Kenya's export to the EAC on the rise

Kenya's exports to the East African Community (EAC) have been on the rise, increasing by $16.8 million to $1.25 billion between June 2013 and June 2016. This growth comes as the government focuses on stronger integration and the elimination of non-tariff trade barriers within the region. While this increase in exports showcases promising economic progress, there are lingering divisions within the EAC regarding the Economic Partnership Agreement (EPA) deal with the European Union. As of now, Kenya and Rwanda are the only member states to sign and ratify the agreement, highlighting the disparities among EAC nations. However, the potential entry of South Sudan into the EAC presents new investment opportunities that could further stimulate economic growth in the region. One of the key figures shedding light on this economic scenario is Betty Maina, the Principal Secretary at the State Department of East African Affairs in Kenya. Maina emphasized the importance of regional integration for expanding trade opportunities among EAC member states. She highlighted the significant increase in interregional trade, with East Africa experiencing a commendable 25% trading volume within the region, the highest in Africa. This robust trade environment benefits all countries involved, encouraging mutual economic growth and cooperation. Despite the progress in trade dynamics, challenges persist regarding the EAC's alignment on the EPA deal with the EU. While Kenya and Rwanda have shown commitment by signing and ratifying the agreement, Tanzania and Uganda have yet to join, raising concerns about the region's unity in trade policies. Maina underscored the significance of the EPA in fostering a common trade framework between the EAC and the EU, facilitating development assistance and sectoral growth, particularly in fisheries. She expressed optimism in the eventual inclusion of all EAC nations in the EPA to ensure cohesive trade relations. The interview also delved into the potential impact of South Sudan's accession to the EAC and its implications for trade agreements. Maina clarified that South Sudan's entry would necessitate adherence to existing EAC agreements, although the country would have the flexibility to determine its optimal trading arrangements. Notably, Kenya's unique developmental status mandates its participation in the EPA for preferential trade terms with the EU, posing a variance in trading approaches within the EAC. Furthermore, the discussion extended to the disparities in central bank interest rates among EAC countries, with Kenya at 10%, Uganda at 14%, and Tanzania at 7.58%. Maina elucidated that while national policies dictate interest rates, efforts are made to align policies and foster coordination among central banks to create a harmonious economic environment. While uniform interest rates may not be a requirement, the collaboration between central banks aims to establish a synchronized economic framework that supports overall regional stability. In conclusion, Betty Maina's insights shed light on the complexities and opportunities within the EAC's economic landscape. As Kenya's exports to the region continue to flourish, addressing divergences on trade agreements and harmonizing economic policies are crucial steps towards fostering a cohesive and thriving East African community.