Ruto projects $1 billion Kenya–Tanzania trade milestone in 2026 as ties deepen

Kenyan President William Samoei Ruto has projected that bilateral trade between Kenya and Tanzania will exceed $1 billion (about R17bn) in 2026, signaling strengthening economic ties and rising cross-border investment between East Africa’s two largest economies.

Speaking before Tanzania’s parliament in Dodoma on Tuesday, Ruto said trade between the two countries reached about $860 million in 2025, supported by increased private sector activity, improved business conditions and regional integration efforts.

“Kenya and Tanzania are deeply interdependent economies. While the progress we have made is encouraging, it represents only a fraction of what is possible if we fully unlock our shared potential.” 

Ruto said investment remained a cornerstone of bilateral relations, with Kenyan firms committing more than $1.7bn across strategic sectors such as manufacturing, energy, logistics, agriculture and financial services in Tanzania. 

The investments had contributed to job creation, technology transfer and the development of local industrial capabilities.

At the same time, Tanzanian investment in Kenya had grown to an estimated $336m, reflecting a gradual shift toward more balanced economic engagement. Companies such as Taifa Gas, Amsons Group and Lake Gas had expanded into the Kenyan market over the past three years, particularly in the energy and gas distribution sectors.

“With ongoing strategic investments, Tanzanian capital inflows into Kenya are expected to more than double by the end of this year, further strengthening our economic partnership,” Ruto said.

He noted that cross-border investments were increasingly shaping regional value chains, particularly in manufacturing and agro-processing. 

By stimulating demand for raw materials and supporting value addition, the investments were helping build integrated supply chains capable of serving both domestic and export markets.

The Kenyan leader said the trajectory presented an opportunity for the two countries to expand their influence in the East African Community (EAC) and tap into the wider market offered by the African Continental Free Trade Area.

“Intra-regional trade within the EAC remains low, at between 10% and 15% of total trade, which means that the majority of our commerce still takes place outside the region. This gap represents a major opportunity for expansion.” 

Ruto said that strengthening intra-regional trade would boost economic growth and enhance resilience against global economic shocks, including supply chain disruptions and fluctuating commodity prices.

He also underscored the importance of policy coordination and regulatory alignment in unlocking further growth. Ruto called for the removal of non-tariff barriers, harmonisation of standards and faster implementation of trade facilitation measures to support businesses operating across borders.

Beyond economics, he highlighted the historical and cultural ties that bound Kenya and Tanzania, noting that the relationship had evolved from a shared struggle for independence into a strategic partnership anchored in regional integration.

He referenced the formation of the original EAC in 1967 and its eventual collapse in 1977, cautioning that failure to sustain a shared vision and prioritise collective interests had undermined progress at the time.

“That experience reminds us that integration requires more than agreements — it requires trust, consistency and a commitment to shared prosperity.”

Ruto said the biggest barrier to deeper integration was neither infrastructure nor policy but mistrust between partner states. That continued to slow decision-making and limit economic cooperation.

“Our greatest challenge is not each other. It is poverty, unemployment and underdevelopment. These are the issues we must confront together,” he said.

The two countries share a 800km border stretching from the Indian Ocean to Lake Victoria, forming a vital corridor for trade, tourism and transport. The corridor connects key economic zones and supports the movement of goods and people across the region.

Kiswahili, spoken by more than 100 million people across East Africa, remains a critical unifying factor, facilitating communication, commerce and cultural exchange.

Ruto urged leaders in both countries to accelerate integration efforts and move beyond incremental reforms toward decisive action.

“The time has come for our generation to act boldly. By working together, we can unlock greater opportunities, build stronger economies and secure shared prosperity for our people,” he said.