Category: Opinion

  • Joint Statement on US-EAC Trade & Investment Partnership

    United States Trade Representative Ron Kirk; the Honorable Richard Sezibera, the Secretary General of the East African Community; Victoire Ndikumana, the Burundian Minister of Commerce, Industry, Posts, and Tourism; Moses Wetang’ula, the Kenyan Minister for Trade; François Kanimba, the Rwandan Minister of Trade and Industry;

    Abdallah Kigoda, the Tanzanian Minister for Industry, Trade, and Marketing; and Amelia Kyambadde, the Ugandan Minister of Trade and Industry are pleased to release the following joint statement, following a meeting on June 14, 2012 on the sidelines of the AGOA Forum between the United States and the East African Community (EAC) Partner States, in Washington, D.C.:

    Recognizing the importance of strengthening the economic links between the United States and East Africa, our governments jointly resolve to pursue a new trade and investment partnership between the United States and the East African Community.

    This new partnership will build on the foundations of our existing trade and investment relationship, including the African Growth and Opportunity Act (AGOA), and the U.S.-EAC Trade and Investment Framework Agreement (TIFA).

    Under this new partnership we will work together to provide new business opportunities to U.S. and EAC firms by reducing trade barriers, improving the business environment, encouraging open investment regimes, and enhancing our two-way trade.

    The initial items we have agreed to explore under this new umbrella partnership include a regional investment treaty, a trade facilitation agreement, continued trade capacity building assistance, and a commercial dialogue.

    These agreements and other activities that we will pursue will help to promote EAC regional integration, economic growth, and expand and diversify U.S.-EAC trade and investment. They could also serve as building blocks towards a more comprehensive trade agreement over the long term.

    We, the Ministers, have therefore directed our respective technical teams led by the EAC to engage as soon as possible to begin consultations on each of the areas we have agreed upon.

    We have full confidence that together, we can build a stronger U.S.-EAC trade and investment partnership for the benefit of the American and East African people.

  • Africa, Middle East to Lead in Low Cost Goods

    Whereas China is still very competitive, rising wages are opening up opportunities for Africa and the Middle East.

    The observation was made by Bassam Hage while commenting on a report released recently by global consultancy Ernst and Young.

    Hage is the Middle East and North Africa Markets Leader at Ernst and Young in Dubai.

    The report notes that Exports from the Middle East and Africa (MEA) are poised to grow up by 12% in the next ten years as the region is on the way to succeed China as a key manufacturing hub for low cost goods.

    “Technological advancements and the process of industrialization in the MEA region will lead to metals, chemicals and other “intermediate” goods becoming an increasingly important part of their exports as they seek to position themselves in the global supply chain,” says the report.

    Hage explains that “With a fast-growing labour force, they have the potential to become the next world assembler, possibly replacing China, as China specializes in higher-value added goods.

    But for this to happen there will need to be an investment in infrastructure and the continued fostering of entrepreneurship.”

    The report was a result of a study that identified 25 Rapid Growth Markets (RGM) which would have the potential to trigger a seismic shift in global trade patterns.

    On specific trade flow forecasts, Hage said that “ Exports to Russia from the region will show significant growth of close to 12% per year from sub-Saharan Africa and 14% from the Middle East and North Africa region.”

    Intra-trade among RGMs is poised to soar. The increase in the middle class in RGMs, particularly in Asia, will drive growth in consumer demand and trade flows between RGMs.

    Ernst and Young took China as a specific example for forecasting, saying that “the number of households in China with a real disposable income of US$30,000 to US$ 50,000 will increase from US$1.6 Million in 2010 to an estimated US$ 26 Million in 2020.

    Also, “Flows of goods from China to India are expected to grow by 22% per year over the next decade.”

    Because of this shift, MEA countries will increasingly focus in their export policy on trade destinations in the East.

    According to Hage, Ernst and Young stated he was optimistic for the MEA region in the medium-term, saying that “in addition to the rise in oil prices benefiting the region, non-oil activity is likely to remain strong especially with the steady labour force growth.

