The effect of regional integration on intra-regional trade flows in East Africa, a case of Uganda

Abstract

Regional Integration plays a key role in the trade flows of a country. East African Community (EAC) is a regional integration comprising Kenya, Uganda, Tanzania, Rwanda, Burundi, and South Sudan. This study examines the impact of EAC economic integration trade among its members with key focus on Uganda as a case study. This Research used secondary data with time series data for the years 2001 to 2020.There has been an argument that majority of the people in East Africa especially the business society are not aware of the benefits of being members of the EAC so I chose to analyze this using Uganda as my case study. The study used the Gravity model of international trade to analyze the effects of integration on intra-regional trade flows in East Africa. The findings show that the EAC economic integration has resulted in the positive impact on trade among and within its members through expansion of trade thus the economy at large. Subsequently, trade within and among EAC has increased due to harmonization and reduction in tariffs and non-barriers of trade due to the several protocols that were agreed on and put into place from 2001 to now. The regional competition continues to register increment after the integration as the economic growth of 6.5% is the best in Sub-Saharan Africa. The GDP trade share has increased with imports rising from 21% in 2000 to 28% in 2015 while exports came from 13% to 18% in the same period. Uganda is among the major beneficiaries of the integration with trade effects of 3.4% totaling $1241600 with a record increase of 26% in exports between 2001 and 2009 and imports doubling from USD 288b to USD 547b in the same period. Therefore, EAC economic integration has a positive influence on bilateral trade within and among its member states. Relevance to Development Studies This research will add more knowledge on how economic integration has impacted trade in Uganda hence be able to strategize better for its development. Based on this background, it’s quite important to analyze how these integrations affect each member country. Keywords East African Community, Regional Integration, bilateral trade, Non-Tariff Barriers, Trade creation, Customs Union, Common, Market, Gravity model of International Trade, Uganda