The Role of Economic Infrastructure in Promoting Exports of Manufactured Products: Trade Facilitation and industrialisation in the EAC
Integrating infrastructure and facilitating movement of people, goods and services
- Isaac M.B. Shinyekwa
- Anita Ntale
The paper estimates the impact of economic infrastructure on the exports of manufacturing products for the East African Countries, specifically, Uganda, Tanzania and Kenya. It departs from the literature that looks at infrastructure and development in general to facilitation of exports of manufactured products. An augmented gravity model is used to estimate the elasticities through which the proportion of economic infrastructure development required to generate a given proportion of exports of manufactured exports is calculated. Data used covers the period from 2001-2014 and is drawn from various sources including: COMTRADE, WEF, WDI and CEPII. Results provide evidence that that improvement in economic infrastructure generates huge gains in terms of export of manufactured exports; and there are more gains from hard infrastructure compared to soft infrastructure. Therefore the electricity, rail, road, airports infrastructure is paramount in boosting exports of manufactured products in the EAC region. It emerges that, transparency and accountability, internet connectivity and telephone subscription improve the efficiency and business environment which support the exportation of manufactured products. It is concluded that the mobilization of resources for investment in economic infrastructure to promote exports of manufactured products is inevitable for the EAC region.