The total value of trade within the East African Community (EAC) grew to $31.6 billion in 2023 underscoring the benefits of regional integration. Both intra-EAC and continental trade volumes expanded significantly.
Although the trade balance remained negative, the overall deficit narrowed. Full recovery from the Covid-19 recessions has added impetus to the ongoing integration.
The proposed East African Federation would wield a larger economic weight in the Great Lakes region. It brings together Tanzania, Rwanda, Uganda, the Democratic Republic of Congo (DRC), Kenya, Somalia, South Sudan and Burundi spanning the continent from the Indian Ocean to the Atlantic.
The federation would become Africa’s most populous country with 302.2 million people. With a combined gross domestic product of $312.9 billion, it would be a force to reckon with.
Each of the eight member states in the confederacy is richly endowed.
The DRC is the undisputed leader in the extractives sector. Kenya has a vibrant financial and technology sector with companies expanding beyond its borders. Tanzania is one of the fastest growing economies in Africa with a steadily growing industrial base. For its part, despite its tumultuous past, Rwanda is synonymous with innovation.
The realisation of a single currency under the East African Monetary Union Protocol is expected to improve the business environment attracting foreign direct investment.
Member states will also be able to better control inflation. The integration provides an ample opportunity to develop the region.
However, the bloc must commit to end perennial conflicts which have bogged them down and impoverished their populations. Thanks to this instability, Somalia, South Sudan and Burundi are among the poorest countries in the world.
The situation is not any different in Congo’s resource-rich North Kivu province where Rwanda-backed M23 rebels have been reigning free and are now threatening to capture another key town following the fall of Goma.
Pacifying the region will enable these countries to reap their much-needed peace dividends. Borrowing from Uganda’s Parish Development Model, they must also help their subsistence farmers to transition into the money economy.
