REMARKS BY
Amb.
Liberat Mfumukeko, the
Secretary General of the East African Community Secretariat
AT THE 2ND EAST AFRICAN BUSINESS AND
ENTREPRENEURSHIP CONFERENCE & EXHIBITION
Theme: Accelerating
Industrialization, Innovation and Investment in the EAC
SERENA HOTEL, DAR ES
SALAAM, TANZANIA
14th 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 2nd 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 2nd East African Business and
Entrepreneurship Conference & Exhibition fruitful deliberations.
Thank you and
God Bless East Africa!
EAC Secretariat
Arusha, Tanzania
14th November
2017
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