The East African Community (EAC) partner states have been called upon to allocate more resources to small and medium enterprises (SMEs) as a strategic approach to strengthening regional manufacturing and intra-EAC trade. This appeal was made during the 7th EAC Secretary General’s Forum held in Nairobi, which brought together civil society, interest groups, and the private sector to discuss key regional integration issues.
The forum underscored the critical role of SMEs in driving the region’s industrialization agenda. Highlighting the importance of inclusive policies, stakeholders urged EAC member states to prioritize small-scale farmers in green initiatives and introduce comprehensive training programs on trade procedures and documentation to enhance their participation in cross-border trade.
Abdi Dubat, EAC Affairs Principal Secretary, praised the forum’s discussions, stating, “The insights shared over the past days on the sub-themes have not only deepened our understanding of the challenges but also illuminated a clear path forward. The practical recommendations, good practices shared, and lessons learned from the last 25 years of regional integration are invaluable.”
SMEs as Engines of Growth
The forum emphasized that SMEs are pivotal to the region’s manufacturing and industrialization strategy. According to EAC statistics, intra-EAC trade increased by 13.1% last year, reaching $12.1 billion, with the share of intra-EAC trade in total EAC trade rising to 15%. These figures underscore the potential of SMEs in fostering economic growth and regional integration.
To further capitalize on this potential, partner states were urged to invest in local manufacturing, particularly in the pharmaceutical sector. This move is seen as crucial to achieving significant production capacity within the region.
Digital Infrastructure and Payment Systems
Another critical recommendation was the expansion of digital infrastructure in rural areas to ensure SMEs have access to necessary tools and platforms for growth. Stakeholders called for the implementation of policies encouraging digital adoption and the creation of a conducive regulatory environment.
Veronica Nduva, EAC Secretary General, highlighted the importance of a regional electronic payment system to facilitate seamless cross-border trade. “I am happy to note that a number of our partner states already have national switches for payment solutions. We are waiting to embark on a regional switch that will enable easy trade across borders because our trade has seen an increase in number, both with the rest of the world and within the EAC,” she said.
The deployment of a unified regional payment system was identified as a priority to enhance trade efficiency and integration across the bloc.
Inclusive Policies and Local Content
To better support local businesses, the forum also recommended developing a unified policy for local content across member states. This policy would ensure that local SMEs are integrated into supply chains, promoting job creation and economic resilience.
Additionally, leveraging technology in the tourism sector was proposed as a means to connect local service providers with international markets, further diversifying opportunities for SMEs.
Empowering Entrepreneurs
Recognizing the importance of entrepreneurship in economic growth, the forum awarded eight entrepreneurs and innovators from each EAC partner state Ksh 2.03 million each to help them scale their businesses. This financial boost is expected to foster innovation and support SMEs in overcoming challenges related to capital and market access.
Path Forward
The 7th EAC Secretary General’s Forum concluded with optimism, outlining a roadmap for empowering SMEs and strengthening regional integration. By prioritizing investments in SMEs, digital infrastructure, and local manufacturing, the EAC aims to create an environment conducive to sustainable growth.
As the region continues to grapple with global economic challenges, these recommendations provide a framework for fostering resilience, enhancing competitiveness, and ensuring that SMEs remain at the forefront of the EAC’s economic development agenda.
