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By Naome Namusoke /KMA Updates
Arusha, Tanzania | In a major boost for East Africa’s industrial transformation agenda, the East African Business Council (EABC) and the African Development Bank (AfDB) have signed a landmark USD 1 million grant agreement aimed at driving sustainable industrialization across the region.
The agreement, signed in Arusha, marks a key milestone in enhancing regional economic integration and advancing the competitiveness of priority manufacturing value chains within the East African Community (EAC) — notably edible oil, leather, and textiles.
The partnership is part of a broader initiative to stimulate industrial development and economic resilience in East Africa by building robust, inclusive, and sustainable manufacturing sectors. The grant will support technical assistance, research, policy dialogue, and capacity-building efforts aimed at unlocking the full potential of regional value chains.
“We are thrilled to partner with AfDB on this vital project that paves the way for stronger regional value chains, greater market access, and inclusive growth that benefits businesses and communities across East Africa,” said Mr. Adrian Njau, Acting Executive Director of EABC, during the signing ceremony.
The initiative is aligned with the EAC Industrialization Policy and Strategy (2012–2032), which seeks to increase the manufacturing sector’s share of GDP to 25% by 2032, up from the current average of around 10%. Despite EAC’s significant market potential and youthful workforce, the region’s industrial sector has remained underdeveloped, largely due to fragmented markets, inadequate infrastructure, and limited private sector capacity.
According to the African Development Bank, Africa’s industrial GDP accounts for less than 15% of total GDP, with East Africa lagging despite its demographic and economic advantages.
The newly signed grant will address these challenges through:
Enhancing the industrial capacity of SMEs and large enterprises in priority sectors.
Fostering public-private dialogue to shape conducive industrial policies.
Promoting evidence-based advocacy to dismantle regulatory and market barriers.
Strengthening the ability of businesses to leverage regional frameworks such as the EAC Customs Union, Common Market Protocol, and the African Continental Free Trade Area (AfCFTA), which opens access to a continental market of 1.3 billion consumers.
A unique feature of the initiative is its strong emphasis on Environmental, Social, and Governance (ESG) principles and gender inclusion. The project aims to integrate Small and Medium Enterprises (SMEs), women, and youth-led enterprises into industrial value chains, recognizing their critical role in economic development and job creation.
Over 1,500 industries, including SMEs, are expected to directly benefit from the project through access to capacity-building programs, market linkages, and policy advocacy platforms.
This agreement is part of AfDB’s broader Ten-Year Strategy (2024–2033) to scale up and accelerate industrialization across Africa, particularly by boosting manufacturing and regional integration. It also supports AfDB’s “Integrate Africa” High 5 priority, which focuses on removing barriers to movement of goods, services, and people across African borders.
Through this initiative, EABC and AfDB are reinforcing their shared vision of building a competitive, inclusive, and sustainable industrial sector that will position East Africa as a key player in continental and global value chains.