EAC commits to barrier-removal as intra-trade expands

Intra-regional trade in the East African Community (EAC) surged by 27%, from USD 14.2 billion to USD 18 billion between June 2024 and June 2025, as highlighted at the 25th MSMEs Trade Fair. Leaders used the forum to recommit to addressing trade barriers—non-tariff obstacles, customs delays, standards harmonisation—and to reinforce the role of micro, small and medium enterprises (MSMEs) in regional value chains. For institutional investors and development partners, this trade uptick marks a transition from rhetoric to measurable integration and presents a significant growth frontier.

The mechanism is trade-system reform plus MSME integration. MSMEs traditionally face the greatest friction at borders—documentation, customs, divergent standards, certification costs, and weak logistics. The EAC’s trade fair emphasised how policymakers saw MSMEs as the engine of regional trade: small firms produce inputs, intermediate goods and services across borders, but are often excluded from formal value chains. By focusing on MSMEs, the EAC builds bottom-up connectivity: lower trade costs, improved producer access, and stronger regional supply-chains. The 27% growth in intra-EAC trade reflects this systemic improvement.

From a macro-economic standpoint, increased regional trade improves resilience against external shocks. East Africa has experienced weaker export demand to traditional partners; boosting intra-regional trade reduces reliance on distant markets. The USD 18 billion trade volume represents a meaningful GDP contribution (especially in smaller economies). When MSMEs scale and gain cross-border access, labour productivity, export orientation and private-sector investment all receive structural boosts. For capital markets, participating in regional value-chains offers less developed-market risk and higher growth upside.

The policy narrative is moving from static integration (tariff reduction) to dynamic integration (supply-chain connectivity, MSME participation and trade-finance innovation). Barriers discussed at the trade fair—certification, logistics, digital customs, trade-finance access—are precisely the friction points institutional capital monitors. If the EAC resolves these, trade-cost savings will accumulate, merchant margins expand, and regional firms become investible.

However, execution remains important. Growth of 27% is impressive but off a moderate base. Sustaining this rate requires progressive infrastructure investment (roads, ports, ICT), harmonised regulation across member states and robust financing for cross-border trade. If one country lags (customs reforms, political instability, logistics bottlenecks), trade friction will resurface. Institutional capital will look for proof of continuity—not just one-off growth.

Forward-looking indicators include: growth of MSME cross-border transactions, reduction in average customs clearance times among EAC member states, volume of trade-finance issuance linked to regional trade, and the shift in export-destination mix from non-EAC to intra-EAC. If MSMEs account for a rising share of trade value and customs delays shrink from, say, five days to one, the integration thesis will be validated.

In conclusion, the EAC’s trade-growth story is maturing. The 25th MSMEs Trade Fair reaffirmed regional leadership’s commitment to tangible reforms and trade-system deepening. For investors seeking growth in Africa, intra-EAC trade presents a compelling niche where reform, MSME participation and value-chain integration converge.