Öz Structural transformation is about increase in the contributions of non-agricultural sectors to the overall growth of an economy and a transition from low to high productivity. Evidence shows that it has led to increase in productivity of industrial and service sectors. However, the agrarian scenery of Common Market in Eastern and Southern Africa has only enhanced growth, the growth has not optimally translated to sustainable development. This study argues that there is a link between structural transformation and sustainable development. Theoretically, it leans on Prebisch-Singer hypothesis and employs system generalized method of moments estimation technique for the analysis between 2005 and 2016. Its empirical findings show that the poor performance of the manufacturing sector is caused by weak institutional settings in the region. It also reveals the indispensability of transformation of production patterns and investment in technology via modern infrastructure so as to create more jobs and improve living standards in the region.