Business leaders want more vigour

JOBS: Shah, who is also the CEO at vegetable oil processor giant Bidco, said the Community needs to increase its GDP to $100 billion.

ARUSHA, Tanzania - East African Community (EAC) partner states have been asked to improve the business environment in the region, as a key factor for economic growth.

Vimal Shah, the out-going East African Business Council (EABC) Chair repeated the call last week.

The EABC argues that greater achievements of the integration are hampered by the different measures taken by partner states in the form of laws, regulations, policies, conditions and restrictions.

These largely protect the individual countries’ industries, which goes against the provisions laid out for the implementation of the EAC protocols.

“Improving the business environment will lure capital investments from local and foreign investors, which at the end will benefit countries and people through increased revenues and employment opportunities.

“Besides, we are obliged to improve the customs and cargo shipment system in our major ports, notably Mombasa and Dar es Salaam, since they are the major inlets and outlets of local and foreign products,” Shah said.

The EABC is the apex body of the private sector and corporate business association in the region.

It focuses on informing public policy reforms aimed at promoting an environment in the region conducive to business formation and growth.

According to the EABC, intra-EAC trade has expanded from $1,617.1 million to $3,800.7 million in 2010, while the growth, informal cross-border trade has been estimated to be as much as 40% of formal trade.

“We have a population of 130 million people in East Africa with a GDP of $90 billion. We need to create more jobs to increase our GDP to more than $100b,” Shah said.

Touching on business cooperation in the region, EABC vice Chairperson Esther Mkwizu said the region’s business volume increased to $4.5 billion in 2011 from $2.5 billion in 2005.

Speaking during the EABC AGM in Arusha, Shah, who is also the Chief Executive Officer at Bidco Oil company in Kenya, said the EABC has continued to advocate for conducive business environment by pursuing the harmonization of domestic taxes to avoid double taxation.

However other points that continue to please EABC include the ratification of EAC agreements by all partner states; the removal of non- tariff barriers (NTBs); the introduction of an EAC single tourist visa; the harmonization of work permits regime; and domestication of the EAC airspace.

The World Bank Doing Business 2013 report highlighted NTBs as one of the key challenges for the EAC region.

It was also highlighted that the region still has inadequate infrastructure which causes bottlenecks, particularly in terms of roads, railways and energy.

Shah said: “The free flow of services needs to be expedited. As private sector, we are becoming impatient. Let us allow free movement of labour, if we get problems along the way we will address them as a region not independently.”

Felix Mosha, a former Chair of the Confederation of Tanzania Industries, who has succeeded Shah said he is looking more at the economic opportunities available in the EAC region as opposed to the challenges facing the business community. He asked partner states to embrace a spirit of patriotism to remove the remaining unfriendly-business impediments.

The EAC Deputy Secretary-General for Political Federation, Charles Njoroge, speaking on the sidelines of the EABC meeting, said without commitments to adhere to the implementation of key integration protocols, it would be difficult to attain both the Customs Union and Common Market before the Monetary Union and Federation.

The 2004 Community Customs Union and the 2009 Common Market protocols, which are already ratified by all the five countries, provide for the free movement of labour and goods within the region to spur trade liberalization and development.

By Elisha Mayallah, Sunday, April 13th, 2014


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