    Government spending and the increase in trade between RGMs, will serve as significant catalysts to growth and, in turn, be hugely beneficial for companies that invest in these markets.

  • Who Should Protect Journalists?

    Journalists are mostly referred to as the 4th arm of government because of their monitoring role in society.

    They are supposed to observe what goes on in the dark and display it; the role is also extended from mere description of issues to conceptualization and analysis of the subject matter so as to help the public and decision makers make the right judgement.

    Instead of being protected, they have been brutalized, tortured and abused by various people in their communities.

    Article 19 of the Universal Declaration of Human Rights (1945) provides everyone with the right to expression;

    “Everyone has a right to freedom of opinion and expression; this right includes freedom to hold opinions without interference, and to seek, receive, and impart information and ideas through any media and regardless of frontiers.”

    This task is usually championed by journalists and other activists. It helps the public demand for the fulfillment of the governments or authorities promises; truth and justice; and also for their social- economic and political rights.

    It facilitates citizen’s demand to accountability and transparence- the core pillars of good governance.

    For any growth of a community, the media has to be granted its full right without any obstruction. Contingents like media laws that infringe on freedom of expression and access to information should be scraped from our system.

    Everyone has a right to know about his/ her country’s governance. This gives the population the popular constitutional right of supremacy- “Power Belongs to the People”, even when they can’t exercise it!

    Most developed countries have realized the role of media in development, therefore provide favorable atmosphere for it to operate well.

    If you analyse the countries that are on top in suppression of this right, their investment levels are still rated at the bottom of the world records, and the majority of these are in the sub- Sahara countries.

    Uganda has promulgated and put in place a law (Access to Information Act) that helps to promote its citizen’s right to information. But as many African countries, this law is not even known within the Ministry of Information and major departments of Internal Affairs Ministry!

    Some countries can never tolerate critics; they forget that both positive and negative critics can open room for positive change that may lead to growth and development. Critics help governments identify their weaknesses and fill the gaps.

    In Uganda, activists are prosecuted on fabricated treason and rape charges; others are being labeled psychologically or mentally disturbed and dumped in Butabika Hospital among the mad. This in addition to the “prescribed treatments” results to mental misnomer.

    For D R Congo, the bandits or unpaid military can be used to deal with you. Chui was killed 2007 for blocking the release of unsafe consumable products into the market. To me, he is a hero who died saving and protecting the life of many Congolese people.

    Reports have also indicated recent incidents of torture and brutalization on Journalists in Rwanda and Somalia by the authorities that should have protected them! All these are just to cover the dirt hidden in some official or personnel’s deeds.

    To quote Delai Lama, “Our prime purpose in this world is to help others. And if you can’t help them, at least don’t hurt them”. We have continued to have different people of different minds and beliefs; some of them have evil hearts, and others great faith and humanity.

    Protection and promotion of the poor and vulnerable is our core responsibility in this world.

    Adequate measures to minimize these abuse, neglects and violations should be put in place and enforced by all states, international and regional bodies. Activists should be supported and encouraged to foster the cause for peace and stability as well as human rights growth in our communities.

    Issues that affect the wellbeing and development of the population like global warming, maternal and public health, education, safety and good governance should be encouraged in the media.

  • Traffic Police Should Promote Passenger Rights

    The culture of silence and lack of knowledge about passenger rights coupled with lenient traffic police, over speeding and driving under the influence of alcohol continue to cause more road accidents and eventual loss of lives.

    Coaster buses of major transport companies plying upcountry routes have in the recent past adopted supersonic speeds just trying to prove the strength of the six cylinder engines.

    Whenever you try to demand the cutting down of such high speed, you are immediately rebuked by the driver and some passengers who only think of reaching their final destination in the shortest time possible irrespective of the fatal consequences that could arise.

    Very few drivers exhibit proper discipline and respect for order. Drivers threaten to refund money to passengers whom they find insisting on proper driving discipline.

