DAILY NEWS Reporter
The EAC Industrial Competitiveness
Report 2017, launched in Dar es Salaam yesterday, shows that EAC member
States are losing their shares in the lucrative regional market to
developed countries through imports of what could have been produced
locally.
China and India, as EAC top trading
partners, are leading the pack of developing countries that are taking
advantage of the lucrative EAC market through imports of items that the
manufacturing sector has capacity to produce, the report shows.
According to the report, manufacturing
sector growth had slowed down in recent years from 5.3 per cent between
2005 and 2010 to 4.6 per cent between 2010 and 2015.
The performance falls short of 10 to 15 per cent annual growth rate mentioned in the EAC Industrialisation Policy and Strategy.
The report shows that the manufacturing
sector growth rate in the EAC region is well above the global average
which has been 1.1 per cent between 2010 and 2015, but is low compared
to similar countries in sub-Saharan Africa and other successful
developing countries.
It shows that manufacturing sector
growth in Ethiopia was 14 per cent, ECOWAS 11.8 per cent, Vietnam 9.6
per cent and SADC (excluding South Africa and Tanzania) 5.3 per cent
annual average growth since 2010.
Due to growth decline, the share of the
manufacturing sector to the economy has been contracting from 9.8 per
cent in 2000 to 8.5 per cent in 2015, the report shows. The performance
is not leading to the desired structural change towards manufacturing
and falling short again of the regional target of 25 per cent by 2032.
Growth in manufacturing growth capacity
is high on average, but declined from 22.5 per cent between 2000 and
2005 to 1.7 per cent per annum between 2010 and 2015. According to the
report, the main weakness is on poor linkages of manufacturing sector
with other sectors of the economy.
It argues that an important cause and at
the same time consequence of the limited performance of the
manufacturing sector lied in the disconnected fabric of the industrial
sector of EAC partner States, impressing only weak backward and forward
linkages among manufacturing sub sectors as well as non-manufacturing
sectors.
In his opening remarks, the Permanent
Secretary in the Ministry of Industries, Trade and Investments, Prof
Elisante Gabriel, said EAC member States need to focus on making optimal
use of comparative advantage and enhance competitiveness of the region
instead of competing against each other.
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