AfCFTA's Impact on East African Exports and Household Livelihoods

This policy brief investigates the effects of the African Continental Free Trade Area (AfCFTA) and East African Community (EAC) membership on export performance and household welfare in five East African countries—Burundi, Kenya, Rwanda, Tanzania, and Uganda—using panel data from 1997 to 2020. The findings reveal that while investment, imports, consumption, political stability, and institutional quality significantly enhance export performance, GDP and foreign direct investment (FDI) do not show a statistically significant impact. The influence of EAC and AfCFTA membership on exports remains inconclusive. Regarding household welfare, positive effects are observed from GDP growth, domestic savings, trade openness, rule of law, and corruption control. However, EAC membership surprisingly correlates with a decline in household welfare, whereas AfCFTA membership shows a positive but statistically insignificant effect. The study recommends that policymakers prioritize investment, institutional strengthening, and strategic export promotion—particularly through sectoral development and inclusive participation in AfCFTA—to maximize trade benefits and improve household livelihoods.