Somalia’s accession to the East African Community marked a significant geopolitical shift. Despite its long struggles against the terror group Al-Shabaab and environmental catastrophes, the move to join the EAC signifies a country that is looking beyond its current troubles into the future.
The EAC, which already includes Burundi, the Democratic Republic of Congo, Kenya, Rwanda, South Sudan, Tanzania, and Uganda, welcomed Somalia into its fold early this year, expanding the market to more than 300 million people. Somalia President Sheikh Mohamud described the moment as “historic” and said it was a “beacon of hope” for Somalia and would mutually benefit partner states. With Somalia in, the bloc will expand its market to a further 17m people and gain more than 3,000km of shoreline, an opportunity for the blue economy.
This comes with opportunities as well as challenges. The EAC partners are already playing a pivotal role in Somalia’s journey towards stability with Uganda, Kenya, and Burundi armies supporting the African Union Transition Mission in Somalia (ATMIS) forces in Mogadishu.
Beyond security, Somalia is a virgin area for investment opportunities in infrastructure, energy, and telecommunications. For Uganda, trade with Mogadishu has been dismal. In 2020, Somalia exported a meagre $75,000 worth of goods to Uganda while Kampala exported a dismal $67,000 to the former’s territory, according to the online trade data tracker, the Observatory of Economic Complexity. However, with Somalia joining the EAC trade bloc, trade between Uganda and Somalis is expected to be boosted.
Already, there are tell-tale signs of the benefits to come. Data reported by diplomatic missions in Mogadishu in April 2024 showed that Somalia is a new source of remittances for Kenya and Uganda, accounting for $180 million and $21.9 million respectively per year.
Media reports indicated that there were more than 35,000 Ugandans in Somalia, remitting between $50,000 and $60,000 per day. Kenyans remitted an average $500,000 million per day.
With the likelihood that more people from the region might choose to live and work in Somalia as the integration protocols soften rules, the remittances to partner states might grow.
President Yoweri Museveni congratulates Somalia’s leader upon admission into the bloc. Photo/EAC
Already, Ugandan entrepreneurs are actively involved in significant business ventures in Somalia among others including teaching, agri-business, and electrical businesses. With Somalia’s inclusion in the EAC, more Ugandans are poised to expand their investments and establish businesses in Somalia, reciprocated by Somalis engaging in business activities and investments in Uganda, fostering increased economic interactions and business opportunities for both nations.
Given Uganda’s status as Africa’s leading banana producer in the region, the country is well-positioned to collaborate with Somalia in the banana sector, offering expertise and diverse banana cultivars to restore Somalia’s prominence as a banana-exporting nation. Uganda’s agricultural exports to Somalia have been currently limited, but there is potential for growth as Somalia rebuilds its economy and infrastructure. Some of the key exports from Uganda to Somalia include tobacco and manufactured tobacco substitutes, aircraft, spacecraft, beverages, spirits, and vinegar. As Somalia integrates into the EAC, it is expected that trade between the two countries will increase with the reduction in tariffs, providing new opportunities for Ugandan Agri-businesses to explore.
Looking ahead, the integration of Uganda and Somalia presents a unique opportunity for Uganda to leverage its diverse strengths in various sectors, ranging from technology and education to green energy. This convergence lays the foundation for a symbiotic partnership that can propel the overall development of both member states. Uganda’s strides in the field of green energy can offer sustainable solutions to Somalia’s energy challenges. Collaborative efforts in renewable energy projects, such as solar and wind power initiatives, can not only address energy needs but also contribute to environmentally friendly practices.
In conclusion, as Somalia integrates into the EAC, questions arise about the bloc’s readiness to ensure peace, security, and regional stability. Somalia’s chronic instability and security challenges, including the presence of al-Shabab, raise concerns about potential impacts on the movement of militants and contraband across the region. Some member states express reservations about Somalia’s readiness, citing issues related to governance, human rights, and the rule of law. Addressing these concerns is crucial for ensuring a successful integration within the EAC.