Kenya, Somalia pursue deeper economic integration within the East African Community

NAIROBI — Kenya and Somalia signaled a renewed push to deepen their economic partnership beyond the traditional exchange of goods, using a Nairobi forum this week to elevate services, diaspora investment and regional integration under the East African Community as central pillars of future growth.

Policymakers and business leaders from both countries gathered Feb. 12–13 for the second Somalia–Kenya & Diaspora Trade Week at BBS Mall in Eastleigh, a meeting that organizers said drew more small and medium-sized enterprises and service-sector players than in previous editions. The theme — “Building Partnerships and Promoting Entrepreneurship Across Borders” — reflected a broader shift in Kenya–Somalia trade toward health care, education, technology and investment ties.

Cabinet Secretary for East African Community and Regional Development Beatrice Askul said regional integration and diaspora capital are increasingly shaping trade flows between the neighbors. She noted that Somalia’s recent entry into the EAC has created fresh momentum for harmonized policies and regional value chains.

“Kenya and Somalia share deep commercial, social, and cultural ties, rooted in centuries of trade across the Indian Ocean,” Askul said, adding that structured integration under the EAC framework could unlock more balanced and diversified growth.

Somalia’s Minister of Commerce and Industry, Gamal Mohamed Hassan, said reforms are underway to improve the business climate and attract private investment. Delegates pointed to a steady rise in bilateral trade in recent years, with Kenya’s exports to Somalia expanding between 2020 and 2023 and Somali demand for Kenyan goods running into billions of shillings in recent quarters.

This year’s Trade Week marked a notable departure from earlier editions by broadening its scope to services — a recognition, participants said, that sustainable economic ties require more than merchandise trade. Among the exhibitors was The Nairobi West Hospital, which used the platform to spotlight health care’s economic role.

“Healthy communities are productive communities. When workers and entrepreneurs have access to reliable health services, absenteeism falls, and economic participation rises,” said Susan Wakaruigi, the hospital’s head of nursing. She argued that investment in health infrastructure should be viewed as part of broader economic development.

Despite the optimism, participants acknowledged persistent hurdles. Traders cited high logistics costs, supply chain inefficiencies and regulatory bottlenecks that continue to dampen cross-border business, particularly for SMEs. Some exporters called for faster customs clearance and the removal of non-tariff barriers to ease the movement of goods and services.

Concerns over risk perceptions linked to operating in Somalia also surfaced, though officials insisted that reforms are steadily improving the investment climate. Even so, the overall tone of the forum was forward-looking, with discussions on joint ventures, cross-border logistics hubs and digital marketplaces as avenues to scale trade and reduce friction.

Speakers said diaspora investors — long central to Somalia’s private sector — are likely to play a larger role in channeling capital and market know-how into ventures that straddle both countries, from health services and education to technology and transport.

Participants highlighted several practical steps to accelerate momentum:

• Harmonize and digitize customs procedures under EAC standards to cut clearance times at key crossings.
• Tackle non-tariff barriers and overlapping regulations that raise costs for small traders and service providers.
• Expand cross-border logistics infrastructure and warehousing, paired with secure, interoperable digital marketplaces.
• Prioritize social-sector investment — especially health services — to support workforce productivity and business resilience.

The two-day forum underscored that Kenya–Somalia trade is evolving from transactional exchanges toward integrated economic cooperation. With Somalia’s EAC entry setting the policy backdrop and diaspora capital adding depth, officials and businesses framed the next phase around services, investment and social-sector collaboration — while pressing for concrete fixes to the chokepoints still slowing cross-border commerce.

By Ali Musa

Axadle Times international–Monitoring.