Structural Change in East Africa: Patterns and Drivers

Abstract

This study analyzes structural change patterns and derivers in nine East African countries for the years between 1990 and 2018. The task presented value-added, employment share, and productivity for twelve sectors using the Economic Transformation database of Groningen University. From the output side, the study result found a reduced agricultural share in GDP compared to that of service and industrial sectors. From the employment perspective, a reduction of employment was also observed in the agricultural sector. The sector released labour to other sectors and has also room to make additional releases as the productivity gap between the agriculture and other sectors is high. The study also found positive labour productivity growth during the period. The productivity growth was sourced from within, between and dynamic effect in combination; though, the lion share was sourced from between (structural change) sources. Sect orally, the manufacturing industry was punching below its weight. In sampled countries on average, only 4 per cent contribution was done by the manufacturing sector for overall structural change. Further, the result from the empirical task demonstrated that, the structural change observed in the region was potentially affected by initial agricultural employment share in the economy, investment, and population size. Keywords : productivity, productivity growth, structural change, value-added, employment share, East Africa. DOI: 10.7176/JESD/13-13-02 Publication date: July 31 st 2022