Manufacturers call for government-led industrialization as Kigali summit ends
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There is need for partnerships that are government led to take on large scale industrialization projects as a way of boosting the region’s manufacturing sector.
This is one of the resolutions from the second East African Manufacturing Business Summit that ended in Kigali on Thursday.
Reading the 12 resolutions adopted at the end of the three-day meeting, the EAC Director for Productive Sectors, Jean-Baptiste Havugimana noted that both the public and private sectors are key to driving industrialisation in the region but there is a need for partnerships that are government led.
“The EAC is to develop regional policy frameworks for government led industrialisation mega projects that can drive up manufacturing in the region. EAC Partner States are to commit to a percentage of national budgets allocated for industrial development,” said Havugimana.
Closing the summit, Dr. Ali Kirunda Kivejinja, Uganda’s second deputy Prime Minister and Minister for EAC Affairs, who is also Chairperson of the EAC Council of Ministers, committed to table the 12 resolutions before the Council and ensure they are realized.
Kivejinja said: “We need to walk the talk to project the East African Community in a higher trajectory of growth and development.”
The Summit took note of the fact that deployment of appropriate skills to suit industry remains a challenge of enhanced productivity in industry and it was resolved that partner states have to develop national policies and laws making industrial internship mandatory, especially for engineers, technologists and scientists.
In this regard, Partner States’ academia are required to work closely with private sector associations to formulate regional skills development programmes targeting specific skills required by the private sector schools, TVET and university curriculum.
Common External Tariff review
Noting that the current regional Common External Tariff (CET) structure does not work effectively for manufacturing in the region, the summit also resolved that EAC in partnership with East African Business Council (EABC) detail in a comprehensive, evidence-based, and consolidated way priority for the CET review proposing four to five bands as appropriate.
The summit also resolved that the bloc and the EABC put in place a framework for engaging the diaspora to enable manufacturers tap into diaspora funds in the region.
Vincent Ssennyonjo, a senior lecturer at Ndejje University in Uganda, told The New Times that: “The investment vehicle resolution is quite good and I think it can not only attract investment money from east Africa but also from the diaspora. Big investors interested in joint venture capital can come and help our small companies grow.
“What we need to do is convince our capital markets to work with stock exchanges and we set up an investment desk within the securities exchange whereby appropriate safeguards and guarantees are made to convince investors to bring their money.”
Ssennyonjo who is a finance expert said the region needs fund managers who are not interested in mega investments alone but also in small investments which most east Africans can afford. According to him, the latter will manage the money in an investment scheme which guarantees relatively medium returns but at least with great mitigation for risks.
The summit further observed that regional national policies or regulations are pursued as opposed to having single or common policies segmenting and fragmenting the market which limits the scope for economies of scale and escalates the cost of doing business.
The region is thus required to develop and adopt common sectoral policy and visions to ensure stability in addition creating a uniform business environment for manufacturing.
It was observed that special economic zones generate additional economic activity leading to promotion of exports of goods; promotion of investment from domestic and foreign sources; and development of infrastructure facilities; to attract large investments.
In this regard, the EAC and EABC were urged to develop cross country coordination and collaboration platforms for efficient competitive value chains (platforms) and to undertake learning missions to enable design of effective Special Economic Zones.
The development of such infrastructure is to also take into account development of facilities for small and medium enterprises.
François Kanimba, the Minister of Trade, Industry and EAC Affairs, noted that during the panel discussions he was excited when seeing “the frankness and excitement by young east Africans who were angrily expressing their sorrow about what is going wrong.”
“This, I think gives a lot of hope that change is possible. By sustaining this summit in that spirit I have no doubt that in a very short period of time we can shape the road map for the region change,” Kanimba said.
Emile Nsanzabaganwa, general manager of Kinazi Cassava Plant, told The New Times that he was impressed by the summit’s diversity of participants.
“Basing on experience from our colleagues from Kenya, it is inviting us to do more. Contribution of our diaspora has potential of being bigger specially regarding made in Rwanda products,” Nsanzabaganwa said.
Nsanzabaganwa said the summit was a good occasion for interacting and that apart from the potential of growing their distribution network, “it is one way of advertising our product.”
According to Dr. Samuel Nyantahe, chairperson of the confederation of Tanzania industries, it will be important that partner states and the Secretariat now implement the resolutions.