Remarks by President Jakaya Kikwete
At the 3rd East Africa Community on
Investment in Kampala, Uganda
REMARKS BY H.E. JAKAYA MRISHO KIKWETE, PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA
DURING THE CLOSING CEREMONY OF THE 3RD EAC INVESTMENT CONFERENCE
Speke Resort, Munyonyo, Kampala, Uganda, 30 April 2010
Your Excellency Yoweri Museveni, President of the Republic of Uganda;
Your Excellency Yves Sahinguvu, Vice President of the Republic of Rwanda;
Your Excellency Bernard Makuza, Prime Minister of the Republic of Rwanda;
Rt. Honourable Raila Odinga, Prime Minister of the Republic of Kenya,
Honourable Chairman of the Council of Ministers;
Honourable Ministers and Officials from the EAC Partner States;
The Secretary General of the East African Community;
Members of the Business community,
Distinguished Guests,
Ladies and Gentlemen,
On behalf of all of us gathered here, and on my own behalf, I would like to thank H.E. Yoweri Kaguta Museveni, President of the friendly and sister Republic of Uganda, for hosting this important conference. We are enjoying every minute of our stay and we are grateful for, the customary warm reception and gracious hospitality of the people of Uganda.
Excellencies, Ladies and Gentlemen,
We have come to the end of the 3rd East Africa Investment Conference. By all accounts, this conference has been a resounding success. I have been informed that all the roundtables, the presentations, and the discussions that have taken place over the past two days have been up to speed and lived up to our expectations. This has indeed, symbolised another important step forward being taken in our regional integration endeavours and quest for improving the economic conditions of our region and its people. We should be proud of this unity of purpose.
Ladies and Gentlemen,
It is a difficult task, indeed, to give a speech as the last speaker after eloquent speeches have been made. It is even harder after two days of detailed dialogue and discussions, covering wide range of subjects, concerns, and interests of our region. Almost everything important that needed to be discussed regarding trade, investment and the cost of doing business has been discussed. For all of us, the most important thing now to do is take action on what we concluded needs to be done. So, I will not talk at length, I would like to mention a few things for the sake of emphasis before we walk out of this room.
The first issue I would like to raise is a general point on these conferences. I am delighted that, with this successful 3rd Conference, we are on our way towards creating a regular, credible, multi-stakeholder forum for advancing trade and investment in our region. It is, therefore, important that there are tangible results from these conferences – besides sharing experience and information. Successive conferences should go beyond information or experience sharing to agreeing on concrete actions to be taken on each of the issues that need action.
I understand that, during this conference, there was a report on the previous conferences. This is a good thing. However, if we are to succeed, we have to go beyond the readouts of previous proceedings. We need to have follow-up discussions and follow-up actions on the decisions of our previous meetings. And, for concerns raised and commitments made in each conference, there ought to be obligatory reporting-back on implementation of the issues and commitments made. If, for instance, in this conference, Tanzania commits to deal with delays and corruption at weighbridges and checkpoints, there ought to be a responsibility to report on implementation at the next conference. In this way these conferences will have meaning instead of being mere talking shops.
Excellencies, Ladies and Gentlemen,
The coming into force of the East African Common Market in July, 2010 marks a significant milestone in advancing the EAC cooperation and integration agenda. The Common Market enhances the position of our region as a premier investment destination. But, the Protocol is not an end in itself. We celebrate the coming into force of the Protocol not as an occasion but for what it implies. The Common Market Protocol is a facility that needs to be taken advantage of. It is meant to enhance intra-regional trade and investment and the competitiveness of our region.
All our discussions in the three conferences eventually converge on the issue of cost of doing business and the general investment climate in East Africa. This is the crux of the matter. I would like to assure the business community that it is not in the interest of governments of the East African Community member states that the cost of doing business remains high. I believe you will be the first to acknowledge that, over the past decade, governments have worked hard to improve investment climate in their respective countries. I know more work needs to be done and there is still room to improve pro-investment and pro-business policies and measures. You can count on the political will of the leaders in the region for this to be a reality.
Ladies and Gentlemen,
I know also that there are things, including policy measures, that we, as governments, can do quickly, easily and cheaply to improve the region’s investment climate. However, the biggest impediment to the improvement of the investment climate in our region is not the will but the prohibitive financial resources required to build and maintain roads, railways, ports, power plants and other physical infrastructure in our region.
Poor and inadequate infrastructure in the region is obviously a challenge in terms of being debilitative and making or keeping the cost of doing business high. On the other hand, however, these challenges provide opportunities for investments for those who are ready and willing to partner with governments in infrastructure development in East Africa. They can do so, on the basis of Public-Private Partnership (PPP) or Build, Operate and Transfer (BOT). But they do it on their own, where possible and where permissible.
