Trade barriers such as double taxation and protectionist policies continue to slow intra-African trade despite East Africa’s promising economic outlook. Business leaders, including RSM East Africa Chairperson Ashif Kassam and East African Business Council (EABC) officials, are calling for stronger public-private partnerships and policy harmonization to unlock the region’s trade potential.
The East African Community (EAC) economy is projected to grow at an average rate of 5.7 percent in 2025, driven by the services, tourism, and transport sectors.
However, businesses warn that restrictive trade policies within the EAC are reducing competitiveness and deterring foreign investment. The EABC is pushing for the fast-tracking of the Double Taxation Agreement (DTA), signed in 2010, to promote cross-border trade and investment. So far, only Rwanda and Uganda have ratified the agreement.
Kassam criticized the slow progress in implementing a unified taxation framework, highlighting that while EAC countries have multiple tax treaties with external partners, they lack a simple intra-regional double-tax treaty. “Each of the East African countries has multiple tax treaties with other nations, yet we still lack a simple double-tax treaty among ourselves,” he said.
He suggested forming a “coalition of the willing” to allow ready countries to proceed instead of waiting for all EAC members to agree.He also pointed to an imbalance in economic growth, with infrastructure investment—mainly driven by public sector spending—expanding, while private sector growth has slowed. “A decade ago, 70-80 percent of East Africa’s growth came from the private sector. Today, nearly 60-70 percent comes from the public sector, which, while important, does not significantly expand the tax base,” he explained.
Kassam emphasized the need for self-reliance in manufacturing and local production, citing opportunities in the leather and furniture industries. “East Africa produces 11 million hides and skins annually, enough to manufacture 300 million pairs of shoes.
We should be net exporters, not importers,” he said. Plans are also underway to ban furniture imports to boost local industries.
EABC Acting Executive Director Adrian Njau noted that while intra-EAC exports have grown from 17 percent of total exports in 2017 to 21 percent in 2023, reaching USD 6.3 billion, the share of intra-EAC trade to total trade remains stagnant at 15 percent.
He urged EAC governments to fully implement commitments under the Common Market and Customs Union to maximize the region’s trade potential, estimated at $1.9 billion under the African Continental Free Trade Area (AfCFTA).
The AfCFTA presents both opportunities and challenges, offering a wider market but increasing competition. “With Africa contributing only 3 percent to the global GDP, we must use this moment to strengthen our internal markets, streamline logistics, and make East Africa an attractive investment destination,” Njau said.
Business leaders continue to push for policy reforms that will enhance competitiveness, reduce trade barriers, and accelerate economic integration in East Africa.
