Rising Exports, Narrowing Deficits, and Strategic Growth to 2030
The East African Community (EAC) has demonstrated steady growth in international merchandise trade, reaching US$ 26.9 billion in Q1 2024—a 4% increase from the previous year—driven by a 12% rise in exports to US$ 11.3 billion and a slight 2% drop in imports to US$ 15.6 billion. This positive trend has helped reduce the trade deficit to US$ 4.2 billion, with major trade partners like China, UAE, and India contributing 45% of the region's trade volume. Projections to 2030 indicate sustained trade growth, potential export surpluses, and stronger intra-African trade, positioning the EAC as a vital player in the global market.
Total Trade Value:
The EAC traded goods worth US$ 26.9 billion with the rest of the world in Q1 2024.
This represents a 4% increase compared to US$ 25.9 billion in Q1 2023.
Exports and Imports:
Exports: Increased by 12%, rising from US$ 10.1 billion in Q1 2023 to US$ 11.3 billion in Q1 2024.
Imports: Slight decrease of 2%, from US$ 15.8 billion in Q1 2023 to US$ 15.6 billion in Q1 2024.
Trade Deficit:
The trade deficit narrowed to US$ 4.2 billion in Q1 2024 from US$ 5.7 billion in Q1 2023, mainly due to a rise in exports.
Top Trading Partners:
Major partners included China, UAE, and India, collectively accounting for 45% of the EAC’s total trade.
China led with trade valued at US$ 7.3 billion.
Intra-African Trade:
Trade with African countries totaled US$ 6.0 billion, making up 22.4% of EAC’s total trade.
Intra-EAC trade was US$ 3.3 billion, contributing 12.3% to the region's trade.
The growth in exports, narrowing trade deficit, and the EAC's trade reliance on key global partners and African neighbors.
Here is the forecast for the EAC's international merchandise trade from 2025 to 2030:
Year
Total Trade (billion USD)
Exports (billion USD)
Imports (billion USD)
Trade Deficit (billion USD)
2025
27.98
12.20
15.91
3.71
2026
29.10
13.18
16.23
3.05
2027
30.26
14.23
16.55
2.32
2028
31.47
15.37
16.89
1.51
2029
32.73
16.60
17.22
0.62
2030
34.04
17.93
17.57
-0.36
Key Points of the Forecast:
Total Trade: Projected to grow from US$ 27.98 billion in 2025 to US$ 34.04 billion by 2030.
Exports: Expected to nearly double, reaching US$ 17.93 billion by 2030.
Imports: Forecasted to increase more slowly, reaching US$ 17.57 billion by 2030.
Trade Deficit: Expected to narrow and turn into a slight trade surplus of US$ 0.36 billion by 2030 as export growth outpaces imports.
The forecast and recent trends in the EAC's international merchandise trade highlight several significant insights about the region's economic trajectory and trade dynamics:
Steady Growth in Trade: The projected steady growth in total trade (from US$ 26.9 billion in 2024 to US$ 34.04 billion by 2030) reflects a positive economic outlook for the EAC. This growth suggests that regional economies are likely to become more integrated with global markets, benefiting from increased exports and a stable demand for imports.
Expanding Export Capacity: The faster growth rate of exports (an average annual increase of 8%) indicates that the EAC is building stronger, competitive export sectors. This could be due to regional policies aimed at boosting manufacturing, agriculture, and value-added production to generate higher export volumes.
Trade Deficit Reduction: The narrowing trade deficit—projected to close by 2030—points to the EAC's gradual shift towards a more balanced trade profile. With exports expected to surpass imports by 2030, this shift reflects improvements in the region's productivity and self-reliance.
Dependence on Key Trade Partners: Trade relationships with major global economies like China, the UAE, and India (accounting for 45% of total trade) highlight a continued dependence on a few large partners. This dependence might expose the EAC to external shocks from these economies, underlining the importance of diversifying trade partnerships, especially within Africa.
Increasing Intra-African Trade Potential: With intra-African trade already contributing 22.4% of total trade, there is substantial potential for EAC countries to leverage the African Continental Free Trade Area (AfCFTA) to further strengthen regional trade networks. This could help reduce trade barriers, increase competitiveness, and support sustainable economic growth.
Economic Diversification and Resilience: The trends suggest that EAC countries are moving towards more resilient economic structures by growing exports and reducing trade imbalances. This diversification effort could lead to greater economic stability, improve the balance of payments, and reduce vulnerability to global economic changes.
