EAC youth urged to tap growing regional trade
Young people and traders across the East African Community (EAC) have been urged to tap the region’s expanded market size of 300 million people and a potential $450 billion (Sh55.6 trillion) in terms of goods and services.
Peter Mathuki, EAC Secretary General said that enhanced regional integration has increased intra-regional trade and services hub, which means youths will play a key role in the growth.
“In the last two to three years, intra-regional trade was at $6 billion but now it has increased to $10 billion amongst themselves,” he told Business Hub in Nairobi, adding however that this can only be achieved with peace and tranquillity in the region.
With the onboarding of the Democratic Republic of Congo (DR Congo) which sits next to the Atlantic Ocean, the region is now a corridor that enjoins landlocked Uganda, Rwanda, Burundi and South Sudan, and crosses over to Tanzania and Kenya which links the Indian Ocean.
With plans to have a “common currency in the next three years”, coupled with the huge potential of the region a source of minerals, massive freshwater lakes, mountains and a youthful population, these are key pointers to the high potential of the economic bloc, however, all this can only help if there is free movement of people and trade barriers end.
Coming more than two decades of attempts to make the region a federation, Mathuki said that by leveraging trade and security as key pillars of growth, increasing trade ties and decreasing trade and non-trade barriers spur more direct investments.
“It makes the region very competitive and increases the appeal from investors. They are looking at a gross domestic product (GDP) of between $350 billion to $450 billion,” he added.
Terming the current intra-EAC trade low, Mathuki said this will grow by 50 per cent in the next five years, noting that EAC’s trade with the rest of the world which stood at about $61.2 billion in 2021 should be tapped by more local traders.
Giving the example of DR Congo, he said the country’s trade with China is about 40 per cent while trade with East Africa is a meagre 13 per cent, despite being in the same trade bloc.
Top banks and manufacturers already eyed top ticket business deals in the region, especially the newly opened regions, the focus has now turned to the micro, small and medium enterprises (MSMEs) and the youths to spur growth.
With more than 70 per cent of the economies being driven by MSMEs and with a youth bulge in the region - whereby a large share of the population comprises children and young adults - the Secretary-General said youths must be prepared to tap opportunities in the services sector through proper education.
The EAC is working with government and investors, including East Africans living in the Diaspora, to increase opportunities that will pool funds for growth in the region. “Countries have grown faster by putting aside funds targeting youths and MSMEs and Kenya, for example, is doing a good job in that,” he said.
“Governments must create platforms for MSMEs to get cheaper funds and proper legal processing to enable them to compete in regional development.”
This includes training and exhibitions in the region to ensure that the MEMEs and youths get to know the opportunities in the eight countries.
Among other rafts of measures the region is banking on to ease the cost of doing business includes a planned railway that connects all the countries through Kenya, Tanzania and DR Congo.