The East African Community (EAC) is considering the admission of Ethiopia and Djibouti into the bloc.
This comes on the heels of Somalia joining the bloc, an indicator that regional leaders view the integration expansion as one of the strengths that the region can leverage on.
The admission of Ethiopia and Djibouti could potentially unlock new opportunities for economic growth and cooperation, positioning the bloc as a more influential player on the African continent. However, the likely accession of the dual could bring new challenges and opportunities to the EAC.
Over the past few years, the EAC economy has experienced an average growth rate of over five per cent, positioning it among the fastest-growing regions in sub-Saharan Africa. Its enormous potential for economic and industrial growth can be attributed to the presence of a good business environment, and deeper trade among member states.
The move to integrate the Horn of Africa into the EAC bloc will create a broader market of nearly 800 million people. This could deepen regional integration, enhance market access, and stimulate intra-regional trade, given their strategic location in the Horn of Africa.
Furthermore, their participation could bolster infrastructure development, spur investment opportunities, and promote cross-border cooperation in areas such as energy, transportation and telecommunications. Uganda stands to benefit significantly from the potential accession of Ethiopia and Djibouti to the EAC.
Ethiopia is the second most populated country in Africa after Nigeria, with a large domestic market of nearly 123.4 million in 2022, as noted by the World Bank. Increased market access to Ethiopia's sizable population would offer new opportunities for Ugandan exporters, particularly in sectors such as agriculture, services and manufacturing.
Furthermore, Ethiopia's strong economic growth and industrialization efforts could attract investment and technology transfer to Uganda, fostering economic development and job creation. In addition, Ethiopia's improved regional infrastructure connectivity would enhance Uganda's trade links with other EAC member states and beyond, facilitating smoother movement of goods and people.
Notably, Ethiopia is a regional leader in air transportation, with Ethiopian Airlines as one of Africa's three top global carriers, covering an extensive network across the continent.
Moreover, Ethiopia's geopolitical significance could strengthen the EAC's bargaining power in international trade negotiations, benefiting Uganda through collective representation on global platforms. Addis Ababa is already involved actively in regional integration initiatives in the Horn of Africa and has played a part in the success of the Intergovernmental Authority on Development (IGAD) in maintaining peace and security in Africa.
On the other hand, Djibouti's accession to the bloc comes with several potential benefits. Notably, Djibouti is strategically located in the Horn of Africa at the southern entrance to the Red Sea, with a coastline of nearly 372km.
This presents the EAC region with an opportunity to access crucial sea trade routes between Africa and the Middle East and Asia, thereby bolstering the prospects to increase trade and investments. In addition, Djibouti's enormous natural assets could be used to boost travel and tourism growth within the region.
Similarly, its vast infrastructure of undersea telecommunications (fiber optic) cables could provide a platform to boost high-speed data transmission, seamless internet connectivity, and the establishment of digital industries within the bloc. On the downside, the Horn of Africa grapples with several looming risks which need to be addressed to ensure a smooth integration process.
For instance, in the past two years (2021 - 2023), Ethiopia has been gripped by civil conflicts in the northern regions of Afar, Amhara and Tigray. Moreover, the Afar-Issa conflict in Ethiopia's Sitti Zone and the presence and activities of Islamist terrorist groups in the neighbouring Somaliland and Puntland State of Somalia, pose potential security risks to Djibouti's stability and growth trajectory.
Furthermore, Djibouti continues to serve as a safe haven for the refugees from the instability in the Middle East, mainly Yemen. This situation is exacerbated by the presence of foreign military bases, including those of China and the United States of America.
With the potential admission of Ethiopia and Djibouti, the potential benefits to EAC are promising, yet not without challenges. The EAC needs to carefully take into consideration these complexities through strengthening diplomacy to maintain regional stability and bolster socio-economic integration.
The writer is a research associate at EPRC, Makerere University.
Related Stories
2024-06-27 - Uganda deploys six new immigration officers in UK, Canada, US