SCALLING up infrastructure investments and adopting modern methods of management have been identified as significant benchmark in realising potentials in the business sector to contribute immensely to economic growth of the East African Community (EAC) partner states.
A recent study of the Northern Corridor found that the EAC region is the second in the world with the highest freight logistics costs accounting for about 42 per cent of the total value of imports.
"Surely, for the region to benefit from innovations in transport and logistics more investments are needed in roads, railways, ports and flyovers that would make businesses ride on much higher waves of increased productivity, efficiency and cost effectiveness," said Dr Enos Bukuku, the EAC Deputy Secretary General, Planning and Infrastructure.
He said at the launch of the Logistics Innovation for Trade (LIFT) Fund by the Trade Mark East Africa that there were areas in the region where fresh fruits and vegetables are not able to reach consumers who need them in markets beyond the production areas in villages and districts due to high transport costs.
The quality and cost of freight transport services play a critical role in the competitiveness of a firm and by extension a country's economy.
The World Bank Logistics Performance Index (LPI), which is a global ranking of the logistics performance of countries along some key indicators including customs clearance efficiency, the quality of trade and transport related infrastructure and the ease of arranging competitively priced shipments.
The LPI 2012 statistics show Tanzania being ranked highest in the East African at the 88th position out of 155 countries surveyed. Kenya is at 122, Rwanda 139 and Burundi 155 positions.
The state of affairs confirm that unless the logistics efficiency obstacles are addressed, the region's growth potential will be jeopardized.
According to Dr Bukuku trading, transportation and warehousing need to be modernised via innovative ways that would definitely result into an investment destination by choice as well as a logistics centre for goods and services.
The Deputy Minister for East Africa Cooperation Dr Abdulla Juma Abdulla said the EAC member states were committed to improve infrastructure and in particular logistics and transport.
