A world of linkage
Tanzania Chamber of
Uganda Allied Chamber of
Commerce, Industry &
Commerce, Industry &
SUMMARY OF PROCEEDINGS
The Public-Private Dialogue to define
a regional framework for investment
incentives for the East African Community
This document has been produced with the financial assistance of the European Union. The views expressed
herein can in no way be taken to reflect the official opinion of the European Union nor that of the ACP
1) The East African Community is deepening and widening cooperation
among its five member states namely Burundi, Kenya, Rwanda, Tanzania
and Uganda. Spurred by the need to expand markets, boost
competitiveness and attract investment, East African economies have
continued to take steps to make it easier for local firms to start up and
operate business, and also to attract Foreign Direct Investment (FDI).
Opportunities are expanding in the East African Community. Since 2005
the EAC Partner States have grown faster on average than the rest of
Sub-Saharan Africa, with annual per capita growth averaging close to four
percent (World Bank 2010). Yet significant differences remain among the
East African economies. It is believed that deeper regional integration
could help achieve economies of scale and allow the East African
Community to compete more efficiently in the global economy.
2) It is further believed that properly implemented; a larger single market
could turn around the systematic underinvestment in the East African
Community and expand its economy.
3) It is against this back drop that the Uganda Allied Chamber of Commerce,
Industry and Agriculture (UACCIA) in collaboration with the Tanzania
Chamber of Commerce, Industry and Agriculture (TCCIA) with the support
of the Business Climate Facility under the Project Management Unit of the
ACP Secretariat in Brussels held a 2-day Public- Private Dialogue (PPD) on
Investment Climate in East Africa on 27th and 28th February, 2012. The
PPD Forum focused on identification of constraints to business and
investment in East Africa.
4) The objective of the forum, inter-alia, was to define a road map to
produce a “Harmonized Investment Incentives Framework for the East
African Common Market”.
5) The Forum attracted about 160 participants from the various Chambers of
Commerce, Government agencies and ministries and private sector in the
6) At the forum, representatives from Member States presented a brief
country situational assessment which stimulated discussion and to
generated recommendations on the way forward.
7) Thus a joint/harmonised investment incentive framework for the region
was conceived. The Forum also adopted a Roadmap for a two year period
- 2013-2015 for improved ranking including linked activities, awareness
campaign, lobbying/communication strategy for partner states etc.
Technical Issues discussed at the Forum included;
Business climate reforms in East Africa;
Investment Incentives currently being administered – per each
Identification of conflict of investment incentives laws and codes vis
a vis the EAC Common External Tariff (CET) & EAC Common
Market/EAC Customs Management Act;
Highlight of the Framework of Investment Incentives being
negotiated by Partner States;
Highlight and proposals on the Road-Map for Harmonizing the
Investment Code in EAC for the next 2 years (2013-2015);
Conclusions and Recommendations.
8) There was a Presentation from an Investment Expert from the Ghana
National Chamber of Commerce and Industries (GNCCI) who shared with
Participants, efforts at harmonizing Investment Incentives among
ECOWAS states. The aim of the presentation was to offer the EAC states
an opportunity to know what is happening elsewhere on the continent and
see if there could be a common ground for collaboration or lessons to
Opening of the workshop
Statement by the Executive Director of Uganda Allied Chamber of
Commerce, Industry and Agriculture- Mr. Bernard Bangirana
1. Addressing participants at the opening of the Forum Mr.Bernard Bangirana
Executive Director of Uganda Allied Chamber of Commerce, Industry and
Agriculture on behalf of UACCIA and on behalf of the Tanzania Allied
Chamber of Commerce, Industry and Agriculture (TCCIA) co-host of the
Forum, welcomed participants to Kampala and particularly to the Forum.
He underscored the importance of Public-Private Dialogue as an
innovative mechanism which could respond to the difficulties faced by EAC
Member States in the area of investments, general development and the
betterment of their citizens. He pointed out that the region abounds with
numerous investment opportunities waiting to be tapped. The investment
opportunities are largely identical and better arrangement is needed to
harness the opportunities.
2. He noted that in public-private dialogue, the private sector would be
called upon to manage facilities and provide services to the public as it is
happening in the developed world.
3. He observed that it was against the above background that UACCIA/
TCCIA was happy to host the Forum and urged that the EAC must leave
no stone unturned in its effort to promote the implementation of
harmonization of investment incentives. He concluded by wishing the
participants a successful Forum.
Chairpersons and Moderator of the Forum
Mr. Chris Kyerere, Chairman Board of Directors was elected as the Chairman for
the 1st Day while Prof (Mrs.) Ankrah of Ankra Foundation was elected the
chairperson for the 2nd day.
Dr. Kamukama Dixon was elected the Moderator for the entire Forum for 2days.
