REMARKS BY Amb. Liberat Mfumukeko, the Secretary General of the East African Community Secretariat

 REMARKS BY

Amb. Liberat Mfumukeko, the Secretary General of the East African Community Secretariat

AT THE 2^ND EAST AFRICAN BUSINESS AND ENTREPRENEURSHIP CONFERENCE & EXHIBITION

Theme: Accelerating Industrialization, Innovation and Investment in the EAC

SERENA HOTEL, DAR ES SALAAM, TANZANIA

14^th November 2017

  ·        Her  Excellency   Hon. Samia Suluhu Hassan Vice President of the United Republic of Tanzania;

·  Amb. Dr. Augustine Mahiga, Minister of Foreign Affairs,  East African, Regional and International Cooperation, United Republic of Tanzania;

·        Mr. Jim Kabeho, Chairman of the East African Business Council;

·        Mr. Reginald Mengi, Chairman of Tanzania Private Sector Foundation

·        Honorable Cabinet Ministers Present;

·        Honorable Permanent and Principal Secretaries Present;

·        Your Excellencies Ambassadors Present;

·        The Private Sector;

·        Distinguished Delegates;

·        Ladies and Gentlemen.

Allow me to begin by expressing my sincere appreciation and gratitude to His Excellency Dr. John Pombe Joseph  Magufuli, President of the United Republic of Tanzania, for setting aside t time from his busy schedule to attend this Conference. I also thank His Excellency for the warm reception and gracious hospitality accorded to me and other delegates coming outside Tanzania since our arrival in this beautiful city of Dar es Salaam. This is typical of His Excellency and the people of this Country.

In the same vein, I wish to thank Mr. Jim Kabeho, the new Chairman of East African Business Council for the excellent arrangements for this event. I could not hope for anything more apt and transformational than the path that has been taken in this event through partnership between the public and private sector to promote enterpreneurship and in the broader sense industrialization, which has for a long time taken a back seat in the region. I agree with the former EAC Secretary General, Amb. Juma Mwapachu who posted that there is a common lament that the African private sector is still nascent with some critics even contending that Africa lacks a truly indigenous private sector; that it is inadequately recognised, appreciated and empowered and is thus incapable of taking the lead in the industrialisation process.

I recognize and trully appreciate the policy makers and the private sector; members of the international community, ambassadors; members of civil society; academia and students who have joined us today to deliberate on this critically important subject matter for our region and our respective Partner States.

Your Execellency

The region can no longer remain passive in the quest for industrialization. In religious text we find the phrase, 'That which is neither hot nor cold will I spew out of my mouth.' This utterance has kept its profound validity until the present day. The writer Jim Collins notes that he who would pursue good must surrender the hope of achieving the great and the greatest aims. As a region we must therefore pursue the objective of being great in this sector. I believe the views, thoughts and insights generated here today will inform policy and decision makers as well as private stakeholders on the steps to take going forward to accelarate industrilization, innovation, and investment in the EAC region.

Your Execellency

It is now 18 years since we re-established  the East African Community after its collapse in 1977.  Today our region has a population of more than 165 million people (including the new Partner State, the Republic of South Sudan). The GDP per capita of the Community estimated to be US$ 919 (2016) is expected to grow to more than US$ 1000 thus ushering the Commnity into a Middle Income Region by 2020.

East Africa Region is a community with great future having vast potential in agriculture, tourism, minerals, water, energy, forestry, industry, livestock, and wildlife resources. It also has a rapidly increasing educated population, and a growing middle class which  points to immense businses potential in the region.

Your Execellency

Ladies and Gentlemen

We have made tremendous progress in creating a Community that is ready to do business. Our integration efforts have borne fruits. For instance since establishing the EAC Customs Union in 2005, EAC Partner States have worked to harness their joint economic potential by eliminating barriers to intra-EAC trade and investment with aim of enhancing intra-EAC trade and investment in the region. The implementation of the EAC Common Market Protocol since 2010 has boosted free movement of persons, goods, services and investment across the Partner States. These efforts have led to improvement of intra-EAC trade performance and between 2006 and 2013 whereby total Intra-EAC trade increased from US$1.55 billion to US$4.85 billion during this period. Intra Community Exports increased from US$1.23 billion to US$3.41 billion while imports increased from US$ 0.32 billion to US$1.44 billion over the same period.