Ladies and Gentlemen;
In the past two years, there have been remarkable achievements in infrastructure development in the region. Partner States have transited from feasibility studies to actual implementation of regional infrastructure projects. For instance, work is on-going of upgrading the Arusha-Namanga-Athi River Road and the rolling out of the power inter-connection between Kenya and Tanzania. We are also proceeding well with the revamping of the operations of East Africa’s major ports of Dar es Salaam and Mombasa. The process of easing and streamlining road transit procedures, in order to facilitate ease of movement of cargo from these ports to Uganda, Rwanda and Burundi is ongoing. Preparations for building the Isaka- Kigali-Bujumbura Railway are progressing well.
Priority has also been placed on the modernization of the East African railway networks focusing on the Central and Northern Corridors. In this endeavor, Tanzania hosted an East African Railway Conference in Dar es Salaam in March 2010 for purposes of drumming-up support from our development partners and attracting private investor participation. The implementation of these vital projects and programmes require resources which the region can mobilize internally and externally. Internally, Partner States should fast-track the establishment of an EAC Development Fund.
Another area that requires urgent attention is the implementation of the EAC Power Master Plan. The prevailing unreliable, inadequate and highly priced power supply in the region is one of the sources of the high cost of doing business. I am aware that all Partner States have been taking measures to address these constraints. I am of the view that the solution to the problems relating to power supply can be expedited if EAC partner states undertake joint promotion of investments to exploit our existing energy resources potential. Fortunately, there are plenty of energy resources in our region, individually as nations and collectively as the East African region. If harnessed properly this potential can enhance power supply and ensure adequate availability and at affordable prices.
Ladies and Gentlemen,
Economic and political stability as well as predictability of our policies are critical factors in attracting investments. Macroeconomic stability of the past decade in our region has served us well. The successes that we enjoy at the moment are very much a result of good economic policies that we all continue to pursue. My humble appeal to all of us is to stay the course. We should not renege from the good policies and practices. The entrenchment of prudent monetary and fiscal policies and discipline undertaken since the mid - 1980’s is critical in maintaining investor confidence and ensuring sustainable development in our region.
The enactments of facilitative laws, including the Standardization and Quality Assurance Act and the Competition Act, have been rewarding. Legal frameworks have been put in place for cross-border investment in the areas of private banking, insurance, mobile telephones, mining, manufacturing and tourism. As a result, the EAC region has become a beehive of business activity in the form of cross-border investments. New businesses are springing up as well as mergers and acquisitions taking place everywhere. Thus, the promotion of businesses which enjoy economies of scale and scope should give birth to strong East African companies which can also be players at continental and global levels.
Ladies and Gentlemen,
At the moment there are very few East African companies of recognisable stature even on the African scene. Looking at the list of Top 500 African Companies, the highest ranked East African company, in terms of turnover, is KENOLBIL of Kenya which is at number 79. The next is Kenya Airways, at 133, then Safaricom, at 139. The highest ranked East African company outside Kenya is Vodacom Tanzania, at 305 and then MTN Uganda at 316. East Africa has enough brains and resources to acquire continental and even global leadership in business. Indeed, there is enough internal consumption to propel our companies to become giants. But, this has so far not happened. We can make it happen. I believe we can.
The bottom line is that we need to increase investments into our region and within our region. Unfortunately, East Africa is that region in Africa which attracts least investments. In 2008, only 0.35 percent, of world’s flow of investment, which is about $753 billion, came to East Africa. Developing countries as whole attracted 36.6 percent of total global FDI. The share of East Africa of the total FDI flow to developing countries is also very marginal, at 0.96 percent. With regard to stock of FDI, again the story is the same. East Africa accounts for mere 0.26 percent, or $39.5 billion, of total world stock of FDI, which stands at $9.6 trillion. Our region has 0.9 percent of FDI stock of developing countries.
These numbers, Excellencies, Ladies and Gentlemen, paint a gloomy picture of our region. In many ways it is depressing, but, East Africa is not a hopeless case because I know we can do better. Our region is well endowed with natural resources and a people who are capable of doing more and better than what is actually happening at the moment. We just have to put our act together and do more on the side of action than we do on the part of talking and rhetoric.
Excellencies, Ladies and Gentlemen;
It is now my singular honour and pleasure to declare the 3rd EAC Investment Conference concluded and closed. I thank you for your kind attention.
God Bless East Africa!
Long live the East African Community!
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