East African Business Week (Kampala)
Bobi Odiko
28 June 2008
opinion
Kigali has just played host to the East Africa Investment Conference on June 26 to 28, 2008, taking place back-on-back with the Summit of the EAC Heads of States.
The conference whose theme was 'Leveraging the East African Market through Trade and Investment', was called to discuss investment opportunities, challenges and solutions to investment. It was the inaugural such investment meeting among the Partner States.
The decision to pick Rwanda to host the inaugural event, no doubt casts the new Partner State in very positive light. According to Rwanda Minister of State for Investment Promotion, Hon. Vincent Karega,
Rwanda was chosen to host the conference because the country's investment climate has improved a whole lot. "Rwanda's economic transformation is on course and we believe it is healthy now to invest in Rwanda", Karega was reported to have told the media in a pre-conference meeting in Kigali. This is certainly true bearing in mind the country's incredible recovery post the genocide.
The two day meeting organised by the Rwanda Investment and Export promotion Agency (RIEPA) in collaboration with EAC, EABC, and other Investment promotion Agencies went an extra mile in engaging potential investors in the region to spur economic growth by creating a larger market for goods and services produced within the participating countries. It was an arena to showcase investment potential, forge partnerships and learn from others' best business practices.
It is suffice to note the meeting's timing concurred with the release of the results of the 2008 global enabling trade index published by the world economic forum whose returns however, showed the region needs to improve with regards to its record in enhancing competitiveness.
The index ranked Tanzania and Burundi at the bottom of the East African countries in terms of openness to international trade and investments - both important requisites for economic development. Tanzania was ranked 102 while Burundi was placed at position 117 in the series chart, which covered 118 countries.
The index shows that Uganda and Kenya are ranked 79th and 86th respectively, positions that likewise do not show efficiency in real terms. Rwanda's name missed out in the listing, which saw the top position awarded to Hong Kong for the first time. The report covers four areas: market access, border administration, transport and communications infrastructure, and business environment.
In a month's time, another 200 or so business people will converge in Kampala for the East African Business Summit. The discussants are mainly leading business people in the region responsible for shaping policy in competitiveness. Very plainly put, teething problems need to be addressed if EAC's ranking in the world business order is to improve and the region to harness benefits for the large market of more than 120 million people. Such issues must also find their way into the agenda of important meetings and fora held in the region time and again.
One of the major impediments to business in the region for example is the double taxation element. In the region, this simply means that companies with branches in other Partner States continue to pay corporate tax in the host nation in addition to what they stake out in their home headquarters. Talks about completion of a double taxation agreement have been in consideration for sometime now, but are yet to be finalized. The issue does not seem to have been addressed in the national budget days that were read simultaneously in the region earlier on in June. As a matter of fact, finance ministers simply skirted around the point during the pre-budget meetings where a number of reforms to be instituted were discussed.
Other areas needing deliberation include the ever-present gargantuan monster called Non Tariff Barriers in which all forms of unnecessary exigencies block the way of doing business. These are but two examples of challenges facing the Customs Union three years later as the process takes the next tangent curve towards Common Market. It is time some of the areas were smothered for the EAC to begin realising real benefits. Only a conducive environment devoid of challenges shall fork out greater volume of domestic and foreign investment - both recipes for developing the region.
The writer comments on socio-economic issues and is based in Arusha
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