We have now embarked on a journey of consolidating Customs procedures in order to create a Single Custom Territory where goods will be subjected to only a single inspection at the first point of entry as it happens in the European Union. This effort is expected to greatly reduce time and cost for the businesses engaged in imports/exports and ensure sustained availability of low cost inputs to manufacturers and Small and Medium Enterprises (SMEs).

Your Execellency

As you may be aware the economy of East African Community is still dominated by Small and Medium Enterprises, which accounts for over 25 percent of GDP and more than 90 percent of registered firms. The sector is also important for employment creation accounting for more than 60 percent of formal employment. Given their prominent role in EAC Partner States’ economies, SMEs are particularly important for the achievement of the development objectives of the Community. EAC prioritized the need for facilitation and the development of small and medium scale industries including sub-contracting and other relations between larger and smaller firms, as a strategy to achieve  the EAC industrial development goals.

The importance of the SMEs sector in the transformation of EAC economies has also been well articulated in the East African Industrialization Policy for the period 2012-2032 and in the EAC Development strategy for the period 2012-2016.

Ladies and gentlemen,

In order for the SMEs in the EAC region to perform their transformative role as anticipated in the EAC industrialization policy, the challenges constraining their growth potential, productivity, and effective participation in the economy both at the national and regional levels need to be addressed. The supply side challenges affecting SMEs include: financial access challenges such as high interest rates; multiple procedures and collateralization requirements, and lack of appropriate financial products for start-ups and for those SMEs in the growth phase. Similarly, the demand side challenges include: poor record keeping, informality, inadequate business plans and know-how, limitations of business management skills for planning and cash flow management, and poor of market information on business partnership opportunities.

Your Execellency

As a Community, we are working round the clock to address these challenges and create a better environment for SMEs development. We have planned to put in place a SMEs Development Charter which will provide a code of practice for EAC Partner States to promote SMEs business and to reduce un-necessary regulations. We are cognizant that further improvements in the SMEs situation will require changes in businesses model, focus on productivity, injection of new technologies and best practices, and investment in product diversification, as well as strengthening business collaboration to facilitate access to market and new business ideas. 

I am very confident that through dialogue in such high-level meetings involving key stakeholders such as BDI and GIZ, we can devise a clear roadmap on joint collaboration aimed at supporting growth and overall development of SMEs. I wish to reiterate that EAC is open for business and we are committed to facilitating business engagement with anyone.  I wish to take this opportunity to personally extend invitation to you all to visit EAC region and explore business collaboration opportunities.

Ladies and Gentlemen

This 2^nd East African Business & Entrepreneurship Conference & Exhibition therefore creates a relevant regional platform for building partnerships for growth of cross-border businesses and also facilitating advocacy on the need to improve business environment for a competitive manufacturing sector. The forum stands to offer an important platform for governments in the region to engage the private sector on critical steps needed to promote entrepreneurship and grow of businesses in our region. The expected outcome is a significant impact on broader socio-economic development objectives such as employment creation, technology transfer and wealth creation.  

Your Execellency

Let me emphasize that regional integration is desirable and we cannot walk away from it. It is true even today as our Founding Fathers realized it when they established the EAC, that individually our countries are small and weak but collectively we can become a bigger market and a stronger entity.

In essence, what we have been doing has been more on the regional cooperation side than on integration. We have now to take on the path of regional integration in earnest. It is not easy because there will be sacrifices to be made, some of which will even affect our sovereignty. But we have no choice but to make the sacrifice, for ultimately, the benefits are bigger. That is why even the stronger and developed economies are busy pursuing integration arrangements.

Your Execellency

With these few remarks, I thank you for your kind attention and wish the 2^nd East African Business and Entrepreneurship Conference & Exhibition fruitful deliberations.

Thank you and God Bless East Africa!

EAC Secretariat

Arusha, Tanzania

14^th November 2017

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