US Af BC Building Future 2016
February 22, 2017
East Africa has been the fastest-growing region on the continent over the past decade, but trade between the United States and the region’s main economies remains limited. In 2014, Kenya, Rwanda, Ethiopia, Tanzania, Uganda, and Burundi all had higher growth rates than the United States. Despite this growth, U.S. trade with the region has been marginal and represents only 5% of total East African trade. East Africa’s main trading partners are China, India, and the European Union (EU).
Regional integration has played a key role in boosting intra-East African trade and increasing the region’s access to global markets. The East African Community (EAC), a regional economic community that was originally founded in 1967 and revived in 2000, is the leading regional organization on the continent. Since 2000, the EAC has gradually reduced tariffs, trade barriers, and bottlenecks in the region, helping members increase their trade performance.
Several large-scale infrastructure projects that are underway stand to vastly improve trade in the region. These projects include the following:
- The Northern Corridor Integration Projects (NCIP), a regional initiative that encompasses 16 separate infrastructure projects, including a Standard Gauge Railway that will link most of the region’s landlocked states to the Kenyan port of Mombasa.
- Ethiopia’s new Standard Gauge Railway, a 5,000 km rail line that would be the region’s longest railway and help link Africa’s most populous landlocked country to the Indian Ocean.
- Tanzania’s Bagamoyo Port project, which stands to be East Africa’s largest port when completed.
- The One Stop Border Post (OSBP) system, a soft infrastructure project that is being implemented across several EAC countries and will greatly improve the flow of goods in the region by consolidating customs procedures at the region’s borders.
In spite of the progress being made through regional integration, significant barriers and bottlenecks to trade in East Africa remain. East African countries have taken steps toward eliminating non-tariff trade barriers (NTBs), but numerous NTBs that hamper regional and international trade still exist. Moreover, major bottlenecks remain, many of which are related to limited rail and road networks and insufficient maritime infrastructure. However, they are also related to soft infrastructure gaps, such as the need to modernize and standardize customs processes and the uneven observation of the World Customs Organization (WCO) Immediate Release Guidelines.