Agenda of the Forum
No. Item Description
Day 1: 27th February 2012
Session 1: Registration Moderator Dr. Kamukama Dixon, assisted by Experts
& Self Introduction of
Opening Remarks Opening Remarks by the Executive Director-
Mr. Bernard Bangirana , Uganda Allied Chamber of
Commerce, Industry and Agriculture (UACCIA)
Presentation 1: Project Overview and Objectives for the Forum, by
Project Experts: Mr. Frederick Alipui & Mr. Amos
Session 2: Country Presentation
Presentation 2 Overview and Profile of Uganda Allied Chamber of
Commerce, Industry and Agriculture, by Ms. Beatrice
Alyanata, Director for Communication & IT
Presentation 3 The Investment Climate in Kenya and the need for
reforms in the Investment Incentives framework by
Mr. Martin Mutuku, Kenya Investment Authority
Presentation 4: The Investment Climate in Tanzania and the need for
reforms in the Investment Incentives framework by
Mr. Joel Kyaruzi Director, Research, Tanzania
Presentation 5: The Investment Climate in Rwanda and the need for
reforms in the Investment Incentives framework by
Mr. Manzi Antoine, Rwanda Private Sector Federation
Open discussion Remarks from Tanzania Chamber of Commerce,
Industry and Agriculture
Presentation 6: The Investment Climate in Burundi and the need for
reforms in the Investment Incentives framework by
Ms. Fridah Umurerwa for the General Secretary
Confederation of Burundi Chambers of Commerce
Presentation 7: Summary/Snapshot of the Findings of the Climate
Incentives Needs Assessment survey conducted in
East Africa by Mr. Frederick Alipui and Mr. Amos
Discussion Open Discussion and comment from Branding Kenya
Initiatives by Mr. Charles Kahutu
Closing Day Communication by Event Moderator
Opening Cocktail and Networking by Participants
Day 2: 28th February, 2012
Presentation 8: Building regional Agenda for a Harmonized
Investment facilitation environment in East Africa, by
Mr. Chris Kyerere, Board Chairman, Uganda Allied
Chamber of Commerce, Industry and Agriculture
Presentation 9 Lessons from ECOWAS
"Harmonization of National Investment INCENTIVES
and the efforts at the implementation of the ECOWAS
Supplementary Act A/SA.3/12/08 – Search for Options
for the Implementation with the ECOWAS Regional
Investment Policy Framework". Supplementary
Presentation by Mr. Kwadwo Afari, Partner, SIMA-
AFRINVEST Consult Consortium
Presentation 10 : The Framework for a Harmonized Incentive
Framework for East Africa - Strategies and Options by
Mr. Frederick Alipui
Wrap-up remarks by Mr. Chris Kyerere, Board
Chairman, Uganda Allied Chamber of Commerce-then
Invite the Chief Guest to officially Close the Forum
Closing Remarks by Prof. Ankrah of Ankra Foundation
and Board Member, Uganda Allied Chamber of
Commerce, Industry and Agriculture
End of the Forum
Project Overview and Objectives for the Forum by Project Experts:
Mr. Frederick Alipui and Mr. Amos Tindyebwa (ACE, International
Consultants based in Madrid, Spain).
1) Mr. Amos Tindyebwa and Mr. Frederick Alipui gave an Overview and
Objective of the Assignment. He noted that the purpose of the Public-
Private Dialogue (PPD) Forum was to create a platform for dialogue on
Private Sector Development issues, including Regional Integration,
discussion of constraints to doing business and investing in East Africa.
The results would include developing a joint/harmonized investment
incentive framework for East Africa to create Common Market for the
region. This, he noted, required reforms in macroeconomic policy,
improvement in legislation, institutional Set-up and financial measures
among others. These he noted would result in:
Ensuring an enabling environment for the private sector to operate
Promote reforms in business and investment policies;
Promote reforms in procedures and laws, and provide the
necessary investment incentives.
2) The ultimate objective is to achieve a comprehensive harmonized
investment framework – agreed indicators – to monitor investment
performance in the EAC.
3) In this direction he noted that a 2 year Road map has been agreed upon
during which period:
a. Improved “Doing Business” ranking will be undertaken;
b. There will be awareness campaign during which recommendations
and remedial actions would be made and
c. Lobbying and undertaking advocacy with Governments of Partners
States/EAC Policy Organs will be done.
4) To achieve this objective he noted an effective Communication strategy
would be developed or put in place.
5) Participants are invited to engage in a free participatory Dialogue- The
160 participants were drawn from the various Chambers of Commerce
and Industries in the EAC, government officials, and other private sector
6) The composition of the participants reflected what PPD stands. Quoting
from a PPD Handbook: Toolkit for Business Environment Reformers – by
Benjamin Herzberg & Andrew Wright – DFID/World Bank/IFC/OECD he
outlined the PPD - OBJECTIVES as seeking to promote right conditions for
PSD & Poverty Reduction and identifying pitfalls for Reform. He noted
that PPD takes various nature or forms including being ad-hoc; formal;
informal; wide range or focused
7) He also noted that PPD initiators can be Governments, Entrepreneurs,
Donors, CSOs, Labour Unions, Private sector Representative among others
by this definition and structure, the Kampala Forum was appropriate.
8) The Team Leader outlined the benefits to be derived to include
9) Policy reforms being the most tangible benefits of PPD. This includes new
legislation, amendment or scrapping of existing legislation, removal or
simplification of regulations and controls, standardization of procedures
across different jurisdictions, and establishment of new institutions as well
as building constituency for investment climate reform.
10) He noted that PPD allows for:
a. Better diagnosis of investment climate problems;
b. Better design of policy reform;
c. Governments are able to devise sensible prioritization plans and
d. PPD also encourage investors to take a longer term view and
cooperate with laws and regulations;
e. Entrepreneurs understand what a government intended reform
package are and they accept and work with those reforms;
f. Further he observed that PPD helps to ensure that:
i. Reforms impact on the ground.
ii. Awareness dissemination of changes.
iii. There is information feed -back to stakeholders.
iv. Pressure for action is sustained.
v. There is transparency.
vi. There is good governance - including lobbying.
vii. PPD allows Monitoring and Evaluation systems.
viii. Promote a culture of compliance.
ix. Enables governments to perform Regulatory Impact
x. Establish checks and balances for the private sector.
xi. There is mutual trust and understanding - PSD.
xii. Social cohesion is improved.
xiii. There is sustained engagement between public and private
xiv. There is understanding, and cooperation among the
xv. PPD allows for regular contacts - knowing each other better.
xvi. Building consensus – for Action.
11) He noted that at the end of the Forum his expectation is that
HARMONIZED INCENTIVE FRAMEWORK FOR EAST AFRICAN COMMON
MARKET would be designed and a two (2)- YEAR ROADMAP FOR
IMPLEMENTATION – 2013-2015 would be accepted and adopted by the
Overview and Profile of Uganda Allied Chamber of Commerce, Industry
and Agriculture (UACCIA) by Ms. Beatrice Alyanata, Director,
Communication and IT.