    There is always minimal intervention from other passengers who prefer to remain silent because of the general feeling that they don’t own the car and the general feeling that it’s a favour to be driven in such a car.

    Traffic police has on many occasions stopped such over speeding cars but prefer to walk away to a distance with such drivers and eventually the driver returns to the car and over speeds again.

    This to many rightful thinking passengers is a signal that there is something wrong and or suspicious about traffic police.

    Driving under the influence of alcohol remains unchecked especially on weekends and night time. Traffic police should deploy on the roads during weekends like its done other working days.

    The traffic Police should not only stop drivers because of over speeding or overloading but should regularly ask passenger vehicles to pullover and sensitize passengers on their rights. Only 2minutes are enough to deliver such messages.

    Age should be pertinent in determining a bus driver. The lack of psychological relation of youthful driver to senior citizen as a passenger makes it impossible for such young drivers to exhibit road discipline and respect for lives of passengers.

    Because most drivers are young they have become crafty on the steering wheel. They have developed signs to communicate presence or absence of traffic police ahead and thus making it easy to drive according to information provided—in most cases over speed when there is no traffic police ahead.

    Passengers in most cases cannot easily notice the speed of the car but non passengers outside can easily notice how fast the car is zooming. It should thus be a combined effort by both passengers and other road users to report an over speeding car or any reckless driver.

    Although Police keeps calling upon passengers and the public to report any traffic violation by drivers and motorcyclists, the largest challenge is for the traffic police.

    They should deploy a mobile traffic unit on every road. Probably they should also deploy plain cloth police in all passenger cars to directly deal with undisciplined drivers.

    The Police week should also conduct such sensitization on passenger rights, and road discipline and encourage all road users to play a key role in reporting any road user malpractices.

  • Rwanda Recognised at African Business Awards

    Rwanda’s sustained improvement in investment climate has been recognised during the African Business Awards at Grosvenor House in London, the United Kingdom.

    Faustin Mbundu the Chairman of the Private Sector Federation (PSF) received the award on behalf of Rwanda.

    The short time of six hours– it takes to register a business in Rwanda including several reforms that have emerged over time making a considerable impact on doing business.

    Local print daily quoted John Gara the CEO of Rwanda Development Board (RDB) saying, “We don’t just talk but we walk the talk and RDB will continue to strive for the best investment climate in our country.”

  • Getting Ready for ‘Kwita Izina’

    “Kwita Izina” from is derived from its original concept and definition in the Rwandan culture–a respected child naming ceremony.

    Traditionally the child’s name was given by the father, clan members, friends and well wishers. Names were carefully chosen in order to avoid any kind of discomfort for the child when grown up and they had to have a meaning.

    From that ceremony rose a big event also called “kwita izina”. This one is not about naming children but baby mountain gorillas.

    In one of the most beautiful, magnificent and majestic places in Rwanda, in the Virunga Mountains situated in the Northern Province of the country where six Volcanoes form a chain is a mountain forest, home to the Mountain Gorillas.

    They used to be in danger, they were killed, their territory was invaded and as time passed by they reduced in number.

    In 1925, a measure was taken by creating the Volcanoes National Park which was the first national park to be created in Africa. Its creation was majorly to avoid or even stop poaching and other kinds of invasions.

    Today, mountain gorillas live freely and have multiplied thanks to national conservation efforts, local population and also the support from the international community.

    Through the years, Rwanda has been working tirelessly promoting conservation of gorillas as well as keeping the ecosystem that provide life and support to both humans and gorillas.

    Kwita Izina event has been existent for 8 years now and happens annually. It is a big event because local big personalities are present, international personalities are also invited to attend.

    The names given to baby Gorillas are from the big personalities present on that day. Some names are given according to the gorilla’s behavior or character.

    The gorillas live in groups and in different parts of the mountain, this is to let them feel free to use their territory as they wish, to live in families and clans and also for the conservation authorities to easily control and take care of them.

