Kenya’s Parliament is intensifying calls for a thorough review of the costs and benefits associated with the country’s membership in the East African Community (EAC). Growing frustrations among lawmakers revolve around what they describe as an unfair deal—Kenya bearing disproportionate financial burdens while garnering insufficient returns. This debate could mark a turning point for both the regional bloc and Kenya’s future role within it.
The Promise And Reality of the EAC
The EAC was envisioned as a driver of deeper regional integration—fostering trade liberalization, infrastructure development, harmonized policies, free movement of people, and political cooperation. Kenya, as one of the bloc’s anchor economies, has long played a pivotal role, contributing materially to the Community’s functions.
In practice, however, the balance between vision and reality has proven fragile. Kenya is now under scrutiny from its own MPs, who argue that the costs are mounting while the benefits are failing to keep pace.
The Financial Strain: Kenya’s Heavy Burden
Budget Contributions and Defaults
One of the flashpoints in the debate is the unequal burden of EAC budget contributions. Under a new financing model adopted in recent years, 65% of the EAC’s budget is to be funded through equal contributions by member states, with the remaining 35% allocated according to each member’s average nominal GDP over the past five years.
In the new model, Kenya’s share rises accordingly. It is expected to contribute about US $12.1 million annually, representing 23.7% of the total. In comparison, Tanzania will pay $9 million; Uganda $8.5 million; Rwanda $8.3 million; South Sudan $6.6 million; Burundi $6.4 million.
These amounts are contentious, especially given that several member states have persistently defaulted on their contributions. As of April 2025, for instance, the Democratic Republic of Congo owed $20.7 million; Burundi, $16 million; South Sudan, $15.1 million; and Rwanda, $2 million. The cumulative arrears in the 2023–24 year were reported at over US $35 million, undermining the EAC’s capacity to function effectively.
When other member states fail to pay, Kenya and a few others end up picking up the slack, feeding a narrative among MPs that Kenya is overextending itself.
Revenue Loss from Integration
Beyond direct budget contributions, Kenya also faces revenue losses, in particular from tariff and customs revenues sacrificed under common external tariff (CET) arrangements and removal of internal tariffs. According to a study by KIPPRA, removing intra-EAC tariffs could cost Kenya about US $58.7 million annually in potential revenues. However, because the actual removed-tariff component was small, the real net loss was estimated at $613,400 (about 0.03% of total tax revenue at the time).
That said, the study argues that Kenya’s broad tax base (VAT, income tax, excise) can absorb some of these losses. The bigger concern is how the CET is calibrated. Too low a CET means more revenue loss; too high, and it risks suppressing trade and competitiveness.
Trade Inefficiencies and Non-Tariff Barriers
While the EAC framework promises seamless trade, in reality Kenyan industries and traders often encounter bureaucratic delays, inconsistent border procedures, and non-tariff barriers. MPs cite the fishing industry around Lake Victoria as one of the sectors heavily affected, with trade inefficiencies constricting markets and earnings.
Manufacturers and transporters have complained that the pace of harmonization is slow; documentation is not sufficiently streamlined; and rules of origin are poorly enforced or manipulated. These frictions reduce the gains from “free trade” within the bloc, undermining the logic of deep integration.
Sectoral Impacts: Fishing, Agriculture, Manufacturing
- Fishing & Lake Victoria region: Economic disruptions have been blamed on poor coordination in inter-state trade in fish and related products, harming local livelihoods. MPs argue Kenya ends up subsidizing transport and regulatory costs more than benefiting from expanded regional markets.
- Agriculture & agribusiness: Some small farmers report being edged out by cheaper imports from partner states, particularly when tariffs or quotas are poorly aligned. The intended boost in input availability (fertilizers, seed, machinery) has not uniformly translated to gains, because distribution and quality control remain weak.
- Manufacturing: While Kenyan manufacturers hoped for better regional scale and export markets, many remain unconvinced. Lack of harmonized standards, slow customs processes, and stiff competition from more efficient producers (especially in Rwanda and Uganda) limit gains.
The Strategic Stakes: Balancing National and Regional Interests
Kenya’s struggle is balancing on a knife-edge: it must protect key revenue streams (customs, tariffs) and maintain fiscal discipline, while also honoring its regional commitments and preserving its role as a regional leader.
If integration erodes Kenya’s revenue without compensating gains, the political sustainability of EAC membership becomes tenuous. That is the central worry driving the current parliamentary push.
This moment is not purely technical or economic — it has diplomatic and geopolitical implications. Kenya must manage its relationships with partner states carefully. A withdrawal or withdrawal threat could destabilize trust and regional cohesion.
Yet, if reforms fail and Kenya is seen as continually subsidizing others, domestic pressure could make disengagement inevitable.