The presenter outlines the objectives of UACCIA and the organization structure
of the institution. She elaborated the institution focus in promoting a business
friendly and investment enabling climate for East Africa. She outline a number of
activities that the chamber has been doing with a number of stakeholders to
improve trade facilitation services in East Africa.
The Investment Climate in Kenya and the need for reforms in the
Investment Incentives framework by Mr. Mutuku Martin, Kenya
1) The Participant gave an over view of the Investment Climate in Kenya
and noted that KenInvest is charged with the responsibility of
promoting and facilitating investments in Kenya. He outlined the
vision of KenInvest as “To make Kenya a Country of Choice for
Investments” and the Mission is “to attract, facilitate, retain and
expand both domestic and international investments in Kenya through
provision of quality service”
2) He identified the services to cover the following- Policy Advocacy,
Investment Promotion, Investment facilitation, Investment tracking
and after care service.
3) Defining investment climate, the Participant noted that an Investment
climate refers to the economic and business environment
conditions that influence decisions to invest and thus a sound
investment climate must provide private firms with opportunities and
enticement to invest and grow their businesses. He observed that a
vibrant private sector creates jobs, provides the necessary goods and
services to improve living standards, and contributes to taxes that help
fund health, education, and provide other public goods. He also noted
that sound investment climate attracts FDI which has become a
necessary ingredient in BOP and macro-stability for EAC
4) He identified the Investment Incentives in Kenya to include:
i. Investment allowance - 100% investment deduction within
Nairobi, Mombasa and Kisumu and 150% outside the three
ii. Duty remission for raw materials and inputs imported for
production of exports.
iii. Manufacturing under Bond (MUB).
iv. Import duty and VAT waiver on capital goods.
v. Export Processing Zones (EPZ) Scheme.
vi. 10 years holidays.
vii. SEZ Policy.
viii. Kenya has signed IPPAs and DTAs with several countries.
5) The Participant noted that there are challenges and these must be
i. Fix and Improve Physical Infrastructure.
ii. Fight Crime and Insecurity.
iii. Achieve Meaningful Business Regulation.
iv. Improve Trade Facilitation and Market Access esp. in EAC.
v. Create Tax and Tax Administration Conducive to Business
vi. Protection of Intellectual Property Rights and Dealing With
Counterfeits and Piracy.
vii. Unleash ICT Potential to Drive.
viii. Building Efficient Public Service and Enhanced
Government/Private Sector Engagement And Coordination.
6) He observed that several laws have been enacted to enhance the
Investment Climate in Kenya. Other tools have been put in place to
enhance investment ibn Kenya. He enumerated them as follows:
i. Legal Reforms.
New Constitution of Kenya
Business Regulation Bill
The Private Public Partnership (PPP) Bill
DOSS – Digital One Stop Shop
ii. Iinvestment facilitation tool.
Support for investment marketing and promotion,
Provide online investor tracking services, aftercare
iii. Enhanced Public Private Dialogue.
Prime Ministers Round Table (PMIRT); PIRT
Chamber enhancement and revitalization
7) He identified the way forward to include the following:
i. Faster implementation of reforms to improve the ease of
doing business in Kenya.
ii. Addressing the Business Agenda E.g. Investments in
infrastructure and EAC investment promotion Strategies.
8) He noted that there is the need to review the merits and demerits of
tax incentives, with a view to guiding tax incentives harmonization in
9) He concluded by observing that there is the need for a formalized EAC
forum for continuous engagement and sharing on a common regional
Comments and Contributions
The Investment Climate in Tanzania and the Need for Reforms in the
Investment Incentive Framework by Mr. John Joel Kyaruzi, Director of
Research and Information Systems
1) The Participant identified the Mission of TIC which is “to contribute to
the sustainable economic development of Tanzania through
attraction of new investment and maximising its impact on the
economy” and observed that mission guided investment opportunities
being pursued. Among others he identified the objectives to include:
i. Raise the profile and image of Tanzania as a business location.
ii. Increase FDI flows in key sectors.
iii. Increase Investment by Tanzanians.
iv. Maximise the benefits of investment to the Tanzanian economy.
v. Ensure a competitive business environment.
vi. Develop and promote sites and infrastructure that meet
vii. Build and sustain TIC capacity to deliver.
viii. Continuously monitor the performance of Investment Promotion
2) He identified the targeted investment sectors in Tanzania as:
ii. Extractive Industry
iii. Infrastructure and
3) He observed that projects registered have generally good over the last 5
years peaking at US$871m in 2008. He illustrated this with the chart
4) He categorized the projects registered by TIC into Domestic Investors,
Foreign Investors and Joint Ventures. He noted that between 2000 and
2010 48% of all projects registered by TIC were Tanzanians while 27%
were foreigners and the remainder of 25% were JVs;
Comments and Contributions
5) The general comments were that the Tanzania economy is closed in
practical terms and the efforts must be made to open up.
The Investment Climate in Rwanda and the need for reforms in the
Investment Incentives framework by Mr. Manzi Antoine, Director for
Trade and Investment, Rwanda Private Sector Federation,
1) The Participant gave an overview of the Investment environment in
Rwanda and noted that the Government of Rwanda recognizes the
private sector as an essential engine for development and thus
welcomes foreign investment in policy and in practice. He noted that
as a result of reforms implemented in 2008 and 2009, Rwanda is now
recognized by the World Bank as the world’s top reformer in adopting
business regulation reforms. This has raised the country’s ranking in
the World Bank “Ease of Doing Business”.
2) He observed that the government of Rwanda encourages foreign
investment through outreach and tax incentives. The only difference
in treatment between foreign and domestic companies is the initial
capital requirement for official registration which he noted, is USD
250,000 for foreign investors; USD 100,000 for domestic investors.
3) Further he noted that foreign investors can acquire real estate, but
there is a general limit on land ownership. Although land is owned by
the state, both foreign and local investors can acquire land through
lease-hold agreements that extend from 50 to 99 years.
