ARUSHA — June 16, 2026
East African businesses are navigating a landscape of remarkable opportunity and significant headwinds. The region is projected to remain Africa’s fastest-growing, with growth moderating from 6.6 percent in 2025 to 5.9 percent in 2026 due to Middle East disruptions, before rebounding to 6.4 percent in 2027 . While geopolitical tensions, supply chain disruptions, and rising energy costs pose challenges, the EAC is strengthening its internal market, eliminating trade barriers, and forging new international partnerships to sustain momentum.
Part 1: Economic Outlook — Regional Growth Amid Global Uncertainty
Despite global turbulence, East Africa continues to outperform other African regions . According to the African Development Bank’s 2026 African Economic Outlook, 21 African countries are expected to record growth above 5 percent in 2027, with several East African nations among the strongest performers .
Kenya is projected to grow by 4.6 percent in 2026, constrained by elevated energy costs and supply disruptions . Tanzania is expected to grow by 5.4 percent, supported by infrastructure investment and structural reforms, while the Bank of Tanzania maintains growth expectations around 6 percent .
Uganda is set to be the region’s fastest-growing economy, with growth projected at 6.2 percent in 2026 and accelerating to 8 percent in 2027 as commercial oil production begins . Rwanda is projected to grow by 7.0 percent in 2026 and 7.4 percent in 2027 .
Yet the AfDB warns that “GDP per capita growth remains low, meaning growth is not yet translating sufficiently into jobs, productivity, and structural transformation” . Inflation is projected to ease from 13.8 percent in 2025 to 10.4 percent in 2026, while debt servicing continues to tighten fiscal space across the continent .
Part 2: Trade Performance — Record Gains
The EAC is recording significant trade gains. Exports rose by 37.7 percent to USD 77 billion, while imports increased by 15.4 percent to USD 79.6 billion . Intra-African trade grew by 40.1 percent to USD 39 billion, accounting for 25.2 percent of total trade, while intra-EAC trade expanded by 28 percent, reflecting strengthening regional linkages .
At a recent NCBA Trade Commissioner forum, stakeholders explored sector-driven entry strategies into East Africa’s fast-expanding trade economy, focusing on agribusiness, energy, manufacturing, fintech, technology, healthcare, and education as key investment entry points .
Part 3: Singapore FTA — A Gateway to ASEAN
The most significant external development this month is Singapore’s announcement that it will commence negotiations on a free trade agreement with the EAC—the city-state’s first such agreement with an African partner .
Speaking during his state visit to Tanzania, Singaporean President Tharman Shanmugaratnam emphasized that the agreement will connect Singapore with all eight EAC members: Burundi, the DRC, Kenya, Rwanda, Somalia, South Sudan, Tanzania, and Uganda .
The FTA “comes at a timely moment as countries seek to diversify trade networks amid current global geopolitical tensions,” Shanmugaratnam said . Beyond traditional sectors, the agreement could open cooperation in the digital economy and emerging technologies, while providing East African exporters with a gateway to the larger ASEAN market .
The EAC Sectoral Council on Trade has endorsed continued engagement with Singapore and directed the Secretariat to undertake technical preparatory work, including an initial negotiation framework .
Part 4: Customs and Trade Facilitation Reforms
On June 7, the EAC adopted strategic measures to strengthen regional trade and accelerate industrial development . The Sectoral Council welcomed the completion of Time Release Studies for the Northern and Central Corridors, confirming that closer collaboration among customs administrations has improved supply chain efficiency .
South Sudan has been onboarded into regional customs data-sharing arrangements. A structured framework for monitoring implementation of the EAC Customs Union Protocol was adopted, creating a systematic mechanism to assess Partner States’ compliance .
The Council also approved fiscal measures under the Common External Tariff framework, set to enter force on July 1, 2026 . These measures provide the legal and policy framework for tariff implementation across the region.
Part 5: Non-Tariff Barrier Elimination — A Renewed Push
The EAC is strengthening its legal framework governing the elimination of Non-Tariff Barriers, including mechanisms for sanctions and compensation where traders incur losses due to illegal taxes or unauthorized trade restrictions .
EAC Secretary General Amb. Stephen P. Mbundi emphasized that “to cushion the region against global shocks, we need a stronger internal market, a reduced cost of doing business, and faster implementation of regional integration commitments” .
The renewed focus on NTBs reflects recognition that while customs tariffs have been harmonized, hidden barriers continue to impede cross-border trade. The proposals will undergo comprehensive technical and legal review before adoption.
