DAR ES SALAAM, Tanzania — Regional industry leaders and policymakers have called for predictable trade policies, affordable industrial finance, and urgent structural reforms to strengthen manufacturing and value addition across the East African Community (EAC).
The call was made during a two-day Public–Private Dialogue (PPD) co-hosted by the East African Business Council (EABC) and the African Development Bank (AfDB). The forum brought together 65 representatives from regional governments, the EAC Secretariat, manufacturers, and development partners to address systemic constraints affecting industrial competitiveness in the leather, textiles, and edible oils sectors.
The Resource-Manufacturing Deficit
Opening remarks delivered on behalf of EABC Executive Director, Ahmed Farah, highlighted a severe mismatch between East Africa's abundant natural resources and its actual industrial performance. According to trade data from 2025, the region remains heavily reliant on costly foreign imports to meet local demand:
- The Leather Sector: Despite producing approximately 370,000 tonnes of hides and skins annually, the EAC imported US$566 million in footwear and leather goods in 2025. Conversely, regional exports of raw and semi-processed leather stood at just US$46 million.
- The Textile Sector: Only 37% of the region’s 119,000 tonnes of cotton lint is spun locally. This drove textile and apparel imports to US$3.24 billion in 2025, vastly overshadowing the US$970 million generated from exports.
- The Edible Oils Sector: Local production covers a mere 37% of regional consumption. As a result, the EAC spent US$3.1 billion on edible oil imports in 2025, while exports stood at US$1.2 billion.
Pervasive Capacity Underutilization
A Growth Diagnostic and Competitiveness Study presented by Dr. Onesmos Shuma of the Excellon Group revealed that policy inconsistencies and structural barriers are crippling factory output. The study found that 79% of surveyed firms operate below 75% of their production capacity, while 67% have been forced to delay or cancel investments. Furthermore, 78% of businesses face technological gaps, even though 76% believe they could source more raw materials locally within the EAC.
The sector-specific breakdown of factories operating below 75% capacity includes:
- Leather and Footwear: 86% of firms (with 79% postponing investments).
- Edible Oils: 75% of firms (with 59% postponing investments).
- Textiles and Apparel: 74% of firms (with 61% postponing investments).
The study identified six core bottlenecks choking industrial growth: restricted access to raw materials, lack of production-cycle finance, technology deficiencies, weak buyer-supplier linkages, skill gaps, and high trade operating costs.
Calls for Harmonized Trade Instruments
Industry experts stressed that regional trade mechanisms must operate as a single, coherent system rather than a fragmented network. Dr. Margaret Chemengich of Charmy Investments pointed out that 25 out of 39 "stays of application" affecting these value chains have been repeatedly renewed in every national budget since the 2022/23 financial year, disrupting market stability. Discrepancies also persist in tariffs; for example, the applied duty on refined sunflower oil ranges from 26% in Tanzania to a steep 60% in Uganda.
Frank Dafa, Executive Director of the Confederation of Tanzania Industries (CTI), alongside other regional panellists, emphasized the need to link agriculture and livestock directly to manufacturing through tighter vertical integration. They urged the private sector to back their policy proposals with hard evidence regarding production capacity, market demand, and employment impact to facilitate data-driven policy reviews.
Commercially Viable Solutions
The Chief Guest, Amedeus Arbogast Mzee from Tanzania’s Ministry of Foreign Affairs and East African Cooperation, concluded that the region must move toward commercially viable solutions backed by clear timelines and measurable outcomes.
Delegates ultimately recommended a framework of priority actions focused on stabilizing raw material supply chains, introducing flexible value-chain financing, upgrading shared environmental and testing infrastructure, and standardizing conformity assessments to reduce cross-border business friction. Progress will be rigorously monitored through key performance indicators, including regional sourcing volumes, compliance costs, and overall industrial capacity utilization.
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