4) The Participant observed that the Rwanda Development Board (RDB)
assists potential investors in securing all required approvals,
certificates, and land for their projects, work permits, and tax
incentives. Foreign investors who pass through RDB have not reported
any discrimination. Legally, foreign firms are treated equally with
regard to taxes, access to licenses, approvals, and procurement.
5) The Incentives are in the form of Preferential Tax Incentives, Tax
discounts and Tax exemptions. These are categorized as follows:
a. The Government gives preferential tax incentives to investors
who create significant export-oriented growth. The
government determines eligibility for such incentives upon
request based on several factors such as (i) exports must total
at least 80 % of production (or exports total at least 10 percent
if manufacturing under bond); (ii) capital investment is at least
USD 100,000 (for local and COMESA members) or USD 250,000
(for non COMESA investors).
b. An investment allowance of forty percent (40%) of the invested
amount in new or used assets may be depreciated excluding
motor vehicles that carry less than eight (8) persons
c. The investment allowance reduces the acquisition or
construction cost, as well as the basic depreciation value of
pooled business assets.
d. A registered investment entity that operates in a Free Trade
Zone and foreign companies that have their headquarters in
Rwanda that fulfils the requirements stipulated in the Rwandan
law on Investment Promotion is entitled to:
i. Pay corporate income tax at the rate of zero per cent
ii. Exemption from 15% withholding tax mentioned in
Article 51 of the law nº 16/2005 of 18/08/2005 on direct
iii. Tax free repatriation of profits.
6) The Participant recounted the successes of the reforms as follow:
i. Registration of business has been reduced from 15 days
to 24 hours;
ii. Processing of investment certificate takes 2 days;
iii. Investors seeking utilities to their premises takes not
more than 24 hours to access the facility;
iv. Visa and work permit take 1 hour to process; and
v. Processing of exemption on goods (capital goods and
raw materials take not more than 15 minutes,
Comments and Contributions
Investment Climate in Burundi and the Need for Reforms in the
Investment Incentive Framework by Mrs. FRIDAH UMURERWA
The Expert gave an overview of the Burundian economy and indicated the
country is landlocked and resource-poor with an underdeveloped manufacturing
sector. The economy is predominantly agricultural with 93.6% of the labor force
in agriculture. The labour force in the other sectors is 2.3% for industry and the
services accounting for 4.1%. She noted that the Real GDP was US$1.4bn. She
indicated the sectoral structure of the economy as being:
• Agriculture: 33.4%
• Industry: 20.7%
• Services: 45.9% (2009 est.)
She observed that the country is poor with about 68% of the population living
below the poverty line.
The primary exports of the country are coffee and tea, the two produce
accounting for 90% of the foreign exchange earnings of the country.
Burundi's export earning - and its ability to pay for imports - rests primarily on
weather conditions and international coffee and tea prices.
On Investment opportunities the Expert identified opportunities in the the
Fruits and tomato processing
Service rendering establishments
REAL ESTATE DEVELOPMENT
Privatization of national real estate company SIP
She noted that the Burundi Investment Promotion Agency (API) whose mission
to promote investment and export, disseminate information handles investment
and export promotion activities in the country.
The API assists and supports investors in general and exporters in particular in
obtaining such documents required by law. They also are responsible for
designing the reforms required to improve the business climate in the country:
• She identified the major export items to be Coffee, Tea, Sugar, Cotton,
Hides and the main destinations of exports being Belgium, Germany,
Switzerland, Holland, England, USA;
• The major import are capital goods, petroleum products and foodstuffs
with the origins of these imports being
Kenya, Uganda, Tanzania, South Africa, Dubai, China, Belgium, France,
Germany, India and Zambia.
Additionally the API provides advice to the government on cases of non-
application or misapplication of any law or regulation in connection with the
promotion of investment and exports
The Federal Chamber Of Commerce and Industry in Burundi which champions
the cause of the private sector is very young. It was started in May 2010 and it is
composed of 13 main Chambers. Each chamber has its own President, Vice-
President, and General Secretary
Being landlocked it needs to cooperate very well with its neighbours hence the
Rwanda Revenue Authority and its Burundian counterpart sign an initial bilateral
agreement on the establishment of one stop border post at Gasenyi 1/ Nemba
In view of the poor resource base, the Burundian government has tried to
partner the private sector for development thus a Port Services PPP project was
started some 30 years ago. It was only handed over to the government in
December 2011. There are others PPP projects such as Hotel Source du Nil,
Credit Bank of Bujumbura (BCB) - among others.
The expert identified some challenges with the PPP arrangement including lack
of a PPP law to protect the private sector, lack of confidence in the concept and
General lack of awareness.
Snapshot of the Findings of the Climate Incentives Needs Assessment
survey conducted in East Africa
1) In his Presentation one of the Project Experts gave an overview of the
entire project. His presentation covered the following broad areas:
i. The size of the EAC Market & Macro economy. Between 2009 and
2010 the 5 EAC economies grew at between 3.4% for Burundi and
6.5% for Rwanda. Agriculture is the mainstay of the 5 economies
accounting for between 22% and 45% of the GDP.
ii. The GDP per capita in the EAC states ranges between US$441 and
US$1, 600 as indicated in the table below. All the 5 countries have
seen upward trending GDP/Capita over the period 2007 to 2010.
2) He noted that there are potential investment opportunities in Agriculture,
Mining, manufacturing and services in the EAC countries.
3) The investment climate as given by the Expert shows that there is hope
for the future for the EAC. He observed that:
i. The prevailing political, economic and social environment among
the EAC Partner States is conducive for doing business
ii. The signing of the EAC Common Market Protocol in November 2009
is a step forward in enhancing cross border business, trade and
iii. These rights enshrined in the EAC Protocol include, the right to
permanent residence, the right to establishment, access to land,
free movement of capital, goods and services, and freedom of
movement for workers.
4) However he noted that enabling investment climate in the EAC region
eventually requires harmonisation of various laws and legislations
affecting intra EAC business and investment flows.
5) Furthermore Partnerships with the private sector continue to be an
important factor for improvement of investment climate and promotion of
investment in the Region.
