African leaders pledge investment climate in region

East African Community (EAC) Heads of State and Government on Tuesday assured members of the business community that their investments in the region are safe and secure.


The EAC leaders further said that they were working to create a conducive environment for investment especially by promoting political stability and upgrading infrastructure.


The leaders, who included Presidents Jakaya Kikwete (Tanzania), Pierre Nkurunziza (Burundi), Mwai Kibaki (Kenya) and Rwandese Prime Minister Bernard Makuza, further said the region was also marketing itself as a single trade, tourism and investment destination. "The leaders said the EAC Partner States were also investing heavily in building their human resource capacities and increasing access to finances to local investors," the leaders said according to a statement issued in Nairobi by the EAC ministry.


The leaders were speaking during an interactive session with investors and business stakeholders during the 9th African Investment Forum that opened on Monday at the Dar es Salaam's Milimani City Complex. President Kikwete said that investors in Tanzania need not worry that their investments may one day be nationalized as happened in the 1960s. "Tanzania experimented with the socialist ujamaa system whereby it nationalized private property. This will not happen again because our national legislation guarantees security of investments. An investor is also at liberty to seek recourse to international jurisdiction in case of an investment dispute," President Kikwete said. President Kikwete said Tanzania was working with the other Partner States by upgrading key rail and road networks in the region in order to create major transport corridors that would facilitate trade. "The Dar es Salaam port has been opened to Burundi, Uganda and Rwanda. Now, you can also drive to right from Dar to Bujumbura and Kigali on tarmac. We are also resurfacing the major highways to Zambia and Sirare on the Kenyan border," Kikwete said. "Construction work is nearing completion on the Arusha-Namanga- Nairobi Highway which will give Kenya access to southern markets," he added. President Kikwete said Rwanda, Burundi and Tanzania had also invested jointly in a railway network to link the three countries. "The feasibility study has been completed and now the engineering design is being done," he said. On small and micro-enterprises (SMEs), President Kikwete said the government had recapitalized the Tanzania Investment Bank (TIB) to the tune of 50 million U. S. dollars starting last year with a similar amount due this year. He said TIB was established in the 1970s to offer loans to entrepreneurs but ran into financial difficulties due to the massive devaluations of the Tanzanian shilling in the 1980s and 1990s. "The money was borrowed on dollar terms and the debtors found it difficult to pay back because of devaluations of the Tanzania shilling," he said. On his part, President Nkurunziza of Burundi said his country was now politically stable. "Peace and security are the foundations for investment. The region needs to have an educated and skilled workforce. You also need to mobilize local investment. However, the main challenge for Burundi now is that 70 per cent of the adult population did not go to school because of the war and civil strife," said President Nkurunziza. Rwandese Prime Minister Bernard Makuza said the country had put in place the Rwanda Development Board which is tasked with the development of infrastructure throughout the country. Makuza said Rwanda was also promoting joint ventures between local and foreign investors, adding that the government was also facilitating private public partnerships to boost investment.


In his remarks, the Director-General of the Commonwealth Business Council, Dr Mohan Kaul, had told the forum that the best way to attract foreign investors was to take care of local investors. "When people want to invest in a country, they will most certainly ask how local businesses are doing," Dr Kaul said. Earlier, participants at the forum told the leaders that SMEs create jobs and attract foreign direct investment. They urged them to put some money in the East African Development Bank to cater for the financial needs of the SMEs. "SMEs will attract foreign investors to come and partner with them. Micro-finance institutions are currently not promoting local investment because their interest rates are too high," a participant informed the leaders. The leaders were also challenged to ensure some of the ministers in their governments adhere to national visions. A participant said that some ministers were the main obstacles rather than facilitators to change.


The EAC leaders responded that what was needed among leaders was mindset change given that the concerned person were almost certainly well educated.
(Source:http://news.xinhuanet.com)