The impact of east African community customs union on trade and its economy

This study focuses on the implication of the EAC Customs union in the economy of Tanzania. In view of the importance of trade, investment and revenue to economic development, this study provides a cost benefit analysis of Tanzania’s participation in the revived East African Community specifically the EAC-CU within the context of the fast tracking to the proposed East African Federation by 2012. The study used mainly desk research for purpose of data collection and fact finding. I also used macroeconomics assumptions. The study concludes by giving the impacts resulting from the country’s participation in the EAC-CU. The study found that EAC-CU has significant welfare benefits arising from greater competition, economies of scale and higher level of trade and investment .In order to reap the benefits of EAC-CU extra efforts need to be devoted such as build the capacity of domestic investors for sustainable investment and economic growth, improving infrastructure and maintain customs practices because tariff reduction alone would not generate high intra-regional trade.