    Mountain Gorillas are not very numerous worldwide and they are very wonderful creatures genetically close to humans at 98% of DNA smillarity.

    Celebrating their existence and caring for them by naming them is the least thing we can do.

  • Kenya Adopts Online Business Registration

    Kenya has announced that in the next three months, it will be possible to register businesses online.

    The Finance minister Njeru Githae told Kenya’s Parliament that the country is set to roll out the electronic registration of businesses within the next three months.

    Rwanda is currently the only country in the East African region where online registration of businesses is fully embraced—it only takes six hours to register a business in Rwanda.

    The e-registration in Kenya will ensure that investors have an easy time setting up businesses in the country.

    He added that a Bill –Business Regulation Bill– to simplify the process was in the works and will make it to Parliament as soon as possible to make that dream a reality.

    Julius Kones (Konoin) had noted the long processes and multiple licenses required to set up and operate business in the country, saying they had made Kenya less attractive for foreign and even local entrepreneurs.

    “Why does the government require a Bill to set up an e-registry when you already have a government policy on e-governance?” posed the Konoin MP.

    Dr. Kones said that the 2011-2012 Doing Business Report that was prepared by the International Finance Corporation and the World Bank had passed an indictment on Kenya as an investment destination.

    Kenya was ranked number 109 in the world. Rwanda is ranked number 1 in the region and 3rd in Africa.

    “What reform measures has the government taken to simplify payment of taxes and regulations for investors and what achievements have been made in improving the business environment to attract new investments in the country?” posed Dr Kones.

    It is then that the Finance minister said that the government was aware that the business regulation environment was haphazard and that the processes too were inordinately long.

  • Africa Shouldn’t Import Food–Okonjo

    Nigeria’s Finance minister Ngozi Okonjo-Iweala recently competed for the post of President of The World Bank but didn’t succeed. She was africas favourite.

    In an Exclusive Interview, Ngozi said I went into this with the support of our leaders. They actually asked me to and they were very steadfast in their decisions. Africa showed unity. All the countries were supporting the same goal for the first time.

    She said African countries should rebuild their fiscal buffers and diversify their economies away from commodities in order to protect themselves from another possible global downturn,

    In this interview with IMF Survey online, she explains how her country has achieved impressive economic performance, and what policies African countries should pursue to achieve solid and inclusive growth.

    QUESTION: Many Africans were very disappointed by the fact that you were not selected as the new president of the World Bank. What are you going to do to try and ensure a greater voice in the selection process the next time around?

    ANSWER: I know there might be a little tinge of disappointment, but actually many people are elated. Yes, Africans would have loved it, but they also recognize that the continent has achieved a great deal.

    I went into this with the support of our leaders. They actually asked me to and they were very steadfast in their decisions. Africa showed unity. All the countries were supporting the same goal for the first time.

    It was amazing. If another similar issue ever comes around, we will have shown that we can do it. We have opened a door.

    The process for selecting the World Bank president can never be the same again. Everybody acknowledges that. Next time around, it is going to be a different, more open process, and maybe another African can go for it.

    Africa is not immune to a downturn in the global economy and, especially not, from a renewed crisis in the euro area.

    What should Africa’s priority be to protect itself from a possible downturn?

    Firstly, I think African countries will need to cushion their economy. After 2008, most countries depleted their buffers. There are many types of policy buffers such as reducing taxes and so on. Countries put them in place in order to make food cheaper or cushion people.

    By phasing out subsidies in good times, the savings generated can be used in a downturn. This is what we did in Nigeria.

    The amount of fiscal space left, for many countries, to take those measures is now limited. We now need to look, with the help of the international institutions, at how we can rebuild fiscal space and rebuild buffers.

    Secondly, I think that African countries also need to look inward. They need to learn how to better mobilize their own domestic savings, be more robust in their approach to tax, and also stimulate the growth of sectors that can diversify their economies to limit their dependency on commodity booms.

    What should countries do to achieve growth that is both inclusive and solid?

