Somalia joins the East African trade bloc

Although Somalia submitted its application in 2012, it took 11 years to grant its request due to lingering security concerns.

Somalia joins the East African trade bloc
Image source: East African Community via X (formerly Twitter).
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Editor’s note: This story is part of Mariblock’s “State of Fiat” coverage. Digital assets such as bitcoin are seen as competitors to central bank money. Therefore, we consider informing our audience of the state of their local currencies worthwhile.

Somalia officially became the eighth member of the East African Community (EAC) on Nov. 24, 2023, a move aimed at boosting regional trade.

EAC leaders made the decision during the 23rd ordinary summit of heads of state in Arusha, Tanzania. 

Be smart

  • The EAC is one of Africa’s most integrated regional economic communities, with a well-developed customs union and common market.  
  • The East African Community (EAC) member states include Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, the Democratic Republic of Congo (DRC), and Somalia.  

Dive in 

  • According to reports, Burundi President Evariste Ndayishimiye announced Somalia’s admission during a closed-door meeting of over five hours. 
  • President of Somalia, Hassan Sheikh Mohamud, referred to the accession as a “beacon of light” for the country.  
  • According to him, this will extend the bloc’s reach to an additional 17 million people and acquire more than 3,000 kilometers of coastline, opening substantial economic opportunities. 

Key quote  

President Mohamud said: 

“Our journey to this day has been one of resilience, perseverance, and unduly belief in the power of regional unity and operation as Somalia joins the East African community. We are not merely entering a regional bloc, but we are joining a family of nations.” 

Why it matters 

  • Although Somalia submitted its application in 2012, it took 11 years to grant its request due to lingering security concerns. These concerns continue to challenge the country’s stability and economic development. 
  • Somalia has been battling an insurgency by al-Shabaab militants since 2006, while the breakaway region of Somaliland in the north seeks full autonomy. 
  • Some officials have expressed concerns that Somalia’s cross-border movement associated with EAC integration could facilitate the movement of militants and contraband within the region. 
  • Kenya abandoned its plans to reopen its border with the country this year due to an increase in attacks in northern Kenya by suspected al-Shabab fighters. 

Zoom out 

  • The bloc is set to establish a central bank in 2031. This is a step towards introducing a common currency soon. 
  • The EAC secretariat is exploring the development of a central bank digital currency (CBDC) while enhancing the East Africa Payments System (EAPS).