Tanzania and DRC Surpass Kenya as Top Consumers of Ugandan Merchandise
A new trend is emerging in the East African Community as Tanzania and the Democratic Republic of Congo are gradually becoming the largest consumers of Ugandan products, surpassing Kenya. This shift in trade dynamics is expected to have a significant impact on the usual trade disputes among EAC partner states.
Changing Trade Patterns
According to data from the Private Sector Foundation of Uganda (PSFU), Tanzania and DRC are now leading in consuming Ugandan merchandise on a country-specific level. This trend was highlighted during the Uganda edition of the East African Business Council (EABC)-CEOs-EAC Secretary General meeting held on November 6.
Mr. Humphrey Nzeyi, Chairman of PSFU, attributed this shift to the high inflation rates observed in Kenya and Rwanda, two traditionally major trading partners of Uganda. In September 2024, prices in Uganda, Kenya, and Rwanda decreased, with Kenya’s headline inflation at 3.6% and Rwanda’s at 0.8%, while Tanzania’s inflation remained stable.
Product Exports and Trade Tiffs
Uganda’s exports to EAC partner states include a variety of products such as sugar, edible oil, maize, beans, cement, and pharmaceuticals. These goods have sometimes led to trade disputes, particularly between Uganda and Kenya, as well as Uganda and Tanzania. The East African Community secretariat is working on policy interventions to address these challenges.
Despite Kenya being the leading destination for Uganda’s exports within the EAC, with revenues of $74.5 million in June 2024, Tanzania has been steadily increasing its imports from Uganda. This growth in trade with Tanzania threatens to displace Kenya from its top position as Uganda’s primary export destination.
Promoting Intra-Regional Trade
While highlighting the importance of intra-EAC trade, Mr. Nzeyi emphasized the need to eliminate Non-Tariff Barriers (NTBs) to enhance regional commerce. He noted that only 20% of the trade conducted within the EAC is global, indicating significant room for growth in intra-regional trade.
The EABC acting CEO, Mr. Adrian Njau, urged partner states to increase intra-regional trade, emphasizing the potential for improvement in trade relationships. The total exports from Uganda to EAC Partner States rose to $2.2 billion in 2023, while imports from EAC partners increased to $2.23 billion during the same period.
Looking Ahead
As the EAC aims to boost its trade volume and strengthen economic integration, active participation of the private sector is crucial. The EABC trade and investment report underscores the need for collaborative efforts to enhance intra-regional trade and position the EAC as a thriving economic bloc in Africa.
