods from the region as transfers and refrain from enacting discriminatory laws that treat EAC originating goods as imports and that partner states should timely notify the EAC Secretariat in a timely manner of any new measures that would affect trade.
The Customs Union is the first pillar of the EAC regional integration that provides for free movement of goods and services in the region by eliminating trade barriers and fostering a competitive environment for goods produced within the region.
Under the region's revised four-band Common External Tariff (CET), which took effect on July 1, 2022, finished products imported from countries outside the bloc attract a 35 percent duty, intermediate products available in the EAC 25 percent, intermediate products not available in the region 10 percent and raw materials and capital goods attract a zero percent import duty.
Additionally, there is a list of sensitive items, such as sugar, wheat, rice and milk, which attract a duty of more than 35 percent, to protect local industries from competition.
