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32 RCeOsLoUuMrcNe SGl|obLainl dNaeCtwaloarbkrese The manufacturing sector is lagging behind in East Africa.
In 2015, the manufacturing value added to the GDP ranged from 5.1% in Rwanda to 11.4% in Kenya. This is in line with the Sub-Saharan African average (10.5%) but much less compared to South Asia (16.3%) or Latin America (14.2%). Inadequate infrastructure and high utility prices make it less profitable to manufacture in the East African region compared to other regions of the world.
Despite these challenges, East African countries need to transform their
economies through the development of the manufacturing sector. First of all, East African countries have very young, fast growing populations, and need to absorb large numbers of youth into the labour market every year.
The manufacturing sector can provide
this opportunity, not only through direct employment but also through linkages with other economic sectors from which it can acquire inputs from the sector and which it can supply with its products.
Secondly, East Africa mostly produces and exports primary products such as tea, co ee, and minerals. However, the East African export basket is not diversi ed enough,
so when the prices or volumes of these exports drop for any reason, the region and its citizens face challenges. Diversifying production and export can make the economy more resilient to shocks.
Thirdly, manufacturing promotes learning and development of new skills, and allows for dynamic gains. Countries can not only take advantage of the current production, but also ramp up their skills to expand into new areas. They can gradually increase the complexity
of their products, and source an increasing number of activities in country.
With all these potential bene ts, it is not surprising that the East African Community (EAC) – the regional economic community that brings together six East African nations – wants to promote the manufacturing sector. In an attempt to develop the regional production capabilities, the EAC has granted a tax waiver to  rms who want to produce motorcycles in the East African region.
A huge domestic and regional market for motorcycles
Motorcycles are an integral part of life in East Africa. They are not just an important means of personal transport, they also provide livelihoods for many. In Uganda and in Kenya, the (in)famous boda bodas o er a cheap and convenient way to dodge the city tra c. In Rwanda, taxi motos reach parts of Kigali and of the rest of the country where bus lines do not operate, and where buses are present motos are simply much faster.


































































































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