The East African Community (EAC) has said that the intra-regional trade has increased above two fold in last decade and the potential to upscale it was enormous.
The EAC Secretary General Dr Richard Sezibera has revealed that trade increased from less than 10 to 25 per cent among the five partner states of Kenya, Uganda, Tanzania, Rwanda and Burundi in last ten years, adding that the volume was expected to increase as the regional integration was widening and deepening.
“This has been due to the reduction of trade barriers that has consequently reduced the cost of doing business in the region,” he said when addressing the on-going African Development Bank’s conference in Kigali, Rwanda.
Citing an example, he said previously it would cost $1500 to ship a container from Japan to the port of Mombasa and $4500 to move the same container to Kigali from Mombasa.
“Much of the cost was due to administrative hurdles. The cost (from Mombasa to Kigali) has since gone down by $1075,” he said Tuesday.
The EAC boss called for further removal of non-trade barriers, saying the move had proven to be an effective way to ease intra-regional trade.
On intra-African trade, Dr Sezibera said that the EAC in partnership with the African Development Bank has put up an East African Payment system that enables the fast movement of finances and enables business people across borders carry out transactions in their local currency.
Participants called on African countries to avoid duplicating products, seen as one of the challenges that affect the growth of intra-Africa trade.
A majority of African producers and exporters tend to have similar products which reduce chances of trading between each other which means importing from markets outside Africa, according to traders.
Rwanda’s minister of Trade and Commerce, Francois Kanimba said the structure of the production systems in African countries poses a challenge.
Many African countries’ products for export, he said, are almost the similar if not the same.
“There is need to diversify on our exports if we are to trade with each other,” he stressed.
Kanimba also cited the tendency by most African producers to design and produce exports with the developed markets in mind as well as a culture of discouraging emerging traders at border points who are likely to positively impact on intra-Africa.
“There is a bad culture where you have permanent tendencies at African border points to discourage emerging traders who would like to take the opportunity to penetrate and embark on the regional market,” the minister noted.
Frederick Agah the deputy director of the World Trade Organization said there was need to integrate regions to foster cooperation and trust between countries to develop intra-Africa trade.
He called on African regions to emulate successful models of regions that have already integrated and boosted trade like the East African Community (EAC).