    For one, we should look for sectors that create jobs. Very often, natural resource and mining sectors do not create a lot of jobs. They tend to be capital intensive. Many of them do not employ too many people. So, one really needs to look at other options. Agriculture is something all African countries can do very well.

    In fact, we really have no business importing any food on the continent. African countries should also trade with each other. These things create jobs. There is also manufacturing.

    China is moving up the value chain. Countries need to look at whether we can take up some of the manufacturing China is letting go of at the low end of the value chain. Ethiopia is currently doing so with shoes.

    Nigeria is looking at it with electronics. Those are the kinds of things that they need to do.

    The IMF has forecasted a healthy eight per cent growth for Nigeria. Why has the country performed so well?

    I think that the country has performed well because we have got several sectors of the economy, which are good sources of growth, quite apart from the oil sector, which is doing relatively well.

    We also have agriculture, which is doing reasonably well. We have got a solid mineral sector with small-scale mining. The telecom sector is booming. Services, retail trade, housing and construction are also doing well. So we have several sectors that are performing relatively well.

    But more fundamentally, we have macroeconomic policies that created a stable environment where growth can occur. Furthermore, we are carrying some structural reforms in the power sector, in the downstream petroleum sector as well as in the ports and transport sector; these reforms are also helping to unleash growth. I think that once they are completed, Nigeria could see growth at much more than eight per cent.

    Are you worried about inflation in this scenario?

    Yes, we are worried. Even though we produce crude oil and export, we do import refined petroleum and we are a big importer of food items. So, we also suffer from imported inflation in oil prices and foods.

    Food price volatility has reoccurred this past year of 2011 and food prices have now reached their peak of 2008. All this, also affect our economy. But, we are fighting it. The central bank is really focusing on this issue.

    At the moment, inflation is down to about 11.9%. We are hoping to keep it either in the low double digits or drop to the high single digits over the next year or so.

    What is Nigeria going to do to reduce its dependence on oil?

    We are not happy with it. We would like to improve our non-oil revenues. We would like to create jobs. As you know, oil is not a sector that creates jobs.

    The big problems faced by Nigeria and many African countries are the issues of job creation and of growth that is not really inclusive. What do I mean by that? You can have growth as we are having, but that growth is not creating as many jobs, especially for youth, and is leaving some people behind.

    That’s not really the kind of growth we want. We want the growth that will create enough jobs for youth, and that will include people in the rural areas as well as in the cities.

    That way the whole country is improving together. We do not want increasing inequality. Youth unemployment, both in Nigeria and on the continent, is a huge problem and we need to tackle it forcefully.

    What policies are you thinking of implementing to tackle this problem?

    We need to diversify the economy itself into sectors such as agriculture, where we have a strong comparative advantage. I think Nigeria should not even be importing most of the food it currently imports.

    We spend about $10 billion a year on food imports of things that we could grow, like rice, fish, sugar, and wheat for bread. Actually we do not grow wheat very well, but we can substitute cassava flour for wheat flour. If we pursue the development of these sectors, then we will create jobs and we will diversify.

    We are investing, and we are also encouraging active investment in agriculture for both small and larger farmers because Nigeria only uses 44% of its arable land. There is also scope to increase our productivity, which is currently about one-third of that in South Asia and East Asia.

    We are also doing some targeted programmes as well. We have an extremely popular programme, which creates jobs by supporting young entrepreneurs. It is a business plan competition and those who win get anything from $10,000 to $100,000 to support their businesses.

    They also receive mentorship, access to credit, and support. Finally, we also have a public works programme targeted towards parts of the country that are falling behind because of the inclusiveness issue. So, there really is a range of instruments we are deploying now.

  • IFC, AfDB Deal to Enable African Local Currency Swap Transactions

    The World Bank’s International Finance Corporation and the African Development Bank have signed a deal to enter into African local currency swap transactions, the lenders said.

    This deal will give a boost to Africa’s domestic capital markets and enable the lenders to make loans to their clients in more local currencies than they do now.

