Work started on developing the EAC industrialization policy

The action plan will highlight the roadmap for implementing the first phase of the policy and strategy over the next five years (2012-2017). The action plan will in the short term address challenges that have constrained industrialisation within the region.The meeting draws attention to key interventions required to put the region on a sound platform for structural transformation and sustainable growth as well as identify specific programmes and projects with indicative resources, impact indicators and target groups, and means of verification and implementation agencies.

In a keynote address at the forum, EAC Director of Productive Sectors, Dr Nyamajeje Weggoro reiterated the commitments made by partner states to cooperate in matters of industrial development and in particular promote self-sustaining and balanced industrial growth as stipulated in Articles 79 and 80 of the EAC Treaty.  

"The overall objective of the policy and strategy, which provides intentions and strategic areas of focus to guide EAC towards attaining an industrialised economic status by 2032, is to create a modern competitive and dynamic industrial sector, fully integrated into the global economy. Presently, the contribution of the industrial base in East Africa is estimated at 19.2 per cent GDP, of which only 8.9 per cent is generated from manufacturing," he said.

The Director noted that the level of contribution is low in relation to the average target of about 25 per cent for all the partner states and in comparison to other industrialized states in Asia, Europe and America. "Of course this is an ambitious target given that the leading economies in the world average, 20 per cent with China at 21.7 per cent, Germany 20.9 per cent and Japan 20.1 per cent.

Our region therefore needs to undergo a structural transformation in the manufacturing sector through higher value addition and product diversification based on comparative and competitive advantages in the region," he added. The action plan once in place will be a vital instrument in guiding and coordinating the implementation process. It will in particular support the EAC towards achieving deeper levels of integration and facilitate industrial collaboration among key stakeholders with a view to strengthening national and regional industrialisation efforts.

In his remarks, GIZ Head of Component on Economic Policy, EAC-GIZ Programme, and Mr Florian Bernhardt noted that the EAC had adopted a modern approach to industrial policy making.  Mr Bernhardt emphasised that GIZ considers industrialisation as a key aspect for development and the EAC regional integration process.

The EAC industrialisation strategy identifies six strategic regional industries in which the region has potential comparative advantage including,   iron-ore and other mineral processing; fertilizers and agrochemicals; pharmaceuticals; petro-chemicals and gas processing; agro-processing; and energy and bio-fuels.

The meeting was attended by experts from Ministries responsible for industrialisation and planning in the EAC partner states; the private sector and manufacturing associations in the region as well as industry support institutions including but not limited to technology, technical training, standards, research, investment and export promotion institutions and regional and national development institutions.

The EAC Industrialisation policy and strategy provides general contours of policy intentions and strategic areas of focus to guide EAC towards achieving the set goals and in particular, attaining industrialised economic status by 2032. The EAC Industrialisation policy is intended to address the challenges facing the region particularly, the need to build a more diversified regional economic structure. 

The formulation of the policy was accomplished through a comprehensive and inclusive process, based on analysis and wide consultations with stakeholders in the partner states.The policy is aligned to the relevant articles of the treaty in particular Article 79 and 80 which provide for regional co-operation in matters of industrial development as well as Article 44 of Common Market Protocol in which the partner states undertake to adopt common principles to cooperate in industrial development in the region.

Some of the plans include diversifying the manufacturing base and raising local value added content (LVAC) of resource based exports to   40 per cent from the current estimated value of 8.62 per cent by 2032.They plan to strengthen national and regional institutional frameworks and capabilities for industrial policy design and implementation and delivery of support services to ensure sustainable industrialisation in the region.

There is also a need to strengthen technology and innovation capabilities to facilitate structural transformation of the manufacturing sector and upgrading of production systems.The partner states plan to increase the contribution of intra regional manufacturing exports relative to total manufactured imports into the region from 5 per cent to about 25 per cent by 2032 and increase the share of manufactured exports as a percentage of total merchandise export to 60 per cent from an average of 20 per cent.

Transforming micro small and medium enterprises into viable and sustainable business entities capable of contributing up to 50 per cent of manufacturing GDP from 20 per cent base rate is also included in the whole plan.

Author: Compiled by DEOGRATIAS MUSHI

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