Source: Daily Monitor SWEDISH multinational corporations have set strategies to expand their investments into the East African countries of Uganda, Kenya and Tanzania.
The over 100 million market population, which came as result of the East African Customs Union, the social and political stability and good investment climate are the reasons behind the Swedish interest to increase investments in the region.
Ericsson, one of the largest world producers of mobile phones (Sony Ericsson) and software, ABB that specialises in the manufacture of generators, power transformers and motors and Tetra Pak world, renown producers of paper packaging materials are some of the corporations in this crusade.
“There is a risk in doing business in Africa but EA is attractive for Ericsson and I must say it is a part of Africa that is easy to handle,” Mr Edvard Gavefalk, the Vice President East Africa Region Ericsson AB, said while presenting a paper titled ‘Why we invested in East Africa.”
This was at a seminar under the theme ‘Business opportunities in the East African Community a 100 million consumer market’ held at the Swedish Chamber of Commerce conference Hall in Stockholm, Sweden on October 20.
At the same event, the United Nations Conference on Trade and Development (UNCTAD) together with the International Chamber of Commerce (ICC) launched the Investment guide to East Africa. The guide helps to raise awareness of the opportunities in particular countries with the involvement of both the private and public sectors.
“This is the first time we are launching the guide in the Scandinavian countries. So far, 18 guides have been produced since 1999-2004, China is one of the other countries that have benefited,” Mr Torbjorn Fredriksson of UNCTAD said. The guide analyses the business climate and difficulties foreign investors face.
“Transport infrastructure is quite inadequate in EAC. Investors complain that it costs more to move from the cargo overland from Dar es Salaam in Tanzania to Mombasa or Mombasa to Kampala,” Fredriksson said.
Bureaucracy is another concern. Things move too slowly in many organs of government and corruption is experienced in the three countries. It was also noted that Non-tariff barriers still exist in the administration of matters such as certificates of origin and valuation of goods, although this may change with the full implementation of the Customs Union.
Looking at the investment trends, Uganda and Tanzania have performed better than Kenya, which recorded the poorest performance in the past decade. Uganda performed better than the other two especially in the more diversified sectors like manufacturing while Tanzania has attracted more investors in the mining sector.
The seminar gave chance to the three EA investment promotion agencies under their umbrella organisation called the East African Business Council (EABC), to unleash their investment manifestoes and commitment to trade with the Swedish investors.
The IPs included the Uganda Investment Authority (UIA), Tanzania Investment Centre (TIC), and the Kenya Investment Authority (KIA).
“Investing in EAC has many advantages, it is the gate way to other African markets, the Common Market for East and Southern Africa (COMESA) and the Southern African Development Community (SADC) where the three EA countries are members,” Mr Emmanuel D Ole Naiko, the Chairman EABC said.
Dr Maggie Kigozi, the Executive Director UIA said the liberalisation of the trade is the reason why investors should not miss the opportunity of investing in the region.
“Removal of state monopolies, export licences, price control and the liberalisation of the financial market is evident that we are working towards investors’ needs,” Kigozi said.
Responding to the issue of corruption, Kigozi said measures have been put in place to eliminate this act, a responsibility of everyone to take up.
Mr Robert Matarei, the head of Eldoret regional Office KIA, cited other opportunities in the agricultural sector that have not been fully exploited.
“Opportunities in commercial farming that is food and cash crop, horticultural products and the construction of modern abattoirs, leather processing and dairy products are still many,” he said.
The Swedish government is setting aside funds to help its investors expand into East Africa. Ms Eva Cassel, the Director of Risk Swedish Export Credits Guarantee Board, said they have so far earmarked $2.5b for the project.