Non-tariff barriers, border delays, high logistics costs and fragmented regulations are however a challenge. East African Business Council executive director, Ahmed Farah /HANDOUT KENYAN businesses are pushing for urgent reforms to unlock the East African Community (EAC) market.
This, as they warn that non-tariff barriers, border delays, high logistics costs and fragmented regulations are undermining the region’s potential to become a major investment and production hub. The call emerged from the CEOs–Trade and Investment Roundtable held in Nairobi, where business leaders and policymakers said East Africa’s estimated $400 billion (Sh51.7 trillion) economy presents a significant growth opportunity for Kenyan companies seeking to expand beyond the domestic market.
East African Business Council (EABC) executive director, Ahmed Farah, said the regional bloc should be viewed as Kenya’s next major growth frontier. With intra-EAC trade at about $19.7 billion (Sh2.5 trillion), representing roughly 12.5 per cent of total EAC trade, Farah said there was considerable room to expand commerce, investment and production across the region.
“Our priority must be to make the EAC a more competitive and predictable market for business,” Farah said, calling for the removal of non-tariff barriers, harmonisation of standards, lower logistics costs and consistent implementation of regional commitments. The private sector argues that improving regional integration could allow Kenyan manufacturers and service providers to access a much larger consumer base while encouraging investment in regional value chains.
Kenya Investment Authority (KenInvest) CEO John Mwendwa said East Africa is already attracting a significant share of investment flowing into the continent. According to figures cited at the meeting from a recent UNCTAD report, Africa attracted about $70 billion in foreign direct investment, with East Africa receiving approximately $14.6 billion, equivalent to about 21 per cent of the continental inflows.
Mwendwa said investors are looking for scale, predictability, talent, market access and opportunities to participate in regional value chains.