Since the establishment of the East African Community (EAC), the region has seen a steady strengthening of economic and political ties. Despite this, available trade statistics paint a mixed picture about the impact of the EAC on intra-regional trade. Although the establishment of the EAC coincided with an important expansion in intra-regional trade in absolute terms, overall intra-EAC exports did not grow as a share of the region’s total exports. In addition, the persistence of non-tariff barriers still affects trade flows, and reduces the benefits to be gained from the regional integration process.
Promoting trade is typically associated with tariff reduction or tariff removal, but many studies have also highlighted the fundamental role of trade facilitation in strengthening trading relationships. Trade facilitation is particularly relevant for regions that have historically suffered from high internal transport costs, such as sub-Saharan Africa. This paper examines the channels through which trade facilitation efforts can reduce the price for transporting goods between countries in East Africa.
• Using a combination of qualitative and quantitative data from primary and secondary sources, this study gives a detailed account of the market structure of trucking services on a key trading route between Mombasa and Kampala and examines its impact on the price of trucking services.
• Trucking services on this route are already provided on a competitive basis, and increased trade facilitation would lead to even lower transport prices.
• In total, transport prices could fall by as much as 30% from their current levels through trade facilitation measures that reduce transit time and costs to a minimum
This paper was prepared under the project, ‘Resolving the unresolved non-tariff barriers in the East African Community’, which was funded by the East Africa Research Fund.
Read the full working paper here.