6) He gave a general trend of investment flows into the EAC Region as
i. Overall investment inflows to the EAC region increased by 8.5
percent from US$ 8,333.4 million in 2007 to US$ 9,040.5 million in
ii. However, there was a 33 percent decrease in the number of total
approved projects from 996 in 2007 to 666 in 2008.
iii. Kenya had the highest share of investment inflows in the region in
spite of the 2008 global financial meltdown, coupled with post
election chaos. Major source countries were China, UK, Japan,
India, Italy and USA.
iv. During 2008, Tanzania Investment Centre (TIC) registered
investment flows valued at US$ 3,229.2 million, compared with US$
5,715.6 million in 2007.
v. In 2008 the value of FDI and local investment registered by TIC
stood at US$ 6,680.10 million.
vi. Uganda’s investment portfolio more than doubled from US$ 560.7
million in 2007 to US$ 1,254.2 million in 2008.. The major sources
of investment were Singapore, UK and India.
vii. Rwanda’s total investment inflow increased approximately by 10%
in Investment value, from US$ 230.46 million in 2007 to US$
311.96 million in 2008).
viii. Uganda and Tanzania attracted most intra-EAC investment flows
with Kenya being the dominant source.
ix. Total investment inflows from EAC Partner States to Tanzania
increased from US$ 50.88 million in 2007 to US$ 370.18 million in
2008. Investment from Kenya rose from US$ 45.8 million in 2007
to US$ 366.3 million in 2008.
x. This increase was attributed to major investments from Kenya
particularly in steel manufacturing, construction of commercial
buildings, manufacturing of farm implements and construction of
xi. The combined value of approved investments from both Kenya and
Tanzania to Uganda more than tripled from US$ 34.9 million in
2007 to US$ 142.5 million in 2008
xii. In 2008, the Rwanda Development Board (RDB) attracted
investments worth US$ 392.52 million from 38 projects registered,
compared to 44 projects valued at US$ 230.5 million in the
xiii. Rwanda’s investment inflows from the EAC Partner States
decreased from US$ 35.2 million to US$ 17.6 million in 2008, all of
it originating from Kenya.
xiv. The investment inflows from the rest of the world to Rwanda
increased by 60% percent from US$ 195.3 million in 2007 to US$
312 million in 2008. In comparison, Kenyan firms were leading in
investment within the EAC region.
7) Using data from “Ease of Doing Business” Rwanda is ranked as the 58th
country globally where reforms for doing business has improved
considerably. Compared to its peers in the EAC is seen as the country that
has seen significant improvement with its reforms. The Expert gave the
global and comparative rankings as follows:
8) The Expert outlined some key concerns in the region to include the
i. The process of harmonizing all the laws pertaining to doing
business started with the view to getting rid of all the
“nuisance” taxes impeding business and investment in the
region in 2011 (EAC 2011).
ii. Many studies have identified the challenges impeding trade
and investment in the region (World Bank 2011).
iii. There is now a need for a wider discussion of the investment
climate in East Africa, issues of enhancing regional
integration and trade and investment both in the East
African Community and with the wider African region
(Memberships in blocks).
iv. Alongside these areas there is also a need for specific
discussions on key sectors and private sector segments
across the region including, SMEs, Agriculture,
Infrastructure, Energy and ICT.
v. Private sector development (PSD) Strategy adopted in July
2006 by the East African Community (EAC) has not
adequately informed the PPP approach to improve the
investment climate-but initiatives exist in Kenya, Uganda,
Rwanda and Tanzania.
9) He also identified the various investment incentives and noted the
i. Tax Holidays in Kenya, Tanzania and Uganda.
ii. Investment allowance - 100% investment deduction within
Nairobi, Mombasa and Kisumu and 150% outside the three
iii. Duty remission for raw materials and inputs imported for
production of exports.
iv. Import duty and VAT waiver on capital goods.
v. Export Processing Zones (EPZ) Scheme and Economic
vi. 10 years Tax holidays.
vii. SEZ Policy (Kenya, Rwanda).
10) He outlined the challenges facing the EAC that have to addressed on the
way to harmonization to include:
i. Cumbersome administrative procedures and regulations
ii. Poor Infrastructure (Road & Railway network, Electricity).
iii. Efficient and costly utilities relative to other regions
iv. Inadequate export and investment incentives to encourage
v. Weak Private sector
vi. Non-tariff barriers linked to procedures e. g. corruption
vii. Conflicting frameworks e.g EPZ, EDZ and EPV
Comments and Contributions
Some Participants were concerned about the rankings undertaken by
international organizations. However the consensus was that until EAC states
found better ways of undertaking rankings, the external organizations would
continue to rank them and be the point for decision making and reform.
Building A Regional Agenda For Harmonized Investment Facilitation
Environment in East Africa- Key issues for Private-Public Sector
Engagement by Mr. Chris Kyerere; Chairman Board of Directors-
Uganda Allied Chamber of Commerce, Industry and Agriculture
1) The Participant in his presentation recapped major issues affecting
Investment Climate in East Africa which he noted included the following:
i. Doing Business constraints are numerous and continue to
hamper investment promotion.
ii. The regional competitiveness ranking is poor despite a few
iii. EAC as a region has not paid adequate attention to the cross-
cutting issues in investment promotion notably roads, railways
and other infrastructure.
iv. The private sector has not gained adequate ground to influence
policy and regulatory reforms.
v. Emphasis is paid to FDI and less on domestic investors.
