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This study examined the impact of trade facilitation on economic development, particularly the impact of customs environment on trade flows over the period from 1995 to 2010. Five countries of the East African Community (EAC), namely, Tanzania, Kenya, Uganda, Rwanda, and Burundi, are involved. The study employs a gravity model for estimating bilateral trade flows between the EAC partner states. The ordinary least square (OLS) technique is adopted and applied for the regression analysis by using the Stata 10.0 software. Results suggest that, the customs environment of the importer is signify cant and possesses a strongly positive impact on East African trade flows. Results also find that the customs environment of the exporter is insignificant, even though it shows a negative relationship with the East African trade flows, hence a negative determinant. East African countries have to improve their customs environment, especially when undertaking an importation, in order to boost the overall trade flow in the block. They should also improve other trade facilitate on indicators, such as port efficiency, regulatory environment, and infrastructure. The aid for trade, in terms of technical and financial assistance, should also be enhanced for the development of infrastructure, including roads, railways, ports, bridges, and border posts. |
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