Dubai talks can give EAC fruitful results

Until the East African Community signed the Economic Partnership Agreement (EPA) with the European Union last week, Kenya’s fresh produce exporters were sweating buckets.

In very simple terms, an EPA is a reciprocal arrangement that neither country or economic bloc will impose taxes on the imports of the other.

The EU is Kenya’s leading market for fresh flowers and other horticultural produce, with annual sales topping a billion US dollars. The same can be said for other East African countries, although their production and obviously cash returns are far smaller.

Without an EPA in place, Kenyan exporters would have had to face import duties, meaning more expensive flowers for their European buyers and lesser sales for Kenyan growers.

The reason why there was so much soul-searching over signing the EPA, was that regional enterprises felt thay could not compete with their European counterparts in a vast range of goods. Secondly, the EU is the EAC’s top market. This is not very comforting and reminds EAC leaders the need to help find other markets.

This week Dubai will be hosting the Second African Global Business Forum. Under the patronage of H.H. Sheikh Mohammed bin Rashid Al Maktoum, the Dubai Chamber of Commerce and Industry is organising these talks together with The Economist.

It is a by invitation only event, reflecting the gravity that the hosts have placed in it. Under these circumstances, so should the EAC, if the search for new markets is going to bear some fruits. Admittedly, talkin shops are plenty, the Gulf region is gaining an economic clout that far outweighs its geographic area.

The objective of the Forum is to encourage international revenue flows into Africa by engaging leading decision-makers on the global investment scene. Other expected participants include prominent CEOs operating globally, heads of private banks, sovereign wealth funds and private equity firms.

The format will consist of pre-scheduled one-to-one and small group business meetings over the two days of the forum that allow attendees to network and discuss future investment opportunities in Africa.

Anticipated cash gains from the oil and gas discoveries may have side-tracked the minds of several African leaders, but the truth of the matter remains, the only sector that can absorb the most workers and make a wider impact on rural incomes, is agriculture. Or to be precise agri-business. We have the space and great weather to grow all kinds of things. It is the money to investment in commercial farming that is lacking.

Dubai is part of the United Arab Emirates (UAE). The UAE imports most of its food. Not long ago, UAE passed Saudi Arabia as the largest consumer market in the region. In 2013 UAE imported fresh fruit worth $91 million from the United States alone. They also bought $200 million of hay from the Americans. If you wondering about the hay, horses are a deep passion in these lands.

By all accounts, sub-Saharan Africa should be the dominant force in fruits exports, but we are not--why? Some serious thought should be given to this paradox, especially since our fruits are pretty tasty. A country like Uganda, (that ranks among the top five in banana production), does not even have toe in the lucrative EU banana market dominated by the Carribean nations.

These days amid concerns about a bulging population of foreign workers, who keep the UAE going, the issue of food security is rapidly climbing up the UAE national agenda. In such situations, joint ventures make good sense. The UAE has already invested in Namibian farmland which is even further than East Africa. It makes good business sense to talk with a country that generates nearly $400 billion every year.

By EABW Editor, Sunday, September 28th, 2014


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