(3 minutes read)
- The World Bank’s 2020 ‘Global Economic Prospects’ projects 2.9% growth for sub Saharan Africa
- East African Business Summit recommendations to boost intra-EAC trade from the current 12 percent to 24 per cent
The World Bank’s 2020 ‘Global Economic Prospects’ has projected a weak economic growth forecast for sub Saharan Africa in general and East Africa in particular. The forecast of 2.9 percent growth this year is based on the lower expectations of demand from key trading partners, softer commodity prices and adverse domestic developments in several countries. However, for the East African Community(EAC), the challenges are even more, due to low intra trade, leading to large expenditure on imports from outside the region. The outflow of foreign exchange on imports is expected to slow down manufacturing and job creation.
Boosting intra-East African Community trade has been the top priority of the regional private sector-led East African Business Council (EABC). The East African Business and Investment Summit which met in November took stock of EAC achievements for the past 20 years. The summit noted that in spite of being one of Africa’s fastest-growing regional blocs, and the various resolutions passed to facilitate intra-trade, the region faced many challenges. Chairman of the EAC Council of Ministers and Rwanda’s Minister for Foreign Affairs and International Co-operation Dr Vincent Biruta pointed out that many steps were taken to promote intra trade within the East Africa Region. “Mechanisms for resolving Non-tariff barriers(NTB) were put in place, for instance, the national monitoring committees and regional forum have been established to monitor the elimination of NTBs quarterly. EABC chief executive Dr. Peter Mathuki attributed the lack of momentum to persistent non-tariff barriers, pressure from cheaper imports, high cost of doing business, domestic tax regimes, infrastructure bottlenecks, deficient skills and technology and high cost of finance. He felt that the private sector has to reach out to the government and work on getting rid of NTBs. It is proposed to submit the resolutions of the High-Level East African Business Summit to the Heads of State summit. The Summit reportedly has come up with a series of recommendations aimed at raising the intra-EAC trade from the current 12 percent to 24 per cent in the next five years and eventually to 40 per cent.
