Boom in China exports gives EAC first-ever trade surplus

Zawya

5 days ago

A surge in exports to China helped the East African Community (EAC) post its first-ever trade surplus with the rest of the world in the quarter to March 2025, signalling a potential turning point in the region's global trade position.
The eight-member bloc recorded a joint trade surplus of $840 million with global trading partners, its first positive balance in recent history, largely driven by a sharp rise in exports to China, its largest trade partner.
The shift may have been partly influenced by the escalating US-China tariff wars, which some economists say could be pushing Beijing to diversify its sourcing of key commodities like minerals and agricultural products.
EAC countries cumulatively exported commodities worth $17.7 billion to the rest of the world during the three-month period, a 47 percent increase from $12 billion in the same quarter last year, according to data from the EAC Secretariat.
Imports from countries outside the region fell short of exports for the first, despite posting a 5 percent rise to $16.8 billion in March from $16.1 billion a year ago.
This resulted in a net inflow of foreign currency into the region, easing foreign exchange pressures and helping stabilise the East African currencies that have long endured significant volatility from global economic shocks over the past five years.
Read: Pain of Trump's tariffs on African economiesComing in the wake of record tariffs imposed on imports from several African countries by US President Donald Trump, which have since been paused to August1 at least, economists interpret the jump as a rush to beat a potential return of the levies.'The fact that it comes from exports is very positive. It could be that some exports were brought forward ahead of the tariff impositions,' said Phyllis Papadavid, an economist and senior research fellow at London-based think tank Overseas Development Institute.
Indeed, exports to the US saw a steep 35 percent or $73 million jump during the year to March, hitting $280 million. But this accounted for just 1.3 percent of the total rise in EAC exports, suggesting other factors were at play.
Deepening trade disputeOne such factor could be the deepening trade dispute between the US and China, which may have prompted Beijing to seek alternative suppliers, especially for minerals and agricultural products –two of its key imports from Washington.
Exports to China from the region jumped to $5.8 billion in the period, a 66 percent increase from $3.5 billion last year, while imports from the Asian economic giant rose by a measly 7.6 percent to $4 billion, from $3.7 billion in March 2024.
This marks the first time the EAC has recorded a trade surplus with China, reversing a historically lopsided relationship dominated by high-value machinery and electronics imports from Beijing. At the same time, EAC exports to four of its other top trading partners – United Arab Emirates (UAE), Hong Kong, South Africa, and India – also surged, further supporting the trade surplus.
Hong Kong, for instance, recorded a triple growth in exports from the region in the year to March, from $561.9 million in 2024 to $1.58 billion this year, making it the third leading export source for East Africa after China and the UAE.
EAC also saw a notable drop in the total value of imports from some of its leading trading partners, including the UAE, India, Russia, and Germany, also contributing to the surplus.'The EAC's total trade with the world has been increasing, with exports growing faster than imports,' notes Benard Wabukala, an economist and lecturer at the Makerere University Business School.
Dr Wabukala agrees that the rise in demand for East African goods from the Chinese market has been behind the surging exports, and the trade surplus has been a long way coming.'Exports to China surged significantly, reflecting the strong demand from that market, and improvement in value and diversification of export products particularly agriculture and minerals,' he told The EastAfrican.'This trend has been coming and is likely to be sustained in the medium term, with current rains favouring agricultural production.'The EAC data shows that the export commodity that saw the largest increment over the period is copper and its articles, which nearly doubled to $6.6 billion, from $3.9 billion in March 2024, indicating a surge in exports from the Democratic Republic of Congo.
Other exports that increased significantly include pearls, precious metals and stones, which rose by 77 percent to $2.95 billion from $1.67 billion. These are also largely exported by the DRC, and partly Tanzania and Uganda.
Read: China's delight as Uncle Sam's once-favourite Ruto comes callingCoffee, tea and spices, which are exported largely from Kenya, Uganda, and Tanzania, also recorded a jump of $364.4 million, or 30 percent, to hit $1.2 billion over the period. While China remains the EAC's largest trade partner, intra-African trade is also gaining momentum.
Trade with other African countries now accounts for 27 percent of the bloc's total merchandise trade, up from 22 percent last year. Intra-EAC trade has grown from 12.1 percent to 15.2 percent over the same period.
Conversely, trade with the European Union and the Association of Southeast Asian Nations (Asean) has declined—from 8.1 percent and 6.7 percent of total EAC trade, respectively, to 6.9 percent and 6 percent.
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