US investors laud East Africa’s trade potential
East Africa ranks as one of the world’s most economically dynamic regions and offers enormous potential for investment by US companies, the US Chamber of Commerce has said.
Growth rates in some member states of the East African Community now rival those of a few of the Asian countries that Wall Street has touted as new emerging economies, the report issued Tuesday says.
Kenya’s per capita GDP has already climbed past that of Bangladesh and Pakistan, notes the report.
The report says trade with and within East Africa will be greatly facilitated by large-scale infrastructure projects now underway.
It cites the standard gauge railway linking most of the region’s landlocked states with Mombasa, and the Bagamoyo Port project in Tanzania, which is expected to be East Africa’s largest port when completed.
While US trade with the region doubled between 2010 and 2015, it remains marginal, the report says. It notes that China and the European Union have much more robust trading relationships with East Africa.
“Kenya, the United States’ leading trading partner in the region, imported 14 times as many goods from China than it did from the United States in 2014,” it says.
The EU imported three times as many goods from Kenya than did the US in 2014. The report warns that the EU will likely become even more competitive as a result of its Economic Partnership Agreement with the EAC that is expected to be ratified next year.
The US lacks a comparable reciprocal trade deal with the EAC, the Chamber notes, adding that several East African leaders have called for Washington to negotiate its own economic partnership pact with the trading bloc.
But the EAC has not done all it could to facilitate trade among its members and with the rest of the world, the report adds.
It points to various non-tariff barriers that remain in place within the EAC, including costly import licensing requirements and “uneven observation” of some World Trade Organisation guidelines.