2) He observed that
i. It is important to promote Investment through a common
understanding of major constraints.
ii. The Public-Private Partnership (PPP) approach is the most effective
mechanism to be promoted.
iii. The Private sector needs to be mobilized to engage the public
sector on reforms.
iv. Improving the regional ranking in doing business will require
concerted efforts towards harmonizing the various regulations,
rules and procedures that govern the doing business process
3) To address the above issues he suggested a Regional Agenda which
should include but not limited to:
i. The Revival & Strengthening of the East African Chamber of
Commerce, Industry and Agriculture. This he observed is the true
VOICE of SMEs and the private sector.
ii. Creating a Regional Think Tank on Investment and Trade Policy
Reforms to increase information sharing and influencing public-
private dialogue to high levels.
iii. Strengthening Collaborative efforts in developing programmes and
projects to build capacity of the private sector. (share home grown
lessons & best practices).
iv. Benchmarking our competitiveness ranking with regions that are
performing well such that we justify the need for technical
assistance to support the private sector.
4) He identified the necessary building blocks for a Regional Agenda for
Investment facilitation environment as:
i. A Strengthened Private Sector for Dialogue and Advocacy.
ii. Mechanisms for Public-Private Partnerships.
iii. Private Sector Minded Investment Promotion Agencies.
iv. Continuous dialogue through regional partnerships.
5) He urged the participants
i. to trace their steps to revive the East African Chamber of
Commerce, Industry and Agriculture ;
ii. to find a way for the East African economies to position themselves
in the current International Investment market; and
iii. the private sector must lead the process of reforms and
mechanisms for improving the investment climate in EAC
"Harmonization of National Investment Incentives and the efforts at
the implementation of the ECOWAS Supplementary Act A/SA.3/12/08
– Search for Options for the Implementation with the ECOWAS
Regional Investment Policy Framework". Lessons from ECOWAS-
Supplementary Presentation by Mr. Kwadwo Ansah Afari, Partner,
SIMA-AFRINVEST Consult Consortium
1) In his Presentation on the above Sub Topic, the Expert who is an
Investment and Management Consultant and a Member of the Ghana
National Chamber of Commerce and Industries (GNCCI) gave a brief
history of the foundation of ECOWAS in 1975 and its objectives.
2) He observed that ECOWAS Treaty, right from its inception envisioned a
Community in which every individual and corporate citizen has the
opportunity to realize his or its potentials; a Community in which social
and economic justice is enshrined in law and embedded in practice; a
Community from which poverty, unemployment and social exclusion
was to be reduced if not eradicated; a Community in which all
citizens will willingly accept a responsibility to contribute to the welfare of
their fellow citizens and to the common good of the region; and one
which serves as a vehicle for the exercise of the collective strength of the
region, and the affirmation of the collective identity of the ECOWAS
3) He noted that currently there are fifteen (15) countries forming the
ECOWAS but he focused his Presentation on five (5) Anglophone Members
in the Economic Community namely Nigeria, Ghana, Sierra Leone, Liberia
and The Gambia.
4) He observed that ECOWAS is small, not only in population, but also in
terms of economic output and that the challenges inherent in its individual
“smallness” can be addressed by leveraging its combined population of
about 250million and their resources.
5) Thus to achieve sufficient size, economies of scale, flexibility, and
creativity to attract and retain investment, the ECOWAS Common
Investment Market (ECIM) was formed on the premise that Investment
has a potential to create a link between the ECOWAS member states and
world market. He outlined the key elements of the ECIM as:
i. Free factor movement – thus of goods and services; capital
ii. Right of establishment,
iii. A Common External Tariff(CET)
iv. A common trade policy; and
v. harmonization of laws
6) Furthermore he observed that as part of the efforts to provide an enabling
environment for: the growth and development of industries, inflow of
foreign direct investment (FDI), shield existing investments from unfair
competition, and stimulate the expansion of domestic production capacity,
the Governments of Nigeria, Ghana, The Gambia, Sierra Leone and Liberia
have developed a package of incentives for various sectors of their
7) The countries have also established “A one-stop agency” in the individual
countries to address Investment issues. The agencies are:
i. The Nigerian Investment Promotion Council (NIPC);
ii. Ghana Investment Promotion Centre (GIPC);
iii. The National Investment Commission (NIC) of Liberia;
iv. The Sierra Leone Export Development and Investment
Corporation (SLEDIC) ; and
v. The Gambia Investment & Export Promotion Agency
8) He again noted that Investment incentives in the 5 Anglophone member
i. direct instruments such as tax holidays, investment tax credits,
depreciation allowances etc. which tend to reduce the fixed costs of
making an investment; and
ii. Indirect instruments, such as non foreign exchange restrictions
that affect the decision to invest.
9) But the granting of the nature of investment incentives is variable.
The Tax systems are also variable, with tax holidays ranging from 3-10
years but are different for each country. Loss carry-forward provisions
also range from 3-5 years and withholding taxes on royalties, fees,
interest payments and dividends are also variable.
10)He observed that the harmonization of Investments as well as Investment
Incentives is critical to achieve the objectives of ECIM and the expected
high inflow of investments, including FDI, into the Sub-region.
11)Touching briefing on FDI, he said it is commonplace now that the current
globalization trends and the flow of foreign direct investment (FDI) require
aggregation and integration of economies of proximity in addition to
political stability to attract the FDI. He observed that there is serious
competition for FDI from developing countries and the areas with
conducive business environments would attract the required FDI. He used
the FDI destination in Africa and the trend for the five year period 2005-
2010- (Table 1 and Figure 1 below) to stress the need for Africa as a
Continent and the Regional Blocks as Economies of Proximity, to
Table 1: FDI Inflow into Africa- 2005-2010 (Amt in US$bn)
2005 2006 2007 2008 2009 2010
Africa 38.2 55.4 63.1 72.2 58.6 52.3
Northern Africa 12.2 23.1 24.8 24.1 18.3 19.7
Middle Africa 9.4 12.1 15.7 20.9 18.7 14.4
Western Africa 7.1 16.0 9.5 11.1 10.0 9.1
Southern Africa 7.3 0.6 7.1 10.4 6.6 3.1
Eastern Africa 2.1 3.6 6.0 5.7 5.0 6.0
Source: 2005-09 UNCTAD; 2010 IMF estimates from October 2010
12) The steady drop in FDI flows into Africa since 2007/8 should be of
concern which calls for new strategies by all concerned. Perceived
corruption and political instability could be contributory factors. ECOWAS
considers as key to the “dream” of ECOWAS Single market as hinging,
among other things, on:
i. Transparency of investment rules, regulations and policies,
ii. Simplified procedures for applications and approvals,
iii. Collective initiative such as:
The establishment of ECOBIZ (a data-base system to
enhance the flow of ECOWAS Investment; and
Sustained public-private engagement through regular
dialogues by the NSAs and the State Authorities
13) Referring to Article 3 (2i) of the ECOWAS Treaty, which talks about
Harmonization of Investments and Investment Incentives, he observed
that the authority of the Heads of State and Government of the
region adopted three (3) Supplementary Acts in December 2008
to ensure effective implementation of the ECIM and the search
for the Single Market in the Sub region. The Supplementary Acts
adopted are :
i. Supplementary Act A/SA.1/12/08; Community Competition
Rules and the modalities for their application within ECOWAS-
ii. -Supplementary Act A/SA.2/12/08- Functions and
Operation of the Regional Competition Authority for ECOWAS;
iii. Supplementary Act A/SA.3/12/08- Community Rules on
Investment and the modalities for their implementation within
14) Thus the Implementation of ECOWAS integration process took a giant
step with the adoption of these Supplementary Acts.
