EAST AFRICAN COMMUNITY (EAC) region should develop a regional local content policy and strategy for better coordination of local content initiatives, the just-concluded second East African Manufacturing Business Summit in Kigali resolved.
While reading the three-day summit’s resolutions, Jean Baptiste Havugimana, the East African Community Director for Productive Sectors, said that the bloc should develop supply capacity to be able to participate in supply of materials for infrastructural projects and other mega projects.
“To guide this development, the EAC is to undertake baseline studies on local content in all lead economic sectors to guide review of policies, legal and regulatory frameworks for a regional local content policy development,” Havugimana said.
The East African Business Council (EABC), the apex body of business associations of the private sector and corporates from Community, has been pushing for a regional local content policy.
Local content requirements (LCRs) are policy measures that typically require a certain percentage of intermediate goods or raw materials used in the production processes to be sourced from within a country, or region.
To implement such policy measures there is need for a two-pronged goal of achieving a robust manufacturing industry, in addition to securing associated local job creation, other than allowing multinational corporations which execute multi-million-dollar projects in the region to import materials and services that are available locally thereby denying locals their share of economic benefits, officials said.
According to Lilian Awinja, the EABC executive director, it is high time the bloc formulates its local content policy with the aim of boosting the region’s value-addition.
A regional local content policy, she said, will require firms to use at least a specified minimum amount of local content such as labour, goods and services from the east African countries in their production processes.
Such a policy will guide east African countries in mainstreaming local sourcing of goods and services at national level and in the promotion of consumption of local goods and services, she added.
Rapid growth of small and medium enterprises
Awinja said a regional local content policy will create an indigenous production platform focused on domestic value-addition and promotion of local industries; and strengthen linkages between large industries and small and medium enterprises and the services sector.