New opportunities are opening up for logistics companies as East African governments focus on diversifying their economies away from commodity exports to manufactured goods.Regional integration is advancing in agriculture and food processing, and Kenya is becoming a more dominant regional supplier of manufactured goods, according to Sebastian Krantz of the Kiel Institute for the World Economy.His study identified Uganda and Tanzania as the main regional suppliers of agricultural produce. According to Trading Economics, Uganda’s most important export is coffee (22% of the total), followed by tea, cotton, copper, oil and fish.Tanzania’s main agricultural exports are tobacco, coffee, cotton, cashew nuts, tea and cloves.All countries in the region have active value-added food and beverage sectors, with Uganda supplying the most, followed by Kenya, says Krantz. “In manufacturing, Kenya has a distinct lead, followed by Tanzania and Uganda,” he writes.Kenya’s growth is projected to reach 5.2% on average during 2024-2026, mainly driven by the private sector as business confidence strengthens and the public sector continues to scale back, the World Bank predicts. It says Kenya’s growth is expected to benefit from the implementation of trade agreements under the European Union Economic Partnership Agreement, African Continental Free Trade A rea .There remains a strong agricultural link, with the food sector (sugar in particular) driving manufacturing growth in the third quarter of 2024, according to the Kenya National Bureau of Statistics.The Tanzania Investment and Consultant Group (TICGL) reports that the Q3 2024 Index of Industrial Production reported a 5.5% quarterly growth in Tanzania’s industrial sector, driven primarily by robust manufacturing performance. “While sectors like beverages, tobacco, and non-metallic mineral products show significant expansion, traditional industries such as mining, textiles and utilities face stagnation or decline,” says the TICGL . The star of the region is Uganda.According to Minister of State for Trade, Industry and Cooperatives, David Bahati, the industrial sector now accounts for 27.4% of gross domestic product.“This growth is attributed to an increase in manufacturing activities, which grew by a substantial 11.0% in the last quarter of 2023/24,” he told a media conference in December 2024.Manufacturing, the largest industrial subsector under Industry, contributes 16.5% of GDP and supports around three million jobs.The number of industries had grown from 81 units in 1986 to over 9 000 in 2024, he said.Efficient logistics chains are essential to support the transition to manufacturing-led economies.The Organisation of Economic Development is undertaking a study to explore East Africa’s freight connectivity and infrastructure capacity up to 2050 by evaluating the major regional projects under way and offers recommendations for targeted investments and performance improvements.Policy analyst Josephine Macharia told Freight Newsthat the project was currently under way so there were no findings or recommendations yet. “We should wrap up by June,” said Macharia. ER
