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EAC states move to enhance industrial development

THERE is light at the end of the tunnel as far as enhancement of industrial development is concerned for the East African Community (EAC) partner states.

The region is working towards improving the competitiveness of the industrial sector, so as to enhance the expansion of trade in industrial goods within the regional grouping.

It also aims at strengthening the export of industrial goods from the member states, which will in the end help achieving structural transformation of the economy and fostering the overall socio-economic development in the region.

With the enhancement of regional industrial development through investment in key priority sectors, skills development, technological advancement and innovation to stimulate economic development being one of key priorities for EAC from 2017 to this year, Tanzania, as some other countries, has taken its right drive.

In line with the EAC strategies, Tanzania has come up with the Integrated Industrial Development Strategy (IIDS) 2025 that responds to the need for a dynamic strategy to guide the process of resource-based industrialisation, going even beyond the EAC's strategy.

Minister for Finance and Planning Dr Philip Mpango said Tanzania has continued to achieve a sustained high growth rate of the economy, with signs of economic transformation emerging.

Dr Mpango helped execute policies that contributed to average growth of 6.9 per cent during President John Magufuli's first term, boosting Tanzania to low middle-income status.

Moving the Parliament resolve to receive, debate and approve the government's Revenue and Expenditure Estimates for this financial year, Dr Mpango said that the industrial sector has grown during the first term of the fifth phase government, and that by April 2020, a total of 8,477 new industries of large, medium and small categories were established, hence creating 482,601 employment.

"The increase in new industries which commensurate with the increase in production capacities has led to increase in the supply of locally manufactured goods. For instance, installed cement production capacity has increased from 4.7 million tonnes in 2015 to 9.1 million tonnes in 2019.

“Furthermore, actual cement production has increased to 6.5 million tonnes in 2019 compared to 3.3 million tonnes produced in 2015. Actual demand in 2019 was 4.8 million tonnes implying that cement production was sufficient to meet domestic demand and export the surplus. Out of 25 steel industries, 16 industries have capacity of producing 1.083 million tonnes per annum compared to actual demand of 295,000 tonnes per annum,” he said.

Generally, Dr Mpango said increase in industries has led to availability of 24 markets for agricultural, livestock and fisheries products, which are used as industrial raw materials as well as essential commodities for domestic and international markets.

The World Bank, reflecting strong income growth over the past decade, on July last year announced that Tanzania's gross national income (GNI) per capita increased from $1,020 in 2018 to $1,080 in 2019, exceeding the threshold for lower-middle income status.

Kenya came with its industrial enhancement of regional industrial development master plan. The African Development Bank (AfDB) says that the positive outlook mainly reflects favorable weather, increased crude oil production and exports, continuing foreign direct investment, the benefits of the African Continental Free Trade Agreement, and the government's commitment to the Big Four Agenda aimed at industrialisation in health, housing, agriculture, and manufacturing.

The Ministry of Industrialisation and Enterprise Development (MOIED) has developed a strategic, comprehensive and integrated programme to guide Kenya on its journey to industrialisation.

 The programme is guided by Kenya Vision 2030, the country's economic development blueprint that aims to transform Kenya into a newly industrialising, middle-income country providing a high-quality life to all its citizens by the year 2030.

The World Bank hails Kenya's objective of the Economic Pillar of Vision 2030 is to create a robust, diversified and competitive manufacturing sector in boosting local production, expanding to the regional market and taking advantage of global market niches.

As for Uganda, according to International Growth Centre (ICG), the country currently faces a challenge of how to transform economic activity away from low value-added agricultural production, non-tradeable services and manufacturing activities towards high value globally competitive industry.

While in many ways Uganda faces a different global environment in which to pursue industrial development, export-orientated industrialisation remains the most useful benchmark for policy.

IGC says Rwanda has been very successful in supporting structural change - the movement of economic resources out of agriculture into more productive sectors that are industry and services. In the current global economic context, industrial policy is a complex and many-faceted undertaking.

The International Monetary Fund (IMF) says that although 26 years ago Rwanda faced one of the most devastating conflicts in history (Genocide Against the Tutsi), the country has since articulated a comprehensive new strategy, calibrated to achieve the Sustainable Development Goals (SDG) by 2030 and move to middle-high income status by 2050. However, financing full implementation of the strategy will be extremely challenging.

With donor aid waning and domestic resources still limited, the continuation of Rwanda's development remarkable journey hinges critically on, among other things, accelerating the inflow of significant external private financing and investment.

Burundi came up with 'Vision Burundi 2025' as a planning instrument for ensuring long-term development which will guide the policies and strategies as regards sustainable development, with the aim of satisfying the needs of the present generations, without thwarting or undermining the opportunities of generations to come. It was undertaken since 2003.

AfDB says it supports Burundi in implementing other instruments such as its National Development Plan (PND) 2018-2027, adopted in August 2018. Burundi continues to be characterised by a low score on the human development index, weak institutional capacity and various forms of social inequality, an inadequate infrastructure network and high vulnerability to external shocks.

The factors, aggravated by the socio-political crisis that the country experienced in 2015, have prevented the country from achieving its full potential, particularly agricultural, mining and hydroecological. The economic recovery strengthened in 2019 by 3.3 per cent growth in real GDP on the back of higher coffee exports, a slight increase in public investment and a particularly good year for agricultural production.

The World Bank says South Sudan that became the world's newest nation and Africa's 55th country on July 9, 2011 has faced renewed conflicts that have have undermined the development gains achieved since independence and worsened the humanitarian situation.

The gradual implementation of the September 2018 peace agreement including the formation of the unity government in February last year and agreement on number of states provided for a positive economic outlook last year also have been in a mix with subsequent shocks that included flooding in parts of the country, locust infestation, Covid-19 pandemic and lower oil prices, changing the outlook over a relatively short time period and exacerbated existing vulnerabilities and humanitarian needs.

In an overview, the EAC partner states, like many developing countries, aspire to transform their economies to a modern and industrialised status that could sustainably generate sufficient outputs to satisfy both domestic and export markets and rapidly increase per capita incomes to improve the living standards of their people.

The industrial sector in the region has developed into one of the main components of national and regional economic structures. The contribution of manufacturing to GDP in East Africa is estimated at 8.9 per cent that is considerably below the average target of about 25 per cent that the states have set for themselves to achieve by 2032.

AT last, the Prosecutor ...

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Author: DEUS NGOWI

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