Critical steps towards a competitive East Africa

COMMONWEALTH SPEECH - A slightly edited speech by President Paul Kagame at the Commonwealth Business Forum in Kampala, Uganda, last evening.
President Paul Kagame
President Paul Kagame

Distinguished Ladies and gentlemen:
I start by congratulating you, your Excellency President Museveni, the government and people of Uganda, for hosting the Commonwealth Heads of Government Meeting, and thank you most sincerely for your gracious hospitality.

The Commonwealth Business Forum together with your sponsors, deserve applause for putting together an impressive program that brings together business and government leaders, to explore ways of making East Africa competitive in the commonwealth and global contexts.

Discussions like this rightly remind us of our respective roles.
It cannot be stated enough that businesses create wealth, while governments provide a supportive environment.

This partnership is what will permit us to achieve our vision for Africa – a continent finally free from poverty and aid dependency. This is also our vision in and for Rwanda.  We want to become home to entrepreneurs who transform agricultural produce into commercially viable goods; who develop tourism into dynamic clusters that generate wealth; who utilise ICT to create export-oriented service industries – where ample energy and modern infrastructure become permanent features of our landscape.

But we cannot succeed in Rwanda in isolation from the sub-region and our continent.
We therefore also envision a socially, economically and culturally vibrant Africa, characterised by thriving industries and populations actively engaged in global business.
Earlier today, President Museveni illustrated how countries have gone to great lengths, to create aggregate demand among ordinary citizens, in a bid to get them actively engaged in economic activity. We see a continent powered by knowledge, innovation, productivity, and competitiveness, with science and technology as the driving force.

Within this flourishing continental setting, we envisage the East African Community as a region of diversity, but with common purpose and values, focussed on pursuing prosperity and effective governance that address the needs of our citizens. We see a region with rich biodiversity that contributes to creation of wealth without undermining our environmental integrity.

Our region should also become a centre for vibrant cultural industries where our artists earn a larger share of the global multi-billion dollar entertainment business. That is our vision for Rwanda, East Africa, and Africa – and it is an achievable one. East Africa is already home to outstanding companies, many of whom are represented here tonight.
We are also a community of governments that have achieved greater policy clarity and continue to reform for even better results.

East Africans are, furthermore, an industrious and resilient people. We have all the necessary ingredients for a socio-economic success story. To achieve this, we must, however, first believe in ourselves – that we are a capable people who can transform our institutions into effective agencies that conceive and execute policy, with resolve. We must also find talented people to work in government, in the private sector as well as in civil society, and strive to retain them on the basis of how they perform.

Financial incentives are only part of this equation – people also want to be appreciated for their competence, and encouraged to become part of a positive environment, in which they use their skills to contribute to a better tomorrow. With this as our goal, we can change individual and institutional mindsets by ending the culture of unproductive self-importance.

For example, we need public services where the time to complete business procedures is not measured in months, but days, or even hours. Procedures that take months and the attitudes that propagate this way of working belong to the pre-modern and pre-digital times – not in the Africa we envision. Look at our regional infrastructure for example.
A lorry of commercial goods travelling inland to coastal gateways can take anywhere from five days to two weeks depending on “good luck”.

The reverse travel from the coast to inland markets is equally problematic, not least given the onerous clearances and checks required for imported products. The obstacles to conducting trans-border commercial transactions include legal border crossings – most of them closed at night, ad hoc and illegal checkpoints, impassable sections of the road network, and congested port facilities.

Everyone loses here - the wealth that would otherwise accrue to East Africans fails to materialise. The businesses that we so badly want to grow are undermined and the state is deprived of revenue. We can fix this problem – by recruiting talented, responsible and accountable people to operate vital border crossings and customs posts on 24-hour work shifts.

We must use ICT to make border clearances a rapid one-stop-shop exercise. The noted challenges are part of the reason intra-African trade remains negligible in spite of its importance – and that is why we remain poor. It has been indicated for example that trade among African countries accounts for only ten percent of our total exports and imports – a factor that is due to, among other things, poor regional infrastructure.

Use of more efficient and effective means of commercial transportation by rail, for instance, can easily reverse this.Thankfully, the East African countries with existing railways, namely, Kenya, Tanzania and Uganda are refurbishing their respective rail operations. In the same vein, the proposed modern railway line from Dar Es Salaam to Isaka and then, to Kigali and Bujumbura would revolutionalise transportation for Rwanda and the entire Great Lakes region.

Intra-regional trade as well as improved access to global markets will undoubtedly provide a launching pad for our economic takeoff. The need for professionals to improve public sector and corporate effectiveness remains a challenge for Rwanda, for East Africa and for the continent as a whole.

We lose professionals as soon as we create them, and then resort to borrowing in order to finance expensive international expertise. This reinforces our dependency on aid, because short-term consultants add little to our need for a critical mass of home-grown expertise and talent. But again, we have to accept that we are competing for skills in an increasingly open, global market-place.

We should not begrudge those of our people looking to improve their lives elsewhere – instead, we must offer better prospects in our countries to ensure they stay with us. 
We can work together in East Africa to remedy this situation. Our comparative strengths can help to build more capable public and private sector institutions. Corporate East Africa has a pool of talent that can uplift their private sector counterparts in lesser developed parts of our region.

We in Rwanda are facilitating this by removing work permits and employment restrictions on professionals and others to work in our country. This decision is also in the spirit of the East African common market that will formalise free movement of goods, services and people. Rwanda, East Africa and Africa at large are, in effect, at a cross-road.

We have the ambition and are capable of becoming a prosperous, well-governed and forward looking region belonging to an equally flourishing continent. We are operating in a context of an innovative and powerful global market place that is open for business – but mainly for the highly productive and competitive.

We are also confronted with the assertive emergence of China and India, two economic giants that are sparking even greater competition for Africa’s raw material resources and trade. The socioeconomic prospects presented by these developments are enormous.
However, we will only gain from these fresh opportunities if we respond in the right ways – not least by integrating East Africa into a dynamic market of active producers and consumers.

Becoming active producers requires that we abandon the mindset that Africa is pre-ordained to remain an exporter of raw materials and an importer of products to which value has been added by others. Reversing this order is critical and urgent for creating prosperity on our continent.

Do we have what it takes in East Africa?  I believe we do – and that is why we are here tonight, to build on our shared ambition and capabilities for success, and to work together to confidently shape the future we all want and deserve. Together, private sector, government and civil society can make this happen.

I thank you for your kind attention

 

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