How Kenya and EAC partners are losing trade with DR Congo

Opportunities worth billions of shillings for local businesses could be slipping away from them as trade between Kenya and the Democratic Republic of Congo (DRC) shrinks.

A new report on trade between East African Community (EAC) countries and DRC shows that despite the huge opportunities that the country presents, particularly because of its proximity, regional partners have been edged out by other countries.

DRC, which has recently applied to join the EAC, has 81 million people, offering a vast market for manufactured goods and other produce.

However, despite it sharing borders with five of the six EAC countries (Kenya is the only one left out), trade with the region is paltry, according to the report by the East African Business Council (EABC).

Other than modest increases in exports to the country by Rwanda and Uganda, the other EAC countries have in the recent past registered a decline in their trade volumes with DRC.

“The findings reveal that trade flows from the EAC into the DRC are declining, with the exception of exports from Rwanda and Uganda,” said the report released on Thursday.

Kenya registered an 11 per cent decline in the value of goods to DRC last year. The report shows a sustained declining trend since 2014, when exports peaked at $239.38 million (Sh25.85 billion) before dropping to $132 million (Sh14 billion) in 2018.

“DRC presents a huge trade opportunity. With a population of approximately 81 million people, it holds almost half of the population of the EAC member states and is thus a huge market,” said the report.

“So far, almost half of the trade between the DRC and the EAC is informal, implying that the potential for trade hasn’t been optimised.”

China and South Africa account for 47 per cent of DRC’s imports. The report notes that what comes from the two countries could easily be found in EAC.

Given its geographic and even psychic proximity, the report said, the EAC is better placed to supply most of the DRC’s imports.

During the launch of the study, EABC Chief Executive Peter Mathuki said the admission of DRC into the regional bloc could increase trade with the country as EAC can ably supply goods.

“DRC will benefit from the larger EAC Common Market and Common External Tariff framework. It will also have access to sea ports of Mombasa and Dar es Salaam at competitive rates,” he said.

“Their huge population also provides a vast opportunity for SMEs from the region.”

Credit: Source link