Efforts to deepen East Africa’s economic integration are unraveling, eight years after a landmark law promised to eliminate non-tariff barriers (NTBs) across the region.
Rising protectionism, regulatory defiance, and unresolved political tensions are hindering the East African Community’s (EAC) vision of a seamless common market, eroding investor confidence and disrupting regional supply chains.
Law on Paper, Barriers in Practice
At the heart of the gridlock is the East African Community Elimination of Non-Tariff Barriers Act, passed in 2017 with the goal of unifying trade protocols among member states. Despite its ratification by heads of state, enforcement remains inconsistent. Trade flows continue to be hampered by ad-hoc tariffs, customs delays, and opaque border rules—contradicting the Act’s original promise of frictionless commerce.
“The law remains more aspirational than operational,” said Prof. Apolo Mbabazi, a regional integration analyst based in Kampala. “Every member is pursuing national interest under the cloak of regionalism.”
Economic nationalism and a fear of market domination have prompted member states to adopt defensive postures, despite established regulatory frameworks designed to facilitate free trade. Kenya and Rwanda, the region’s leading economies, often evoke unease among other members who perceive them as potential threats to local industries.
According to the Kenya National Bureau of Statistics, Kenya’s exports to EAC neighbours reached KSh 102.69 billion between January and September 2019, marking a 5.77% year-on-year increase. Rwanda accounted for a notable 25.06% increase, totalling nearly KSh16.89 billion. Such disparities fuel anxieties over trade imbalances, prompting retaliatory measures that are often disguised as consumer protection or revenue generation.
“The uneven distribution of economic gains has exacerbated protectionist tendencies,” notes Dr Elias Mwangi, Senior Economist at the African Development Bank (ADB). “Countries with smaller economies fear marginalisation, inadvertently compromising regional growth.”
Reciprocal Accusations Erode Trade Trust
Mutual allegations of unfair trading practices are frequent. Uganda’s Trade Minister, Amelia Kyambadde, publicly criticised Kenya in January 2020, demanding a resolution within 14 days over Ugandan products seized by Kenyan authorities and labelled as counterfeits. Although counterfeit concerns are legitimate, the actions were viewed by Uganda as protectionist, given Kenya’s significant trade surplus.
Conversely, Kenyan manufacturers accuse the Ugandan and Tanzanian authorities of imposing “punitive taxes” that are inconsistent with EAC Customs Union protocols. The Kenya Association of Manufacturers (KAM) highlighted Tanzanian levies on Kenyan cigarettes as an example, citing taxes that are 80% above the agreed-upon rates.
“The persistence of punitive measures against Kenyan exports undermines regional integration,” emphasises KAM CEO Phyllis Wakiaga. “Compliance with EAC agreements must be enforced consistently to avoid undermining trust.”
Currency Divergence Amplifies Trade Frictions
The absence of a common regional currency further complicates cross-border transactions. The Kenyan shilling’s relative strength incentivises trade invoicing in Kenyan currency, disadvantaging partners with weaker currencies and prompting reliance on international benchmarks such as the US dollar.
“A unified currency remains politically sensitive but economically crucial,” argues Professor Edward Oduor, Chief Economist at Kenya’s Central Bank. “Until then, currency discrepancies will continue incentivising fragmented trade behaviours.”
Geopolitical Tensions Strain Economic Ties
Underlying political tensions compound economic hurdles. Border disputes, such as the contentious Migingo Island claim between Uganda and Kenya, persist, impacting local trade dynamics. Meanwhile, Rwanda’s accusations against Uganda for allegedly supporting opposition groups underscore deeper regional political fissures.
Tanzania’s stance on external debt and foreign-funded projects further isolates it from partners. Former President Magufuli’s rejection of expensive Chinese-backed infrastructure projects halted initiatives critical to trade facilitation, creating infrastructural asymmetries across the region.
Simultaneously, ongoing conflicts in Burundi and South Sudan present security and stability challenges, necessitating significant regional attention to peace-building rather than economic integration.
Lessons from ASEAN and the European Union
The Association of Southeast Asian Nations (ASEAN) and the European Union (EU) exemplify successful trade integration frameworks where regulatory consistency, conflict resolution mechanisms, and transparent trade policies have fostered economic stability. Both blocs demonstrate how consistent adherence to mutually agreed regulatory frameworks can build sustainable trust and collective economic prosperity.
“ASEAN’s incremental yet consistent integration approach offers critical lessons,” says Dr Mariam Issa, Regional Integration Specialist at the East African Business Council. “East Africa must embrace consistent regulatory adherence and robust conflict resolution mechanisms to achieve sustainable growth.”
Implications for Investors and Policymakers
Continued non-compliance with agreed regulations risks protracted disputes, investor uncertainty, and hindered economic development. Investors, wary of unpredictable regulatory environments, may divert capital toward more integrated markets, notably the Economic Community of West African States (ECOWAS) and the broader AfCFTA region.
“East Africa’s leaders must urgently reinforce legal and diplomatic commitments to the EAC Act,” asserts Ibrahim Adewale, Financial Analyst at Standard Chartered Bank. “Failure risks long-term regional economic stagnation and diminished global competitiveness.”
Charting a Path Forward
To overcome these integration hurdles, EAC member states must prioritise legal adherence, conflict resolution, and currency harmonisation strategies. Establishing a transparent dispute resolution framework modelled after ASEAN could provide clarity, while accelerating infrastructure investments can mitigate disparities exacerbated by uneven national development.
“Without substantial diplomatic and regulatory commitments, regional trade integration remains a distant ambition,” concludes Dr Mwangi. “Only strategic regional alignment can unlock East Africa’s true economic potential.”
