• Authored By: Aida Kibirige Nattabi, Justine Luwedde, Philemon Okillong and Hildah Namuleme
25 Sep 2023
  • File Size 1.32 MB
  • Published Sep 25, 2023

How does conflict affect the trade prospects of Somalia joining the EAC?

In 2022, the Federal Republic of Somalia re-applied to join the East African Community (EAC). In June 2023, the report to verify Somalia’s application to join the EAC was adopted at the EAC Heads of State summit in Bujumbura and negotiations are underway to decide whether Somalia joins the EAC. This policy note analyses the implications of Somalia joining the EAC. It focuses on; highlighting the effects of the violent conflict on Somalia’s readiness to integrate regionally; and identifying the products with export potential and opportunities for export diversification, given the past trends in trade between the two parties.

We approach the study using desk reviews of relevant literature, and secondary data from the International Trade Centre database (Trade Map/COMTRADE), the UNCTADstat database, and the Observatory of Economic Complexity (OEC). We further adopt the export potential assessment methodologies established by the International Trade Centre (ITC) to analyse the Export Potential Indicator (EPI), the Product Diversification indicator (PDI); and the Revealed Comparative Advantage (RCA) to assess trade opportunities between Somalia and the EAC. We find that Somalia’s longstanding conflict has greatly affected the economy, governance, and regional relations which could affect its readiness for integration.

We recommend that Somalia; focuses on the production and export of products where it has comparative advantage, and the highest potential to diversify its exports to the EAC; strengthen its security budget to curb terrorism and internal conflicts; Enforce adherence to international and regional standards (EAC standards) and sanitary and phytosanitary measures. We further recommend that the EAC; fast-tracks the admission process of Somalia to the EAC bloc; join efforts with Somalia to strengthen security; and jointly invest in regional transport infrastructure to increase regional trade.

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