Investments In Infrastructure Could Spur EAC Goods, EPRC Report

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The study says the largest gain in manufactured exports is likely to be realized through investment in the stock of road infrastructure, electricity and public transparency for the individual EAC countries analysed.

Investments in quality infrastructure could generate huge gains in facilitating export of manufactured products from the East African community member states says the latest study by the Economic Policy Research Centre (EPRC)

The results of a study lead by Dr. Isaac Shinyekwa, the Head of Trade and Regional Integration Department suggests investments in hard physical infrastructure like roads, railways, airports has more potential to generate a greater impact on manufactured exports compared to soft infrastructure.
 
Dr. Shinyekwa and Anita Ntale in a study "The role of economic infrastructure in promoting export of manufactured products, Trade facilitation and industrialization in EAC"  say it provides policymakers with empirical information about the effectiveness of possible interventions in trade facilitating infrastructure that would enhance the growth in manufactured exports within the EAC region.
 
Shinyewkwa in an interview said improvement in infrastructure and border and transport efficiency reduce the number of days and documents needed to export, hence leading to more exports of manufactured goods.
 
 
The study says the largest gain in manufactured exports is likely to be realized through investment in the stock of road infrastructure, electricity and public transparency for the individual EAC countries analysed.
 
They suggest that a 10 percent increase in road infrastructure investment is likely to increase manufactured exports by 48 percent for Uganda, 7 percent for Kenya and 111 percent for Tanzania.
 
It says when contrasted with railway infrastructure, results suggest that a 10 percent increase in its investment is likely to lead to an average between 6 to 10 percent increase in exports of manufactured products for the three countries.
 
Electricity according to the study remains an important category of infrastructure with a 10 percent increase in investment likely to lead to a 15 percent increase in exports of manufactured products in Uganda, 35 percent in Kenya and 12 percent in Tanzania.

Investment in air transport according to the study will bear significant gains in manufactured exports of about 7 percent and that increasing transparency and accountability and reducing corruption (Soft infrastructure) by 10 percent leads to an increase in manufactured exports by 8 percent in Uganda, 9 percent in Kenya and a massive 34 percent in Tanzania.
 
Improving trade facilitation by reducing the number of documents and days in the exportation process generates large gains in increasing exports of manufactured goods.

 
The issues raised in the study were key to the recent meeting in Masaka between President Museveni and his Tanzanian counterpart, Dr. John Pombe Joseph Magufuli. 

Tanzania Port Authority Director General, Engineer Deusdedith Kakoko said it is crucial for countries in east Africa to look at both hard and soft infrastructure.


//// Cue In "There will be new roads…

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He said the region still has pressing needs in both areas, whether it be physical connectivity with the transport and electricity.

Kakoko says the relative lack of electricity is evident when flying into many East African cities at night, where dim lighting from generators and flickering fires competes with lights supplied by power grids.

The presidents of the two countries oversaw the opening of one stop boarder post at Mutukula as part of the efforts to increase trade between the two countries.

The one stop boarder post managed by the Uganda Revenue Authority (URA) and the Tanzania Revenue Authority (TRA), the project worth $12, 703, 656, is funded by United Kingdom's Department for Foreign Aid (DFID) and Global Affairs Canada through Trademark East Africa (TMEA) at 170 million dollars.
 
Each of one stop boarder post P has more than 30 governmental departments, including among others, customs and immigration, an inspection shed hall, clearing and forwarding agents' block, police, officers of forestry in a move aimed at reducing the border crossing time.


Frank Matsaert, Chief Executive Officer of Trade Mark East Africa said many of East Africa's border posts suffered from poor infrastructure and lengthy procedures, so combining upgrading of the physical infrastructure with integrating trade procedures is  key to reducing time taken for goods, and people to cross borders.

/// Cue In "We looked at before

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He says it would take up to 5 days for Trucks to cross over from Kenya into Uganda and would take up to 18 days for a truck to travel from Mombasa to Kampala. That has according Matsaert reduced to between 4-5 days. The queues of trucks have disappeared. The time to clear goods has reportedly dropped by 80%.