East Africa businesses urged to build regional value chains to unlock AfCFTA market

East African businesses have been urged to strengthen regional value chains and embrace value addition to tap into the African Continental Free Trade Area (AfCFTA), as the East African Business Council (EABC) launched a two-day business clinic aimed at preparing firms to access the continent's 1.3 billion consumer market.

The training, supported by the African Development Bank (AfDB) through the Fund for African Private Sector Assistance (FAPA), brings together more than 50 enterprises in the textile, leather and edible oil value chains to equip them with practical knowledge on Rules of Origin, tariff concessions, customs procedures, trade facilitation tools and export requirements under the AfCFTA.

Speaking during the opening session, EABC–AfDB Project Steering Committee Chair and BIDCO Africa Chairman Dr. Vimal Shah said East Africa must shift from exporting raw materials to producing value-added goods if it is to benefit from the free trade agreement.

"Potential does not put food or money onto your tables. It's got to be looked at how we harness it," said Dr. Shah.

He noted that despite the region's abundant resources, East Africa continues to rely heavily on imported manufactured products.

In 2023, EAC Partner States exported apparel worth USD 165 million (Ksh.21 billion) while importing USD 338 million (Ksh.43 billion), and imported USD 1.5 billion (Ksh.194 billion) worth of vegetable oils and fats against exports of just USD 277 million (Ksh.35 billion).

The leather sector also captures less than one per cent of global leather exports despite the region accounting for four percent of the world's cattle population.

Dr. Shah said stronger regional value chains would enable countries to specialise in different stages of production, creating jobs and increasing the region's competitiveness.

"If there was a cotton farmer in Tanzania, a textile mill in Kenya and garment manufacturing in Uganda, that's regional integration. That's what we can do better, but that's not happening today," he said.

EABC Trade and Policy Advisor Adrian Njau said the business clinic is designed to move companies "from market intelligence to market access" by helping them understand export procedures and compliance requirements under the AfCFTA.

"We are trying to build the capacity of the stakeholders from the three sectors where they can be able to make sure that they are ready to export their products using this agreement," said Njau.

He added that EABC, as the onboarding agent for the Afreximbank Africa Trade Gateway, will help businesses access business-to-business matchmaking, market intelligence and trade finance solutions to expand trade across Africa.

Njau said limited market intelligence, high logistics costs, regulatory differences, skills gaps and low processing capacity remain major obstacles to intra-African trade despite more than 50 African countries having signed the AfCFTA.

The initiative supports the EAC Industrialisation Strategy 2012–2032, which aims to increase the local value-added content of resource-based exports from 8.6 per cent to 40 percent and raise intra-regional manufacturing exports from 5 per cent to 25 per cent by 2032.

According to the International Trade Centre's Export Potential Map, East African businesses have untapped export opportunities worth USD 298 million (Ksh.39 billion) for apparel and textiles in South Africa, USD 63 million (Ksh.8 billion) for vegetable oils and fats in India, and USD 17 million (Ksh.2.2 billion) for leather products in Uganda.