Investment strategists from the East African partner states arrived in Kigali for a two-day meeting that starts today, during which they will compare notes on regional investment policies and strategies to chart a way forward regarding prevalent inconsistencies.
The meeting was called and will be presided over by the communications, trade, and investments committee of the East African Legislative Assembly (EALA), chaired by Uganda’s representative, Fred Mukasa Mbidde.
Mbidde’s committee seeks to understand each of the partner states’ investment codes and strategies and come up with recommendations on the way forward to ease investment and promote private sector as well as industrialisation development.
Observers note that if the East African Community (EAC) is to be marketed to investors as a single trade and investment bloc, it would require the harmonisation of various investment regulations and policies. As things stand, there are disparities that need to be addressed.
And it’s the work of EALA’s committee on trade and investment to compile those discrepancies and recommendations from partners to address them in order to give the regional assembly a clear action plan on harmonising the EAC investment laws.
Rwanda’s Trade and Industry Minister, Francois Kanimba is expected to officiate at the meeting after which the EAC secretariat will present the region’s investment strategy to which partner states’ policies and regulations must kowtow.
In today’s session, the investment authorities of Rwanda, Burundi and Tanzania, will, respectively, present their countries’ national investment policies and strategies while Uganda and Kenya will make submissions before the committee tomorrow.
Call for harmonisation
The presentations from the five countries will inform the secretariat the extent of inconsistencies in the partner states investment code. The symposium is expected to end on Friday with proposed mechanisms on how to harmonise and make the regional investment environment more attractive.
According to the World Bank 2015 special report on Doing Business in the East African Community, in order for the region’s policy makers to improve their economies’ regulatory environment for business, ‘a good place to start is to find out how they compare with the regulatory environment in other economies.’
Within the region, the partners have different standings on each of the World Bank’s indicators measured; for instance, the region’s average score on the ease of doing business was 56.8 per cent which was equivalent to 123rd, in global rankings of 189 economies.
Only Rwanda scored above the regional average with 70.47 per cent and global ranking of 46th in ease of doing business. The gap between Rwanda and her peers is still wide with Tanzania ranked 131, Kenya 136, Uganda 150 and Burundi 150th.
The region is ranked poorly on major investment indicators such as ease of starting a business where it’s ranked 113th globally and 157th on trading across borders.
By comparing notes, it’s hoped that partner states can learn from each other and adopt best regulatory practices that could be replicated by the EAC as regional investment policies.
The conference comes at a time when Rwanda is preparing to introduce a new investment code to replace the 2005 version currently in force. The code had been expected to be in force by end of April but that’s increasingly unlikely.
However, highlights of the new code are expected to be shared by RDB in hopes that some of its edicts can be adopted as part of the harmonised regional investment policies.
The harmonisation of laws within the EAC context has its foundation laid out under the East African Community Treaty signed in 1999.
The integration agenda commenced with a protocol creating the EAC Customs Union (CU) which came into force in January 2005 with the purpose of ultimately achieving deeper regional integration through the establishment of a Common Market, Monetary Union and, finally, a Political Federation.
However, the partners are still struggling to achieve a fully fledged common market with harmonised laws that would allow for the free movement of services, capital investments and labour.