The West renew interest in East African partnerships
East Africa’s foray into the East for development partnerships is being countered by Americans companies that now seek partnerships in the region. During a business-to-business networking forum held in Nairobi on February 26, representatives of 20 American firms met some 70 private sector executives from the five east African partner states to discuss potential partnerships. The American trade delegation, which was on a visit to Kenya and Ethiopia, showed interest in forging partnerships in the areas of communications, transport, road and rail, banking, agri-business, energy, construction, and maritime construction.
East African Business Council (EABC) Chair Vimal Shah, said that the meeting was the result of collaboration agreements between EABC and Corporate Council of Africa (CCA) as part a memorandum of understanding (MoU) signed between the two organisations last year. “Both EABC and CCA recognise the importance of facilitating and promoting private sector development in EAC partner states and the US, advocating for a predictable business climate between the above two regions, advancing private sector priorities and promoting mutually beneficial partnerships,” said Shah.
By the end of the year, he said, it is hoped that between 100 and 150 businesspeople in East Africa will be in contact with counterparts in the US. The problem in East Africa, Shah said, has been capital formation. While it may take two to three years to raise a few billion dollars in Africa, he said that such funds are raised within days in the US. “That is where partnerships can really help,” he said. According to EABC Executive Director Andrew Luzze, the collaboration with CCA focuses on four key areas: an investment treaty, trade facilitation agreement, capacity building, and commercial dialogues.
The commercial dialogues, in turn, are divided into inter-governmental, government-to-private sector and business-to-business dialogues. To this end, the MoU commits the two organisations to work together to advocate for beneficial trade and a good investment climate in the two geographical regions, and to exchange information on business opportunities in both the EAC and US. The two councils will focus on various priority areas including trade facilitation, energy, trade-related infrastructure and market access.
In the services sector the focus will be on ICT, financial services and tourism. In agribusiness the focus will be on regional value chains and value addition, investment, women’s business leadership, capacity building and technical assistance. The two organisations further pledged in the memorandum to participate in each other’s activities and invite each other to fora convened by either party as may be appropriate, subject to availability of resources. Of particular interest, CCA will facilitate and promote US investment in East Africa, and further advocate for good business practices by all US companies operating in the EAC.
CCA president Stephen Hayes who was accompanied by his senior advisor, Katrin Kuhlmann said that his organisation was keen to fulfil its pat of the agreement for improved collaboration between the private sector in East Africa and the US. Ecobank, the KCB Group, Kenya Airways, SGS Kenya and the East African Portland Cement attended the forum. Others included Exim Bank of Tanzania and the Bank of Kigali from Rwanda. Apart from the large corporate firms, a number of smaller ventures from various sectors also participated.
They included firms such as IkapaMedia, Alcare, Optiven Enterprises and Africa Infrastructure Digest of Kenya; Ibra Building Contractors of Tanzania and and Medmasoft of Rwanda. Of all the sectors, however, Luzze said that agro-processing requires particular attention. “This is where 80 per cent of our people depends on. Most of our people are employed in agriculture, so if we are able to complete the value chains within agro-processing, that would be very good. Of course, there are complimentary sectors to agriculture, but the primary sector where we need to focus is agro-processing.”
The American firms expressed frustration at getting local partners with feasible projects and proper systems in place. “As US companies, we cannot take the integrity risk for making business deals that aren’t completely transparent,” said Robert Riegle, senior vice president for business development at Academi, an international security services firm. He added that although his firm was ready to invest substantially in East Africa, he was finding it difficult in identifying firms that have the necessary capability and well-developed project ideas.
“We are going to be very discriminating, and so it’s important how you portray your company and how you give me your proof points on what I should do from an investment point of view. It should be as easy for me as possible, and right now I think that is difficult in East Africa.” The presentation for a possible partnership, he said, needs to be thorough. “I can hear everybody saying what they do and how they do it, but I have not seen a single thing that says, ‘Here’s the past performance that you need to demonstrate that I can do this for you,’ and to put it in a way that I can use it.
I need something that says, “Here are some of the things that we abide by, here are the corporate principles.” Those are the things I am going to take to my board when making a decision, especially when I am making decisions that cost hundreds of millions of dollars.” Evidently, major infrastructure projects, which have in recent years been awarded to Chinese firms at the expense of Western companies, are also attracting interest.
The managing partner of an international maritime firm said he was looking forward to meeting a senior official in the Government in his pursuit to clinch a contract for the Lamu project. Maida Waziri, a Tanzanian contractor, said she had hoped for more direct connecting between specific firms belonging to the same sector to maximize on the short time available. But Kenyan entrepreneur Florence Sugut, a trade fairs specialist, said she made headway and initiated a firm collaboration with a company that deals with the same business in the US. This is in addition to her existing collaboration with a German firm, Fairpros International.
The business networking forum comes in the wake of strained relations between Uganda and Western powers over the passing of an anti-gay Bill that was recently signed into law by President Yoweri Museveni. “Our main role as EABC is to bring out the opportunities and benefits of doing businesss in East Africa. I understand issues of human rights and gay rights have an implication on business, but our role is to promote business and investment in East Africa,” said Luzze.
Apart from the MoU signed with CCA, East Africa’s apex organization for the private sector also has arrangements with the Confederation of Indian Industries, the French government. In a clear indication that partnerships with Western countries are still highly valued, a similar investment forum between East African and Swedish businesses is due to be held in Sweden in May. In collaboration with the EAC Secretariat, EABC will be leading the business delegation to provide an opportunity for businesses to interact and foster partnerships in the areas of infrastructure, agriculture, energy, mining, manufacturing and waste management while selling East Africa as a credible investment destination.
Within East Africa, EABC has been lobbying for greater freedom of movement of capital, services and goods in the region. A board strategy meeting held in January resolved to meet all the region’s heads of state to express the private sector’s concerns on prevailing restrictions to business, with the first meeting likely to be held in March. EABC was also recently involved in trade negotiations between the European Union and the East African Community for a new Economic Partnership Agreement. “We are coming up with an information hub for investors who would like to do business in East Africa, where EABC becomes a one-stop centre,” said Luzze.
http://www.thepeople.co.ke/59013/west-renew-interest-east-african-partnerships/
