Comparative cost of production analysis in East Africa : implications for competitiveness and comparative advantage

The present study analyzes the comparative costs of production (COP) for coffee, maize, beans, potatoes, and textiles in three East African countries: Kenya, Uganda, and Tanzania. The analysis compares the costs of labor, rents, utilities, key inputs, capital items, and other variable costs; costs associated with the regulatory environment, including taxes, subsidies; and costs of services, including transport, insurance, energy (electrical and petroleum inputs), and banking, in the production process of textiles. In addition, the study ranks the three countries by subsector according to their competitiveness in cost of production and discusses where and when a given country has a specific advantage over the other two study countries. Recommendations on how the least competitive countries could improve their status are provided. The executive summary of the report provides a comprehensive summary of study findings and recommendations. Appendix 2 contains more detailed country-specific coffee COP analyses for Kenya, Uganda, and Tanzania. Similarly, Appendix 3 focuses on maize, Appendix 4 on beans, and Appendix 5 on textiles. Appendix 6 contains detailed comparative advantage analysis for maize and beans, and Appendix 7 gives a background description of the textile industries in the three countries.