EAC Regional Headline Inflation:
The annual Headline Inflation in the EAC region was 6.7% in March 2024, up from 4.1% in February 2024. This figure indicates a region-wide increase in general prices.
By Country:
Burundi: 26% headline inflation in 2023.
Kenya: 7.7% in 2023.
Rwanda: 12.2% in 2023.
South Sudan: High fluctuation at 22.5% as of March 2024.
Tanzania: 3.8% in 2023.
Uganda: 5.4% in 2023nual Average Headline Inflation**:
Annual Average Headline Inflation
For the EAC region, the annual average headline inflation for the fiscal year 2022/23 was 7.2%, up from 4.2% in the previous fiscal year.
By Country:
Burundi: 26.0% in 2023.
Kenya: 7.7%.
Rwanda: 12.2%.
South Sudan: 2.4%.
Tanzania: 3.8%.
Uganda: 5.4%.
Core Inflation:
Annual Core Inflation for the EAC region stood at 7.1% in March 2024, rising from 4.3% in February 2024.
By Country:
Burundi: 19.9% average in 2023.
Kenya: 5.9%.
Rwanda: 10%.
Tanzania: 2%.
Uganda: 4.7%.
South Sudan: 9.8%.
The East African Community (EAC) region is projected to experience gradual inflation stabilization through 2030, reflecting coordinated economic policies aimed at controlling price pressures. In 2023, the EAC’s headline inflation stood at 6.7%, with variations across member states, from a low of 3.8% in Tanzania to a high of 26% in Burundi. Forecasts indicate a decline across all EAC countries, with regional headline inflation expected to reach 5.8% by 2030. Significant reductions are anticipated for high-inflation economies, such as Burundi, projected to decrease to 14.5%, and South Sudan to 10.8%, supporting a more balanced and predictable economic environment in the EAC.
Headline Inflation: This forecast shows a gradual decrease in headline inflation across all EAC countries, with high-inflation economies like Burundi and South Sudan expected to make the most significant adjustments. This trend suggests improved economic stability, with lower inflation benefiting household purchasing power and business predictability.
EAC Region: Reduction from 6.7% to 5.8% reflects region-wide stabilization efforts.
Burundi: A sharp decline from 26% to 14.5% indicates ambitious policy interventions.
Tanzania: Remains the most stable, showing minimal fluctuation, reflecting sound inflation management.
Annual Average Headline Inflation: Annual average inflation also reflects a gradual decline, with all countries, especially Burundi and South Sudan, aiming for more moderate rates. The EAC region is projected to ease from 7.2% in 2023 to 6.3% by 2030, showing collective efforts toward reducing inflationary pressures.
Burundi and South Sudan: Show high initial inflation but strong projected declines, indicating substantial adjustments.
Kenya and Uganda: Project smaller declines, signifying their comparatively stable inflation environment.
Core Inflation: Core inflation, which excludes volatile items like food and fuel, is expected to decline steadily. This trend indicates improvements in price stability for essential goods and services across the region.
Burundi: High core inflation (19.9%) is projected to halve by 2030, suggesting strong measures to control price instability.
EAC Region: The reduction from 7.1% to 5.7% shows a region-wide commitment to stable core prices.
Tanzania and Uganda: Project relatively stable and low core inflation, indicating well-managed inflation policies.
The forecasted headline inflation for each EAC country and the region through 2030
The forecasted headline inflation trends for each EAC country through 2030 show a gradual decline across the region, reflecting stabilization efforts:
EAC Region: Inflation is expected to reduce from 6.7% in 2023 to 5.8% by 2030, indicating a steady regional stabilization.
Burundi: Starting from a high of 26% in 2023, inflation is projected to decrease significantly to 14.5% by 2030, due to anticipated economic adjustments.
Kenya: Moderate declines are forecasted, with inflation reducing slightly from 7.7% in 2023 to 7.2% by 2030, suggesting a relatively stable inflation rate.
Rwanda: Expected to see a gradual decline from 12.2% in 2023 to 9.9% by 2030 as price pressures ease.
South Sudan: Volatile inflation is set to decrease from 22.5% in 2023 to 10.8% by 2030, reflecting significant economic stabilization efforts.
Tanzania: Remaining stable, inflation is forecasted to stay around 3.7% throughout the period, reflecting consistent economic stability.
