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East Africa: Fix Infrastructure, Investment Will Follow - Kagame
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The East African (Nairobi)
29 June 2008
Posted to the web 30 June 2008
Philip Ngunjiri
Nairobi
East Africa's dilapidated infrastructure sector featured prominently at the 1st East African Investment Conference held in Kigali, Rwanda, last week.
To improve the region's competitiveness in attracting foreign investments and to realise its socio-economic development, the infrastructure urgently needs fixing, was the main verdict.
The meeting took place at a time when poor transport infrastructure continues to be the main stumbling block to cross-border trade within the East African Community and also to the accessibility of the region for the outside world.
Rwanda is using the conference to showcase the success of the economic reforms it has undertaken since the 1994 genocide that claimed nearly a million lives.
The region, through its leaders, must get its development strategy off the drawing board and make the plan work through speedy implementation. If implemented, according to Rwanda's President Paul Kagame, the strategy should allow East Africa to make a decisive break with its current situation of congested and ineffective ports, dilapidated railway lines, broken highways, chaotic and snail-paced border crossings, and a multitude of weighbridges in a single state that encourage corruption - all obstacles that ruin rather than foster the prosperity that the region badly seeks.
President Kagame was giving a keynote address to the conference, which brought together some 800 business leaders from within the East African Community member states of Tanzania, Kenya, Uganda, Burundi and Rwanda and from outside the region.
Citing inadequacy and congestion in clearing regional cargo at the two principal East Africa ports of Mombasa and Dar es Salaam, Kagame added that goods bound for inland countries take up to 25 days to arrive. This is exacerbated by the poor conditions of both the Northern and Central Corridor highways - including the time it takes to cross borders which in some cases can be more than 24 hours.
Echoing similar sentiments, Uganda president Yoweri Museveni, pointed out that the region's poor infrastructure has been partly caused by relying on donor funds. He described the road network in the region as having a short lifespan.
"My people did not advise me that Third World roads last for only 15 years, European-type roads last for 50 years," Museveni said.
The Uganda leader advised the EAC partner states to always fund their own infrastructure projects instead of waiting for external assistance that comes with vested financial interests.
Citing Uganda, Museveni said the current power loadshedding was caused when the World Bank stopped him from developing the Bujagali hydro power project.
On his part, Kenya's President Mwai Kibaki said the region needs to expedite the completion of fibre-optic linkages as well as broadband networks in the region in order to reduce the cost of information technology-related facilities.
The fibre-optic backbone will substantially reduce telecommunications and data transmission costs and create thousands of jobs with minimal investment, he said.
East Africans are not short of dynamic industry and commerce to drive the East African agenda of private sector-led socio-economic transformation - as confirmed by the impressive gathering of business leaders attending the meeting, President Kagame noted.
Some companies in the region, he added, have the ability to enter into world-class innovative investment and trade ventures that lead to greater wealth and employment opportunities. These companies have entered the billion-dollar range in terms of market capitalisation, alongside their counterparts from South Africa and Egypt, the two countries that have traditionally been home to firms of that size.
Another powerful means that the region has for transforming itself are the East African people themselves, said the Rwandan president.
He gave the example of the recent Safaricom initial public offer, in which the company was supposed to raise almost $1 billion but ended up with five times that amount.
"This is the unexploited potential of local capital. Our people are our strength - a fact that directly challenges the old aid-dependency syndrome that looks to development assistance as a means of defeating poverty."
The three-day conference was jointly organised by the Rwanda Investment and Export Promotion Agency (Riepa), the EAC Secretariat and investment promotion agencies from the other four EAC members.
The conference was also graced by the EAC heads of state who were holding their 9th summit in Kigali at the time.
The theme of the conference was "Leveraging the East African Market through Trade and Investment."
The objective of the conference was to engage potential investors in the East African Community in business promotion in the region, showcase investment and trade opportunities in the EAC and attract potential investors in various sectors.
According to the organisers, the event provides an opportunity for the EAC countries to showcase their specific investment opportunities to business representatives within and outside the region.
The expected outcomes of the conference include a designated outline of investment opportunities in the East African Community as well as greater dialogue between the public and private sector. The conference was meant to offer opportunities for potential foreign investors to experience the EAC magic by exploring its varied investment and trade possibilities.
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In addition, it was expected that the conference would help increase intra-regional foreign and local investments as well as form partnerships or joint venture between regional entrepreneurs and foreign companies. Finally, the conference expected to increase exports and employment opportunities.
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