Kenya and Tanzania's infrastructure buildup will support East Africa's industrialization in the coming decades, but the extent to which the region benefits from these initiatives will depend on governments' willingness to deepen regional integration, shifts in the international trading system, global growth outlook and technological changes. East African countries' infrastructure buildup will help provide employment for thousands of workers and stimulate regional demand through the procurement of materials. Although this will boost the region's economic growth in the short term, infrastructure upgrades will deliver their full potential in the long term by lowering transportation costs and supporting larger trade volumes. Even though Kenya and Tanzania are now competing against each other to secure investments, their contest will help shore up the attractiveness of East Africa as a whole for foreign investors. Importantly, the reduction in transportation costs will set the stage for the region to better leverage low labor costs...