15) The objective of the Community Rules on Investment (Supplementary
Act A/SA.3/12/08) is to promote investment that supports
sustainable development of the Sub Region.
16) The conditions precedent to the success of Supplementary Act -
Supplementary Act A/SA.3/12/08 are that:
i. There must be Equal treatment
ii. No expropriation/nationalization except for a public purpose-
where it happens, appropriate compensation has to be paid
iii. Free transfer of assets
iv. Corporate social responsibility
v. Investor liability to be properly addressed
vi. Dispute settlement is to be subject to the appropriate laws
vii. Facilitation of cross border investment is critical
viii. Relation to other investment agreements and obligations
ix. Protection of National security is paramount
17) He observed that the achievement of ECIM was to be facilitated by
supportive roles of regional authorities, national authorities and other
major stakeholders: He outlined the roles and responsibilities under a
Stakeholder Analysis as follows:
Table 2: Stakeholder Analysis: Roles and Responsibilities for
Implementation of Supplementary Acts
Stakeholder Roles and Responsibilities
ECOWAS Governments • Assume lead role in investment
• Propose annual policy targets
and taking into account inputs
from the private sector
• Provide political support and
share best practices
Private Sector • Contribute to measuring
progress on investment policies
• Give opinions on policy reform
issues through dialogue with
• Share best practices with
ECOWAS as an institution • Provide ECOWAS expertise,
standards and best practices
• Evaluate and monitor progress
in investment reform
• Support implementation of
investment reforms through
coaching and peer review
• Foster the dialogue between
public and private sectors
• Ensure political support through
regular ministerial conferences
and other regional fora
ECOWAS Citizens • Through civil society groups and
institutions engage more
effectively with ECOWAS
• Keep the societal goals of broad-
based economic development
and poverty reduction high on
the agenda at both national and
Relevant Regional Institutions • Association Of Investment
Promotion Agencies Of West
• West African Economic And
• Organization For The
Harmonization Of Business Law
• New Partnership for Africa's
Development (NEPAD) Business
• National Chambers Of
Commerce And Industries And
Other Business Associations
Success Story of ECOWAS through Private Sector Initiative
The Expert cited one major and successful ECOWAS Investment, the ECOBANK
Transnational Incorporated (ETI) which was established 1985 under a private
sector initiative spearheaded by the Federation of West African Chambers
of Commerce and Industry (FEWACCI) with the support of ECOWAS.
The ETI signed a Headquarters' Agreement with the Togolese government. The
agreement granted the ETI the powers of a regional financial institution, as well
as an international organization status.
From one Bank, ETI can now boast of 30 ECOBANKS across Africa and
ECOBANK France as at the end of 2011.
In addition to the commercial banking services, ECOBANK has established
specialized subsidiary companies. These are:
i. ECOBANK Development Corporation (EDC) – based Lomé, Togo
ii. EDC Investment Corporation - based Abidjan, Ivory Coast
iii. EDC Investment Corporation - based Douala, Cameroon
iv. EDC Securities Limited - based Lagos, Nigeria
v. EDC Stockbrokers Limited - based Accra, Ghana
vi. ECOBANK Asset Management - based Abidjan, Ivory Coast
vii. e-Process International SA - based Lomé, Togo
viii. ECV Servicios - based Praia, Cape Verde
He observed that the confidence of the Community has been bolstered by the
success of the Banking service and has envisioned the establishment of A
“Regional Sealink Project” aimed at improving regional maritime
services. This Project is at an advanced stage of taking off the blocks.
Figure 1: Transnational Regional Maritime Shipping Company (RMSC)
In conclusion he observed that, the search for ECOWAS Single Market is not all
“Roses without any thorns”. Efforts are being made but we are not there yet.
The economic disparities between W Africa (as in other parts of Africa) and other
developing regions remain considerable. For instance infrastructure, human
capital, supplier networks, technological capabilities and support institutions are
all relatively weak. In some countries they are stagnant while in others, they are
But For ECOWAS, the way forward is to continue to seek harmonization
strategies for the investment incentives in the respective states. And knowing
that political intervention cannot be underestimated in this matter, ECOWAS
endorses the initiative by the authority of the Heads of State and Government of
the region who adopted the Supplementary Acts SA/A/3/12/8 in December 2008
to help address these concerns about the investment landscape, The Non State
Actors (NSAs) in ECOWAS have been sensitizing and will continue to sensitize the
stakeholders on the competitive individual member states’ incentive framework,
while simultaneously leveraging their combined comparative advantages to
attract larger private investment into the sub-region.
1) It is now generally agreed that the private sector should drive the
process and every effort is being made in this direction.
