East African Countries economic performance has been disappointingly low compared to other developing regions. This has been attributed to many factors, among them: the inability for most African countries to secure access to larger markets; inherent high intra-country trade costs; lack of an effective framework for regional cooperation and resource pooling; and the pressure from development partners pursuing their own foreign policy objectives in the continent. As a consequence, among other measures geared towards promoting economic growth and development, Africa is witnessing a renewed momentum for financial integration. However, there are conflicting views concerning the role that financial integration plays in economic growth and by extension trade. In addition, whether the EAC efforts towards deeper financial integration have yielded positive results in terms of improved economic growth and trade remains largely unexplored or uncertain. This is an important issue because growth and trade in the EAC is by and large low and highly variable among these countries, and need to be improved.
