East African Community Secretariat, Arusha, Tanzania, 28 April 2010: His Excellency President Yoweri Kaguta Museveni of Uganda today opened the 3rd East African Investment Conference with a call to Development Partners to cooperate with the East African Community to deal with strategic bottlenecks bedeviling the development of the region. The President named inadequate electricity supply, poor roads and railway systems, and inadequate ICT infrastructure among these.
The President noted that the EAC Investment Conference, hosted at the Speke Resort in Munyonyo, Kampala this year, had become a major force for promoting East African integration and development, adding that the Investment Conference came at a time when there was great demand and focus on efficient and prudent utilisation of the region’s own resources and effective response to developments and trends in the global economic environment.
President Museveni said the establishment of the EAC Investment Conference stems from a clear recognition of the challenges, both internal and external, that the East African region faces as it strives to achieve regional competitiveness.
The challenges hinge primarily on the deficit of physical infrastructure, governance issues and human resource constraints in some critical fields. The problems of transportation of goods, including bureaucratic shortcomings, such as delays in clearing of goods at the ports of entry and exit; and moving trade along the highways, significantly impact business performance, noted the President.
He informed delegates that the EAC’s greatest asset was its abundant natural resources that have earned it the acclaim as a land of great opportunity. A key natural resource is water of which, with its many rivers and great lakes, the region had enormous potential.
Considering the region’s great need for advanced water management, conservation and utilisation systems, investing in the water sector alone, constitutes a major investment opportunity, President Museveni said, adding that the vast tracts of arable land the region is endowed with offer huge potential for investment in commercial agriculture, from livestock farming to horticulture, floriculture and agro-processing noted the President.
The President also spoke of the region’s mineral wealth and its tourism potential, both of which represent enormous investment opportunities. East Africa is blessed with sizeable deposits of soda ash, cement, fertilisers, gold, tanzanite, diamond oil and natural gas among others, while the region also boasts a wide array of flora and fauna as well as magnificent mountains, craters, lakes and rivers that guarantee attractive returns on investments in the hospitality and other service industries.
President Museveni disclosed that the EAC private sector development strategy together with the EAC regional industrialisation strategy; and EAC rural and agricultural development programme focus on creating opportunities for private sector partnership in the EAC integration and development.
This is in tandem with the preparation of the EAC Investment Policy and Strategy under which a transparent operating environment for investors is to be established where rules, regulations and administrative procedures are streamlined and harmonised. The President noted that phenomenal growth had been recorded in financial services, health care and education and ICT, which was among the fastest growing and most profitable sector of the regional economy with mobile telephony exceeding initial projections.
Uganda’s First Deputy Prime Minister and Minister for East African Community Affairs, Rt. Hon. Eriya Kategaya disclosed that inflows of Foreign Direct Investment (FDI) rose dramatically from US$692 million in 2002 to US$ 1.7 billion in 2008, resulting into an increase of FDI stock in the region to US$13.2 billion. He said Uganda and Tanzania were the leading recipients of FDI inflows, particularly through expansion projects relating to natural resource exploitation.
Hon. Kategaya noted that the most rewarding achievement was the intra-East African Community trade which indicate that in 2008, Uganda’s volume of trade increased by 87.9% to US$947.0 million from US$504.0 million in 2004. In 2008, Tanzania’s volume of trade increased by 65.3% to US$465.0 million from 281.3 million in 2004. In 2008, Kenya’s volume of trade increased by 91.6% to US$ 1,395.0 million from US$ 741.0 million.
The Minister also noted that the revenue collection by the individual Partner States in the region since the launch of the Customs Union in 2005 had greatly improved, citing growth in Kenya’s revenue collection from US$2,511.9 million in 2001/2 to US$6,538.3 million in 2007/8 and from US$300 million to US$650 million for Uganda in the same period.
In Tanzania, actual total tax revenue earnings continued an upward trend at a much higher average rate of 35.9% per annum from 2005/6 to 2007/8 compared to the average growth rate of only 23.3% attained between 2003/4 and 2004/5. “This is no mean achievement and pessimists have no cause to fear the integration of East African Community,” asserted Hon. Kategaya.
The Chairperson of the EAC Council of Ministers, Hon. Dr. Diodorus Kamala remarked that development of infrastructure was crucial for stimulating investments in many parts of the region whose potentials are yet to be exploited. Hon. Kamala reiterated that in order to unlock and unleash the existing potential and stimulate production and trade in the EAC economies, there is need to jointly invest, as public and private partners, in infrastructure development.
The Secretary General of the East African Community, Amb. Juma Mwapachu commended the work being undertaken by the region’s Investment Promotion Agencies in not only promoting their national investment agendas, but also for branding the EAC region as a preferable investment destination.
Amb. Juma Mwapachu affirmed that the entry of the Common Market from July this year would usher in a number of new opportunities which need to be exploited by the region’s entrepreneurs. “It is for this reason that this Investment Conference carried the theme “EAC Common Market: the Preferred Destination for Investment and Expanded Business Opportunities,” he said.
The Conference has attracted over 2,000 participants from within and without the region and runs until 30 April.