    The agreement was signed at the AfDB’s annual meeting in Arusha, Tanzania, and is part of efforts by the two institutions to cut countries’ dependence on foreign currency denominated debt.

    Improving Africa’s capital markets is vital if the continent is to maximise its growth potential.

    Under the deal, the IFC could obtain local currency in a country where it doesn’t have a funding source or an upcoming bond issue but where the AfDB does.

    “The agreement opens up the possibility for both institutions to share our local currency resources,” IFC treasurer Jingdong Hua told Reuters in a phone interview from Arusha.

    “Let’s say AfDB is issuing in a currency where we haven’t started a capital market exploration but we happen to have a programme, we can borrow from the AfDB and on-lend to our clients and vice versa.”

    Hua said the deal had no fixed size and the transactions would depend on project demand. It is the first such deal between two multilateral financial institutions and has no time limit.

    IFC, the World Bank’s private sector arm, said it expects to invest $2.6 billion in sub-Saharan Africa this fiscal year and to mobilise an additional $1.1 billion from other investors.

    The agreement follows the launch of its pan-African bond issuance programme in May. IFC is working with authorities in Botswana, Ghana, Kenya, South Africa, Uganda and Zambia to obtain consent to issue regular local currency bonds.

    Funds raised from the bond sales will be invested in IFC-backed businesses that contribute to social objectives such as job creation and infrastructure development, Hua said.

    Foreign investors who buy the bonds would gain exposure to African local currency debt from triple-A rated issuers.

    Since 2005, the AfDB has issued bonds denominated in or linked to seven African currencies. It is also a regular issuer in South African rand, its third largest lending currency.

    IFC said it wants to strengthen its presence in Ethiopia and in post-conflict or fragile states such as South Sudan, Thierry Tanoh, vice president for sub-Saharan Africa,.

  • Get a Piece of Kigali

    Termed by some as overly ambitious, the Kigali City Master Plan (KMP) continues to forge ahead in its quest to successfully develop sustainable approaches to urbanization.

    Kigali authorities believe its city master plan is an articulated vision for the city’s future and are currently inviting investors to be part of this dynamic journey.

    The Rwanda Social Security Board in partnership with the Rwanda Development Board, the Ministry of Infrastructure and the Kigali City Council are now unveiling for sale, 9 prime property plots, located in the Rwandan capital, Kigali.

    Known as the Rugenge Plots, this property is part of Phase 1 of Kigali’s Central Business District (CBD1).

    The new Kigali CBD Core is a signature of the latest development in Kigali and expected to be the future financial hub of Rwanda and the region, with national and international financial institution headquarters.

    Kigali city features over 730 square kilometres of hills and valleys, and is rapidly opening up itself as a premier destination for real estate investment.

    The Rugenge Plots were initially 20, of which 11 have been sold and three have been fully developed with high-rise mixed use for commercial and apartment buildings.

    Developed sites include the Rwanda Social Security Board building, which consists of a impressive 14 story commercial and residential building; the RSSB commercial high rise with approximately 13,000 sq m, and the Habeli Building, a retail and office structure of seven stories.

    Infrastructure to be made available at the Rugenge Plots will consist of water and electricity services, sewage treatment as well as communication systems through the use of fibre optic cables.

    With regard to specifications, Permissible Land Use includes commercial use on the first floors or first two floors and residential use above the first floor. Conditional Land Use includes public facilities; hotels; service apartments and Petrol stations.

    Currently, Kigali measures 731 square kilometres with a population of about 1.3 million and a household size of 4.8 million. It is believed that the city population will more than double to 2.9 million by 2025 and most likely five million in long term.

    About 17 % of the city is currently urban land, while 50 percent is used for agriculture while the rest is preserved for nature.

    According to the RSSB Director General Angelique Kantengwa, the sale of the Rugenge Plots in the CBD1 are “also targeting local investors who can group themselves to buy these plots. With the condominium law, an individual can own part of a building”