The Problem

The East African Community (EAC) holds immense potential to drive sustainable industrialization and economic growth, yet it faces systemic barriers that undermine its industrial and

developmental aspirations.

• A youthful population on the rise with over 70% under the age of 35 years with significant youth unemployment challenges.

• Non-tariff barriers (NTBs), such as trade bans and misaligned tax regimes (e.g., 16% VAT in Kenya vs. 18% in Uganda), further disrupt intra-regional trade, inflating costs and hindering market integration.

• Value addition to raw materials remains a significant challenge, with the EAC exporting over 70% of its raw commodities (e.g., minerals, coffee, tea, cotton) unprocessed, fetching prices 5- 10 times lower than processed goods. This is driven by inadequate processing infrastructure, high energy costs (30% above global averages), and limited technological adoption, which constrain the region’s ability to create jobs and boost GDP through high-value products.

• Limited access to green financing restricts investments in renewable energy and climate-smarttechnologies, while SMEs and youth, critical to the region’s millions of manufacturing jobs, face barriers to capital and markets.

• Illicit trade, a pervasive issue across all economic sectors, erodes market integrity and economic stability

• Tourism, a key economic driver, is underutilized due to uncoordinated regional marketing, visa policy disparities, and inadequate infrastructure like limited regional transport networks, missing opportunities to integrate tourism with industrial value chains like agro-tourism and cultural products.

• Infrastructure deficits, including storage shortfalls exacerbate post-harvest losses, undermining agro-industrial potential which contributes 24% of regional GDP and 70% employment.