The potential Trade effects of Democratic Republic of Congo Joining the East African Community bloc

Abstract

DRC has expressed interest in joining the EAC regional bloc to tap into the benefits of the regional trade and expanded markets. Using trend analysis of trade flows and SMART-WITS Partial Equilibrium model, this study examines the likely impact of DRC’s membership in the EAC, to establish trade effects of liberalising trade between EAC and DRC. The emerging results reveal that trade effects are positive among the EAC partner states, more so for Rwanda and Uganda given that there are the leading EAC exporters to DRC. The analysis also identifies the EAC main economic sectors poised to benefit a result of this trade liberalisation. At a sectoral level, the largest trade effects will be experienced in agro-processing, metal products and mineral ores industries. These findings point to the need for EAC members to pursue develop these sectors while pursuing industrialization agenda to replace DRC’s imports from the rest of the world.