Now that Rwanda and Burundi have been admitted into the East Africa Community’s Common Market, investors will have an easier time doing business in the region, says Dr. Maggie Kigozi.
“The expansion of the EAC is the best thing that has happened to us,” said Kigozi, Uganda Investment Authority executive director, in an interview with The New Times.
“We can now even attract large projects because the market is bigger at 120 million (people). With the common market, East African traders will have a borderless regional trading system by 2010 to allow for free flow of goods, services and investments.”
Rwanda and Burundi signed onto the EAC last June and negotiations for the common market began in April this year.
Meetings took place in Kigali with the aim of easing trade flow between Kenya, Uganda, Tanzania, Rwanda and Burundi. The Common Market is expected to be launched in 2010 when the negotiations end, expected this December.
Currently, goods between Uganda and Rwanda are freely traded. As a result, trade between the two countries has been growing.
Ugandan exports to Rwanda more than doubled from $30.5-million (Frw16.4-billion) in 2006 to $83.3-million (Frw45-billion) in 2007, according to the Uganda Export Promotion Board.
“Doing business is now easier because as a region we are working towards removing trade barriers between countries. The different revenue authorities in the region are more efficient. We already have a regional harmonized tax base,” said Kigozi.
She noted some challenges to trade, however, such as poor infrastructure in the region and the existence of non-tariff barriers as noted by President Paul Kagame recently at the first East African Investment Conference held at the Serena Hotel in Kigali from June 26-28, as major obstacles to doing business in the region.
“These obstacles increase the cost of doing business and reduce chances of attracting foreign investment in the region,” Kigozi said, adding, however that the challenges will be worked out in time.
Kigozi praised the investment conference, which brought more than 1,000 business leaders from within the East African Community and from outside the region together, as a success. It will become an annual event to take place on a rotating basis among the member states.
“Now that we are marketing EAC as a regional bloc, it’s easier for investors to choose where they want to invest because we all have a comparative advantage,” Kigozi said, pointing out that Kenya has a superior regional manufacturing base, Rwanda has a thriving tourism sector and Uganda has a strong service sector.
According to the Rwandan Ministry of Trade and Industry website, tourism brought in $42.3-million (Frw22.8-billion) last year, second to the mining sector and more than coffee or tea.