Regional Economic News By Leo Odera Omolo
DESPITE of petty squabbles her and there on some issues which looked rather trivial, trade between East African Community’s five member countries is steadily increasing paving the way for quicker formation of a common market.
According to statistics recently released by the Arusha based EAC secretariat show that the region proposal of investment and job creation is projected to increase.
Overall, the EAC recorded an average of real growth of 6.8 per cent in 2007 and an average per capita income of USD 424.
Kenya which is the economic powerhouse of the region registered USD 725.5,Uganda USD 473,Tanzania USD 440,Rwanda USD 365 and Burundi USD 119.
Total growth for the region was USD 491 million in 2007, compared with USD 52,328 million in 2006.The figures for the year 2008 are yet to be made public.
The average annual underlying inflation rate increased to 7.6 per cent in 2007, from 5.4 per cent in 2006.The highest increase was in food prices. On average EAC’s fiscal deficit, excluding grants, as a ration of GDP, rose from 9.4 per cent in 2006 to 11.1 per cent in 2007.
These figures are likely to drop to subsequent years because of the on-going global economic recssi0on.
In 2003,tourism grew an average 12.5 per cent down from 13 per cent in 2006.Coffee production in the region has been on the decline since 2003, while tea production has risen tremendously.
In 2003-2007, there was a decline in hydropower generation as a proportion of total generation.
The decline has been offset by a gradual rise in thermal power generation in the region, while investment in mineral exploration declined from USD 72 million in 2005 to USD 13.7 million in 2007.
The survey by the EAC secretariat forecasts deeper integration of the region. Total intra-EAC trade has grown from USD 1,526 million in 2004 to USD 1,973 million in 2007.
Uganda’s exports to Kenya have increased from USD 14 million in 2004 to USD 110 in 2005.Tanzania’s exports to Kenya in the same period under review grew from USD 27 million to USD 127 million in 2007.
Uganda and Kenya had registered a revenue growth of 32 per cent Tanzania 35 per cent.
According to data on inward investment from EAC shows that from 2005 to 2006 ,the total investment flows among partner states increased in number and value of projects.
Cross border investment indicates predictability of policy and confidence among the five countries, especially when customs tariff on imports and exports are completely removed.
East African leaders say deeper integration will be enhanced by political will globalization, strengthening of small economies and expansion of markets to avoid marginalization.
Integration will be beneficial since it will create trade and improve welfare and industrial development.
Infra-EAC trade is still long way to go, despite growing from 6.5 per cent in 2005 to 41.3 per cent in 2007. For instance, Tanzania sources between 5.6 per cent and 5.7 per cent of its imports from the region. It sourced 1.3 per cent and 1.5 per cent of its imports from EAC in 2007, of which 97 per cent are f rom Kenya.
Kenya is the least depended to imports from the region. It sourced 1.3 per cent and 1.5 per cent of its imports from EAC in 2007.
Uganda sourced 15 and 37 per cent of its imports from EAC, 97 per cent of it from Kenya.
Ends
leooderaomolo@yahoo.com

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Date: Wed, 1 Apr 2009 07:37:31 -0700 [04/01/2009 09:37:31 AM CDT]
From: Leo Odera Omolo
Subject: INTRAREGIONAL TRADE AMONG THE EAST AFRICAN COMMUNITY COUNTRIES UP BY SIX PER CENT IN 2007 ON A PROMISING NOTE TO FURTHER UPWARD TREND.