The Role of Economic Infrastructure in Promoting Exports of Manufactured Products: Trade Facilitation and Industrialisation in the EAC

The paper estimates the impact of improving economic infrastructure in the EAC region on exports of manufactured products. The analysis specifically departs from the general analysis in the literature by looking beyond the impact of infrastructure (trade facilitation) on exports in general, and delving into exports of manufactured goods. The results suggest that improving economic infrastructure quality generates huge gains in terms of exports of manufactured products from the EAC Member States. Specifically, hard physical infrastructure has more potential to generate a greater impact on manufactured exports compared to soft infrastructure. It is evident for soft infrastructure that; transparency and accountability; internet connectivity and telephone subscription improve the efficiency and business environment which supports exports of manufactured products. Illustrative estimates demonstrate that improvements in infrastructure and border and transport efficiency reduce the number of days and documents needed to export, hence leading to more exports of manufactured goods. Therefore, the paper provides policymakers with empirical information about the effectiveness of possible interventions in trade facilitating infrastructure that would enhance the growth in manufactured exports within the EAC region.