Impact of Manufacturing Sector on Economic Growth in East Africa: Evidence from World Bank National Accounts Data

The paper analyses the impact of the manufacturing sector on economic growth in Kenya, Tanzania, Ethiopia and Uganda using World Bank national accounts panel data for the period 2000-21. During the two decades, the share of the sector’s growth to gross domestic growth remained low. Agriculture and service sector accounted for the greatest share in the growth of the economies being studied. The study uses fixed effects regression for analysis. Results show that manufacturing sector promotes economic growth in line with Kaldor’s first law. The findings suggest the need to support and strengthen infrastructure and working environment for manufacturing firms, as well as woo more firms especially in areas of comparative advantage.