The Assembly wants the region to prioritise harmonization of investment initiatives and incentives if the bloc is to be promoted as a single investment area. To this end, EALA is calling for the formulation of an advocacy plan to spur investment policy and strategy as well as enactment of a regional law on investments.
The legislators also want a framework in place to ensure that specialization in investments are encouraged among the Partner States as opposed to intra-competition. In addition, they are calling for inculcation of mechanisms to enable investors to capitalize a certain percentage of profits in the EAC countries rather than repatriating all the money back to their home countries.
The issues are summed up in a report of the Communications Trade and Investment (CTI) on investment promotion policies in the region that was debated and adopted this morning as the EALA Session commenced in Kampala, Uganda.
The report follows a workshop on Investment Promotion policies conducted by the Committee and held in Kigali, Rwanda in April this year. The Objectives of the Report include;
i) to understand the regional investment policies and strategies in EAC
ii) to understand the individual EAC Partner State investment codes/strategies and
iii) coming up with possible recommendations on the way forward for investment, Private Sector and industrial development.
The report presented to the House by the Chair of the CTI, Hon Mukasa Mbidde, states that investors have shown renewed interests in the region and this is based on the premise that Africa is on the verge of transformation. The continent should thus continue to receive inflows to improve balance of payment in to their national economies, the MP stated.
Industrial and Industrial development is a critical area of co-operation by Partner States as outlined in Article 79 and 80 of the EAC Treaty and envisaged under Article 44 of the EAC Common Market Protocol.
According to Hon Mbidde, proper policies and strategies need to be sought to promote Small and Medium scale Enterprise development (SMEs). Priorities in this area include the region’s institutional capacity to deliver business development services and creation of an enabling environment for improvement of SME policies and regulations.
The report states that though the volume of intra-EAC investments is still low, there is potential to enhance it. Republic of Kenya is the leading cross border investor in the EAC while the United Republic of Tanzania is a leading recipient of cross-border investments according to the report. The leading investment segments include ICT, Energy (oil and gas), agro-processing, building and construction and services which include wholesale, finance, insurance, health and education). In Rwanda, there is a conducive business environment which includes e-registration of companies and electronic single window for customs declarations. The country also passed over 21 business laws between the years 2008-2011.
In Burundi, the country has continued to improve its business climate including removing customs duty on investment goods made in the EAC and COMESA region. In Uganda, the country has secured investments by anchoring the same under the Constitution and the Investment Code (1991). Its investment strategies include the establishment of a one-stop centre as well as nurturing and development of SMEs.
The EAC Investment Code was formulated in 2006 as one of the tools for investment and private sector promotion as envisaged in the EAC Development Strategy – 2011/12 to 2015/16.
The objective of the EAC Model Investment code is to enhance qualitative and quantitative local, regional and foreign investment into the region. The Model Investment Code intends to facilitate adoption of transparent, predictable regulations and laws to the potential investors, especially in matters relating to compensation for loss of investment and dispute settlement mechanism. The model code thus introduces the need to nurse private investments well beyond the initial period of attracting and facilitating new investors.
At debate today, Hon Nancy Abisai appealed for Partner States to ensure they created conducive environment for businesses.
“We have good policies of investment in the Partner States, but they are disjointed. Let us look for a way to harmonise them, she said. Burundi has easy mode of registration while the United Republic of Tanzania Investment Act provides excellent opportunities for incoming investors. In Uganda, the Government permits locals, foreigners and joint ventures to invest freely. Kenya on its part has removed a number of licenses that previously hindered registration making it easier now. All this needs to be lauded,” she said.
“The point of disconnect is the failure to capture the business environment regionally”, she added.
Hon Mike Sebalu called on EAC citizens to spread their investments in the region citing employment, generation of revenue and improvement of livelihoods as necessary.
“I salute H.E. Uhuru Kenyatta, President of the Republic of Kenya, who was recently here for his pro- trade and investment agenda. This is focal for promoting integration”, he said.
Hon Shyrose Bhanji said the re-establishment of EAC also sought inter alia to improve the livelihoods of its citizens. “Unfortunately, lives are disheartening even though we are talking of big investments” “There is little or no room for employment for many youth who are university educated”, she said.
Hon Bhanji called on Partner States to put emphasis on small-scale farmers to create employment and said EALA can play a key role in educating the masses.
Hon Leonce Ndarubagiye called for a regional law on anti-corruption and stiffer penalties to stem the vice, lamenting that it was contributing to killing investments in the region.
Hon Patricia Hajabakiga said real economic development can be realized by meeting with investors to ascertain that the policies on the ground are actually been implemented.
Others who supported the debate were: Hon Peter Mathuki who called for efficient transport network and infrastructure systems for the region to facilitate movement of goods and services. He called for means to curb corruption to enable citizens enjoy their rights.
Hon Zein Abubakar called for good governance as a pre-cursor to enhancing investment in the region. Hon Fredric Ngenzebuhoro, Hon Susan Nakawuki, Hon Martin Ngoga, Hon Sarah Talaso and Hon AbuBakr Ogle also rose in support of the report.
Hon Shem Bageine, Minister for EAC, Uganda and standing for the Chair of Council of Ministers remarked that the East African Court of Justice (EACJ) had already taken up its place as the Judicial organ to arbitrate on trade disputes. This follows the extension of the jurisdiction of the Court to include matters of trade and investments. He said that the region was keen to see export trade enhanced and that the Council would keenly study the recommendations of the report with a view to harmonizing the investment codes.
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