The East African Community has long faced significant challenges in cross-border trade in services, hindering the region’s development and economic integration. In a bid to address these persistent barriers, the East African Business Council, in collaboration with GIZ and the European Union, has convened a regional consultative meeting aimed at fostering dialogue and creating effective mechanisms to enhance trade in services.
During the meeting, Stuart Mwesigwa, a board member of the East African Business Council, highlighted the key issues impacting the services sector within the region. He pointed out that the high cost of visa charges, exorbitant fees for work permits, and the high cost of movement are major obstacles impeding the growth of the sector.
“The cost of visas and work permits across the region remains significantly high, making it difficult for professionals and businesses to operate seamlessly. Additionally, the high cost of movement between member states continues to hinder regional integration. There is a need to strengthen the services sector by considering unified approaches such as a common East African airline and a single regional currency.”
In support of these initiatives, Sofian Dahmani, a delegate from the European Union, emphasized the EU’s commitment to boosting trade in services within the East African Community. Through a partnership with Germany, the EU has committed to a 27-billion-shilling project aimed at leveraging integration frameworks for trade in services and civil society organizations. Dahmani says the project will enhance export capabilities and strengthen trade relations between East Africa and the European Union.
“The European Union, in partnership with Germany, is investing in projects that enhance trade in services within the EAC. Our goal is to support local economies by leveraging integration frameworks, ultimately promoting sustainable development and strengthening trade relations between the region and the EU.”
However, cross-border trade in services continues to encounter significant regulatory challenges, posing far-reaching consequences for businesses and socio-economic welfare. A recent report by GIZ revealed a drastic drop in the enrollment of foreign students in UK universities, with a 53% decline recorded in the 2021/22 academic year and a further 8% drop in 2022/23. This decline has been attributed to changes in funding rules and visa requirements following Brexit.
Estella Aryada, a team lead from GIZ, underscored the importance of eliminating regulatory barriers to facilitate cross-border trade in services. She emphasized that addressing these challenges is crucial for fostering economic growth and enabling smoother trade relations within the East African region.
“To strengthen cross-border trade in services, we must remove regulatory barriers and streamline processes to enable businesses to operate more efficiently across the region. This will not only boost economic growth but also enhance the competitiveness of the East African Community on the global stage.”
As stakeholders continue to deliberate on solutions to these challenges, it remains evident that collaboration and commitment to integration are essential for fostering sustainable development in the East African Community.