Uganda: Inflation is expected to gradually decline from 5.4% in 2023 to 4.7% by 2030, indicating a steady control over price levels.
Year
EAC Region
Burundi
Kenya
Rwanda
South Sudan
Tanzania
Uganda
2023
6.7%
26.0%
7.7%
12.2%
22.5%
3.8%
5.4%
2024
6.6%
23.9%
7.6%
11.8%
20.3%
3.8%
5.3%
2025
6.4%
22.0%
7.5%
11.5%
18.2%
3.8%
5.2%
2026
6.3%
20.3%
7.5%
11.1%
16.4%
3.7%
5.1%
2027
6.2%
18.6%
7.4%
10.8%
14.8%
3.7%
5.0%
2028
6.1%
17.1%
7.3%
10.5%
13.3%
3.7%
4.9%
2029
5.9%
15.8%
7.2%
10.2%
12.0%
3.7%
4.8%
2030
5.8%
14.5%
7.2%
9.9%
10.8%
3.7%
4.7%
Annual Average Headline Inflation Forecast for each EAC country and the region through 2030
The projected Annual Average Headline Inflation for each East African Community (EAC) country and the region through 2030 shows a gradual reduction in inflation rates, with stabilization in most countries as economic policies are anticipated to moderate inflationary pressures:
EAC Region: Starting at 7.2% in 2023, inflation is expected to slowly decline to 6.3% by 2030, reflecting regional efforts to stabilize prices.
Burundi: With the highest initial inflation of 26.0% in 2023, Burundi's rate is projected to decrease significantly, reaching 14.5% by 2030, due to aggressive measures to curb inflation.
Kenya: Kenya’s inflation is relatively stable, moving from 7.7% in 2023 to 7.2% by 2030, showing a slight reduction as inflationary pressures ease.
Rwanda: Starting at 12.2% in 2023, Rwanda’s inflation is forecasted to drop to 9.9% by 2030, as price growth stabilizes.
South Sudan: With a volatile starting rate of 2.4% in 2023, South Sudan’s inflation is expected to decline gradually to 1.6% by 2030.
Tanzania: Starting with a low rate of 3.8% in 2023, Tanzania’s inflation is projected to remain steady, reaching 3.7% by 2030, indicating ongoing price stability.
Uganda: Inflation in Uganda begins at 5.4% in 2023, decreasing gradually to 4.7% by 2030 as inflation moderates in line with regional trends.
Year
EAC Region
Burundi
Kenya
Rwanda
South Sudan
Tanzania
Uganda
2023
7.2%
26.0%
7.7%
12.2%
2.4%
3.8%
5.4%
2024
7.1%
23.9%
7.6%
11.8%
2.3%
3.8%
5.3%
2025
6.9%
22.0%
7.5%
11.5%
2.1%
3.8%
5.2%
2026
6.8%
20.3%
7.5%
11.1%
2.0%
3.7%
5.1%
2027
6.6%
18.6%
7.4%
10.8%
1.9%
3.7%
5.0%
2028
6.5%
17.1%
7.3%
10.5%
1.8%
3.7%
4.9%
2029
6.4%
15.8%
7.2%
10.2%
1.7%
3.7%
4.8%
2030
6.3%
14.5%
7.2%
9.9%
1.6%
3.7%
4.7%
Core Inflation Forecast for each EAC country and the region through 2030
The core inflation forecast for the EAC region and each country through 2030 reflects a gradual reduction in inflation rates as countries aim for economic stabilization:
EAC Region: Core inflation is expected to reduce from 7.1% in 2023 to 5.7% by 2030, indicating an overall decline in price volatility across the region.
Burundi: Starting at a high of 19.9% in 2023, core inflation is projected to decrease significantly to 10.3% by 2030, reflecting efforts to control extreme inflation.
Kenya: A gradual decrease is forecasted from 5.9% in 2023 to 5.1% by 2030, showing moderate inflation stability.
Rwanda: Core inflation is expected to decrease from 10.0% in 2023 to 7.5% in 2030, suggesting improvement but a slower decline.
South Sudan: High initial volatility at 9.8% in 2023 is projected to decline to 5.9% by 2030, aiming for more stability.
Tanzania: Core inflation remains relatively stable, slightly declining from 2.0% in 2023 to 1.9% by 2030, indicating a well-managed inflation rate.
Uganda: Projected to decrease from 4.7% in 2023 to 3.8% by 2030, showing a steady inflation management path.
