Effects of East Africa Community Intergration Initiatives on Trade Volumes in the Region

Abstract

Regional integration is a strategy geared towards achieving collaboration among the region member states to realize a number of objectives. The East African Community through regional integration has put in place a number of trade facilitation initiatives that include: business flexibility, improvement in operations, adopting of regional standards and efficiency. The study sought to determine the effect of EAC integration initiatives on trade volumes in the region. The study was anchored on country similarity theory, comparative advantage theory and economic integration theory. The research was guided with two objectives namely: to establish the rating of integration initiatives towards trade facilitation in the EAC in the past five years and to establish the relationship between the EAC integration trade facilitation initiatives and the region’s trade volumes. The research adopted a descriptive cross sectional survey. The EAC was the population of study and purposive sampling was used to identify the respondents. The data analyzed was gathered using close ended questionnaires. The results were analyzed using descriptive statistics and regression model and presented using tables. The findings indicated that EAC integrations initiatives have a high rating in the following order: the initiatives that facilitate faster operations, followed by efficiency facilitating initiatives, then initiatives that relate to standard procedures and lastly those that enhance flexibility. The effect of EAC integration initiatives test against trade volumes revealed that the initiatives that enhance operations, efficiency and standards are positively related to trade volumes while flexibility enhancing initiatives are negatively related to trade volumes in the region. The EAC should improve further on implementation framework of integration initiatives that relate to standards, operations and efficiency. There is need to interrogate the reason for minimal success in implementation of flexibility initiatives. The EAC member states should also strengthen their integration initiatives in setting up uniform customs standards and structures, streamlining operations and also consider putting in place incentives for efficient players in the logistics chain. This will contribute to realization of increase in trade volumes and thus spur regional growth. Owing to time constraints and resource limitation, a further study on the same is recommended with a focus on the business operators.