At the beginning of this month, businessmen, policy makers and other economic stakeholders from within East Africa and across the globe convened at the Speke Resort Munyonyo in Kampala for the first ever high-level Manufacturing Business Summit and Exhibition in the East African Community.

The fact that the forum was held at Speke resort, with its colonial undertones and heritage, reflects the fact that Africa is still grappling with the legacy of colonialism, especially the effects of national boundaries arbitrarily drawn up so many years ago in Europe, without recourse to local culture or historical affiliations.

It also illustrates how these boundaries continue to affect the economics, trade, immigration and geopolitics of these former colonies.

How so? For many nations in Africa today, it is easier to trade with Europe, America or China than it is to trade across what for many is an imaginary line in the sand denoting two different countries.

Yet there are individuals and companies grappling with how to extend their business beyond borders, setting precedents for those wishing to realise the pan-African dream.

The timing of the forum was also apt, coming at a time when many companies have embarked on regional expansion programmes that will see them grow their footprint across the East African market of more than143.5 million people.

This ability to operate across borders is important. Cross-border trade within the region brings in economies of scale and enables research and development for a bigger market. According to experts, including the World Bank, a major factor restricting intra-African trade is the problem of “thick borders,” meaning the complex tariff and non-tariff restrictions that slow down real and virtual commerce across African countries.

What this means is that businesses that operate across borders in Africa often spend as much time tackling cross-border bureaucracy as they do working on their core business.

The first ever East African Manufacturing Business Summit addressed this and many other challenges facing business by bringing together key manufacturers, suppliers, wholesalers and retailers as well as officials, policymakers and regulators from the East African region and beyond, and getting them to engage so as to create common ground and eliminate some of the bureaucracy that is such major headache for those engaged in trade.

From the continental perspective, it is clear that the larger market created through bloc building initiatives that intend to merge the EAC, SADC and Comesa — the Tripartite Trade Area is expected to command a market size of nearly $1 trillion, in terms of GDP, with a consumer base of 700 million people in 26 countries — will result in huge efficiency gains and provide impetus for growth of high-tech and capital.

A majority of investments are however still directed at extractive industries, particularly the oil sector and infrastructure projects.

The manufacturing sector currently contributes a paltry 10 per cent to the EAC region’s GDP as compared with the agricultural sector at 34.7 per cent, the extractive sector at 10.8 per cent and services at 44.8 per cent.

Currently, the installed capacity for the entire motor vehicle assembly industry is about 30,000 units, which is more than the requirements of the East African Community for new vehicles. Unfortunately, the industry is utilising less than 20 per cent of that capacity.

This provides growth opportunities as the regulatory framework continues to be implemented for the sector. Of great beneficial impact for instance would be the full implementation of 25 per cent duty on imported vehicles as per the current East African Community common external tariff (CET).

The potential for manufacturing and agri-business driven economic development in the East African region is enormous, given the manufacturing deficit in the region, where up to 70 per cent of total demand for imports is attributable to manufactured products.

Growth in these sectors will be sweet music to the automotive sector, which helps these producers to get their products to market.

Similarly, opportunities for agri-business across the region are substantial, considering the good agro-ecological conditions in most parts of the EAC and growing demand trajectories in both regional and international markets.

Rita Kavashe is managing director of General Motors East Africa Ltd