Part 6: Rules of Origin Review — Strengthening Regional Value Addition
The EAC Rules of Origin 2015 have been comprehensively reviewed after extensive consultations and approved by the Sectoral Council . This is a fundamental pillar of the Customs Union that determines eligibility for preferential tariff treatment within the region.
The review aims to strengthen regional value chains and reduce import dependence by ensuring that goods receiving preferential treatment genuinely originate within the EAC. Legal scrubbing is ongoing before implementation .
Part 7: EAC MSMEs Trade Fair — Focus on Leather and Horticulture
The 26th EAC Micro, Small and Medium Enterprises Trade Fair will be held in Kigali, Rwanda, from October 30 to November 8, 2026, with a focus on leather and horticulture value chains .
The leather sector demonstrates significant potential. Regional footwear demand rose from 130 million pairs in 2017 to nearly 290 million pairs in 2024, yet local production remains limited at around 17 million pairs—a major opportunity for industrial growth .
The horticulture sector remains vital, accounting for more than 25 percent of the region’s GDP. The Trade Fair will support technology adoption, compliance with quality standards, and stronger value chain linkages .
EAC Deputy Secretary General Annette Ssemuwemba noted that the event “will promote the consumption of locally produced goods as part of broader efforts to strengthen domestic industries and enhance regional competitiveness” . The EAC Quality Awards 2026 will be held alongside the Trade Fair.
Part 8: Kenya-Denmark Partnership — A Gateway to the Region
On June 5, the Kenya Private Sector Alliance (KEPSA) and the Danish Chamber of Commerce signed a strategic cooperation agreement to strengthen trade, investment, and business partnerships .
The agreement aims to enhance Danish companies’ access to Kenyan and East African markets through policy dialogue, business networking, trade facilitation, and market intelligence .
KEPSA CEO Carole Kariuki said the partnership “underscores Kenya’s growing position as a preferred investment destination and gateway to the East African region” . Danish Chamber of Commerce Vice-President Jakob Ellemann-Jensen described Kenya as “one of the most interesting growth markets in Africa right now, particularly in green energy, digitalization, life sciences and logistics” .
The partnership aligns with Denmark’s broader international development agenda and follows lessons from the Danish-Arab Partnership Programme in the Middle East and North Africa .
Part 9: The Investment Attraction — International Interest
East Africa is witnessing rising international interest in stronger economic partnerships. The EAC has noted “a growing number of countries seeking formal trade arrangements with the bloc” .
NCBA has engaged with more than 50 diplomatic missions, positioning the lender as a key conduit for foreign direct investment flows . Filippo Amato, Head of Trade and Economics at the EU Delegation to Kenya, said: “Public-private partnerships are essential in accelerating economic growth in the region. Together, these partnerships position East Africa as an attractive investment destination globally” .
NCBA Managing Director James Gossip noted: “Global trade is increasingly shaped by geopolitical uncertainty, supply chain disruptions, and shifting market dynamics. Strengthened collaboration among governments, diplomatic missions, investors, and financial institutions is essential to expanding market access” .
Part 10: The Year Ahead
As June 2026 progresses, several factors will shape East Africa’s business trajectory:
Geopolitical Stability: Rising energy costs linked to Middle East disruptions have moderated regional growth but are expected to ease as tensions stabilize .
Integration Implementation: The new Customs and trade facilitation measures adopted in June will begin delivering results as technical work continues through August and September .
Singapore FTA Negotiations: The proposed agreement with Singapore will advance through technical preparatory work, potentially opening new trade corridors to ASEAN markets .
MSME Trade Fair: The October event in Kigali will strengthen regional value chains in leather and horticulture, reducing import dependence .
Conclusion
East African business today is defined by resilience amid global uncertainty. Growth remains the fastest on the continent, trade performance is hitting record highs, and international partners are lining up for formal economic relationships—from Singapore to Denmark, from the EU to the US.
The EAC’s adoption of Customs reforms, Rules of Origin updates, and NTB elimination mechanisms demonstrates a commitment to operationalizing integration rather than merely talking about it. The focus on leather and horticulture value chains at the MSME Trade Fair reflects a strategic shift from raw material export to value addition.
The challenges are real. The Middle East crisis has moderated growth. Rising debt servicing costs are tightening fiscal space. Inflation, though declining, continues to pressure businesses and consumers. But the trajectory is unmistakable: East Africa is not just open for business—it is actively building the architecture for sustainable, inclusive growth.
As one analyst at the NCBA forum noted, “stronger institutional coordination is key to converting trade gains into investment outcomes.” That coordination—across governments, diplomatic missions, financial institutions, and the private sector—is precisely what East Africa is building today.
