East Africa risks losing export earnings worth 2.75 billion euros (US$3.0 billion) as global markets tighten enforcement of traceability and due diligence rules, exposing a widening readiness gap among agricultural producers, according to industry data.
Exporters across the region are under growing pressure to prove exactly where and how their commodities are produced, as the European Union steps up enforcement of sustainability and supply-chain transparency regulations. Yet only about 15 percent of agribusinesses are aware of the new requirements, the 2024 Danish Industry Report found.
Agriculture is the backbone of East Africa’s economy, contributing around 32 percent of gross domestic product and employing more than 80 percent of the population. Key exports including coffee, cocoa, tea, cereals, horticulture, oil crops, rubber and timber are now facing unprecedented scrutiny from the EU, one of the region’s most influential buyers, particularly for Uganda, Kenya, Tanzania, Ethiopia, Rwanda and Burundi.
The pressure has intensified with the rollout of the EU Deforestation Regulation (EUDR) and the Corporate Sustainability Due Diligence Directive (CSDDD), which require companies to demonstrate legal origin, deforestation-free production and end-to-end supply-chain transparency.
Although the regulations are designed to accelerate global sustainability, they apply to a wide range of agriculture-linked exports and have revealed significant gaps in preparedness. The Danish Industry Report shows that 65 percent of companies say they need clearer regulatory guidance, 57 percent require practical compliance frameworks, and 52 percent lack access to the digital tools needed to meet the new standards.
The impact is already being felt. Britain’s Guardian newspaper reported this year that uncertainty over compliance has prompted some European buyers to scale back or slow purchases from East African suppliers, particularly where smallholder-dominated supply chains complicate traceability verification.
Across the region, the debate has increasingly centred on digital traceability. Many exporters still see traceability systems as costly, even as the greater risk lies in losing access to high-value markets that now demand verified legality and deforestation-free sourcing.
Adoption remains slow, constrained by low digital literacy, limited smartphone access, weak connectivity, fragmented data systems and concerns over data privacy.
Speaking at a recent “Beyond Traceability Talks” webinar hosted by Swiss agritech company Koltiva, Susan Atyang, regional programme manager at the Agricultural Business Initiative (aBi), said traceability was now essential for competitiveness.
“Traceability enables competitiveness, market access and financial inclusion,” Atyang said, adding that aBi assesses organisational readiness including audited accounts, return on investment, farmer reach and compliance systems before supporting digital implementation.
Others say misconceptions persist about smallholders’ ability to adopt digital tools. Waithera Muriithi, strategy and innovation lead at Café Africa Uganda, said awareness, rather than capability, was the main barrier.
“You cannot achieve traceability without farmer empowerment,” she said. “When farmers understand the benefits, adoption accelerates.”
Despite pockets of progress, structural challenges remain. More than 75 percent of agriculture in Ethiopia, Kenya, Tanzania and Uganda is driven by smallholders, many of whom lack formal land documentation required for geolocation verification. Fragmented supply chains, involving multiple intermediaries, further complicate consistent data collection from farm to exporter.
Connectivity gaps also pose a challenge. Internet penetration in East Africa stands at 28.5 percent, compared with a global average of 67.9 percent, according to Statista. Meanwhile, about 80 percent of smallholders live below the poverty line, making it unrealistic to pass the full cost of compliance onto producers.
Industry executives say shared responsibility will be crucial. “There is no sustainability without traceability — and the demand will only increase,” said Fanny Butler, senior head of markets for Europe, the Middle East and Africa at Koltiva, adding that early adopters would gain a competitive edge.
Experts broadly agree that maintaining access to premium markets will require three parallel efforts: raising regulatory awareness across supply chains, conducting source-level risk assessments, and deploying digital tools designed for rural conditions.
East Africa is projected to contribute 19 percent of additional global agricultural production over the next decade, according to OECD-FAO forecasts. But analysts warn that unlocking that potential will depend on how quickly the region closes its compliance gap as global markets tighten sustainability requirements.
