The East African Community (EAC) has slid back into a trade deficit after a brief stint as a net exporter at the start of the year, blamed on a sharp decline in exports to key markets such as China, India and the United States.

In the quarter to June 2025, the bloc’s trade balance deteriorated by 334 percent, reversing earlier gains and returning to a familiar but undesirable trend. This saw the bloc go from a historic surplus of $416.5 million in the previous quarter to a deficit of $974.7 million.

Latest data from the EAC Secretariat shows the reversal was largely driven by a drop in exports to some of its largest foreign markets, especially its leading buyer China, and others such as India, Indonesia, the US, Switzerland and Vietnam.

This occurred amid intensifying global trade tensions, with looming tariffs in the US and escalating geopolitical frictions in the Middle East disrupting global supply chains, to the disadvantage of African exporters.

In its Global Trade Update for the period, the United Nations Trade and Development (UNCTAD) warned that trade wars among major world economies were spilling over into their commercial relations with developing countries.“Geoeconomic factors continue to play a significant role in shaping key bilateral trade patterns. These dynamics have had a substantial impact on trade between major economies and on their relationships with other partners,” the report said.

During the period, despite a modest overall rise in exports, the region saw a sharp drop in shipments to at least ten of its top trade partners, including China, which traditionally buys about 30 percent of the EAC’s total merchandise.

The US, which itself saw a 29 percent drop in overall imports during the quarter following sweeping tariffs introduced by the Donald Trump administration, also cut purchases from the region. EAC exports to the US declined 10 percent, or $26.8 million, to $233.8 million, from $260.6 million in Quarter 1.

But the bloc’s biggest market loss was India, previously its fourth-largest export destination, which slashed imports by more than half, to $171.8 million, down from $375.7 million in March.

Exports to Switzerland, Mozambique, Vietnam, Indonesia, the United Kingdom, Zambia, and Pakistan also declined significantly, derailing overall export growth, while imports continued to surge.

According to the EAC data, the sharpest drop was in agricultural and food products — notably cocoa, cereals, trees, and other plants — which jointly form the region’s leading export categories.

Overall, the bloc’s exports grew by a modest three percent to $18.6 billion, from $17.9 billion in the previous quarter, while imports rose by 11 percent to $19.6 billion from $17.58 billion.

All major import sources except Russia, Saudi Arabia, and Malaysia recorded growth in shipments to the region, most outpacing the corresponding rise in EAC commodity exports.

Particularly strong growth was recorded in imports from Australia (198 percent), Oman (196 percent), Zambia (165 percent), Belgium (153 percent), Ghana (76 percent), France (42 percent), and the United Kingdom (42 percent).

Makerere University lecturer Bernard Wabukala had at the time predicted that the surplus could be sustained in the medium term, provided favourable weather supported increased agricultural production.

© Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).