EAC sees sharp fall in regional trade due to COVID-19

The East African Community (EAC) has seen a sharp decline in regional trade due to the COVID-19 pandemic, with trade volumes plummeting by an estimated 30 to 40 percent in recent months. Frank Matsaer, CEO of TradeMark East Africa, discussed the ongoing challenges faced by the region in a recent interview. Despite some signs of improvement, Matsaer highlighted that a significant drop in trade is likely to persist until the development of a vaccine. In the early stages of the pandemic, trade in the region saw a staggering 90 percent decrease, although there has been a slight rebound since then. Matsaer pointed out that imports and exports are expected to contract by 20 to 25 percent, with significant declines in trade volumes at border crossings reaching up to 65 percent. Additionally, the African Development Bank has revised down GDP forecasts for the region, indicating a challenging outlook for trade in the near future. One of the major challenges during this period has been the disruption of regional value chains and global supply chains, making it harder to move goods across borders and access essential inputs. Currency volatility and delays in raw material deliveries have further compounded the issues faced by businesses in the region. Moreover, concerns around food standards and adherence to safety protocols have emerged as critical considerations for the export of food products. The conversation also touched on the impact of transnational truck drivers on the spread of COVID-19. While these drivers play a crucial role in facilitating trade across East Africa, they are also considered potential carriers of the virus. Matsaer emphasized the importance of implementing strict safety procedures for truck drivers, including standardized testing protocols and the use of personal protective equipment to mitigate the risk of infection. In response to the challenges facing intra-regional trade, Matsaer shared some of the proposed solutions and policy frameworks being developed by TradeMark East Africa. The organization has established a $26 million facility called Safe Trade to support the implementation of safety measures at borders and ensure the continuity of trade. The focus is on protecting front-line staff, facilitating mutual recognition of testing, and supporting informal traders whose livelihoods have been severely impacted. Looking ahead, Matsaer highlighted the need for trade policy reforms to remove tariffs on essential goods and promote regional production. He emphasized the opportunities that may arise from disruptions in global supply chains, such as the potential for increased local production of goods like personal protective equipment. Additionally, he underscored the importance of leveraging initiatives like the African Continental Free Trade Area to foster intra-African trade and attract investment in key sectors. Despite the significant challenges posed by the pandemic, Matsaer remains optimistic about the potential for East Africa to emerge stronger and more resilient from this crisis. He urged stakeholders to seize the opportunities for economic diversification, local production, and foreign investment to rebuild and revitalize the region's trade landscape.