2) Thus the establishment of the Private Sector Department of the
ECOWAS Commission is to underscore this strategy. The continuous
involvement of governments and the Non State Actors e.g. the National
Chambers of Commerce & Industries and the media cannot be
3) There is a clarion call for the establishment of Regional Investment
Promotion Agency (RIPA) to harmonize the IPAs of individual states.
The RIPA is to function to increase international awareness of
- investment opportunities,
- practices, and
- major events affecting investments through PPDs
4) There are Public-Private Partnership (PPP) Secretariats in Ghana and
Nigeria among others to address some of these concerns.
5) The tempo is being sustained to ensure that the investment incentives
are fully harmonized so that the 250million ECOWAS market will be
properly harnessed with a view enhancing trade, increasing profitability
and reducing POVERTY IN THE SUBREGION.
Numerous favourable comments on the success story of ECOWAS especially on
the Regional Banking System, and envisioned Sea Link Project were made by the
1) Some participants hearing for the first time that ECOBANK Transnational
Inc was a Sub Regional Bank which it was conceived by the Federation
West African Chambers of Commerce and Industries (FEWACCI) with the
tacit support of ECOWAS commended the regional body.
2) Participants were of the view that the Non-State Actors (NSA) in East
African Community (EAC) must learn from their ECOWAS counterparts
through official collaboration of how they have been successful even in
the face of challenges.
3) Participants observed that EAC need not re-invent the wheel. They noted
that the success of ECOWAS means whatever ideas they (EAC)
conceptualize of doing they CAN achieve it and that that they need to
look too far for results they need for their economic development.
4) Participants were of the conviction that the NSAs in the two economic
blocks must invite each other to their respective meetings particularly
their Annual General Meetings.
5) Above all, the participants underscored the importance of close and
effective interaction not only between NSAs of the two Economic blocks
but also between ECOWAS and EAC as independent Institutions. They
asked for joint Annual General Meetings or representations to each other’s
Annual General Meetings so that they can learn from each other.
FRAMEWORK FOR HARMONISED INCENTIVES FOR EAST AFRINCA
COMMON MARKET -Strategies and Options- Experts Frederick Aripui
and Tindyebwa Amos
1) In coming up with the Framework, the Consultant defined a term –
Common Market- that has been used by all Presenters in several forms
during the Forum.
2) He went a step further to talk about the 3rd critical stage in regional
integration – which covers Free Trade Areas (FTA)- (ie un-harmonized
tariffs), and Customs Union (CET).
3) He identified the seven(7) freedoms that are critical for HARMONIZATION
i. Freedom of Movement of Goods
ii. Freedom of Movement of Persons
iii. Freedom of Labour
iv. Freedom to Establish Business (Right of Establishment)
v. Freedom to Settle ( Right of Residence)
vi. Freedom of Movement of Services
vii. Freedom of Movement of Capital
4) He addressed the issues raised by FORUM and noted that the Participants
observed that the FUNDAMENTALS FOR INCENTIVES should cover:
a. Enabling Environment (Incentives)– to be created by Public Sector
Fiscal and Non- Fiscal Incentives also to be put in place by
the public sector
b. PPD should establish a list of Cross-Cutting Issues. In this direction
the Partner States Investment in Physical Integration Projects and
challenges were assessed. They included the following:
There is the need to address trade facilitation challenges of
the landlocked Partners of EAC through
– Interventions at the Ports of Mombasa and Dar es
– Interventions at the Land Border – Namanga, Taveta
– Interventions through Construction of Gas/Petroleum
Pipelines from Eldoret to Bujumbura.
The Telecommunications Inter-Connectivity challenges were
to be addressed to allow for better trade and investment
5) The Consultant addressed pertinent issues raised by the Forum
Participants. for instance:
a. forum participants wanted to agree on what to harmonise
b. agree on common understanding of issues to harmonize
c. and the strategy to implement what has been agreed for
6) By way of strategy the Forum noted that the private sector needed to
identify incentives needs and develop coherent advocacy issues to reform
a. Other issues to be addressed and harmonized, the Forum noted
were Best Practice at national,, regional land inter-regional levels.
7) There was also the need to establish benchmarks – performance
indicators for private sector investment, technology transfer, and
employment creation potential.
8) There was also the need to build a strong regional communication
strategy, aggressively advocate and establish EAC HEADS OF STATE –
PRIVATE SECTOR FORUM.
9) Issues identified that required serious attention were
i. good governance and the issue of corruption
ii. reduction in cost of doing business
iii. the demand for win/win incentives systems
iv. incentives to be customized & harmonized
10) The cross-border trade facilitation challenges that required
i. good governance
ii. need to empower women entrepreneurs
iii. need to empower cross-border associations
iv. appropriate use of weighbridge - toll/practices/procedures
v. establishment and or strengthening of cross-border bi-lateral
vi. creation of culture of regional mindset and
vii. avoidance of suspicion –that is promote healthy competition
among the EAC states
The participants made the following recommendations at the end of their
1) Private sector is:
a. To identify areas for PPP
b. To establish trade facilitation facilities at land borders– lease land
from govt. - e.g. Namanga, Busia etc.
2) The level of incentives should include:
iii. Entrepreneurs fund to be domesticated
iv. Unified guarantee fund to finance road construction
3) There should also be:
a. Special Economic Zone Policy
b. Regional Private Sector Annual Performance Evaluation Index on
the basis of the World Bank Doing Business (DB of W.B.)
c. National/Inter-Regional Forum on NTBs
d. Legal & Binding Mechanism To eliminate NTBS
e. EACCIA to be revived and re-located in Arusha
4) The experience of the regional Bodies such as the example from ECOWAS
should be evaluated properly.
1) Participants expressed appreciation to the organizers of the Forum –
UACCIA & TNCCIA AND THE FUNDING ORGANISATION –BIZCLIM AND
ACE, INTERNATIONAL CONSULTANTS.
2) The Forum invited other donors - in particular EU, TRADE MARK AFRICA
etc to continue to assist the beneficiary Institutions and UACCIA.