Remarks by Dr. Richard Sezibera Ambassador Secretary General, East African Community at the Norfund Annual Conference in Oslo, Norway August 21, 2013

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1 Remarks by Dr. Richard Sezibera Ambassador Secretary General, East African Community at the Norfund Annual Conference in Oslo, Norway August 21, 2013

2 2 Your Royal Highness, the Crown Prince of Norway, Your Excellency, Mr Heikki Holmas, Minister for International Development of Norway, Ms. Vivienne Yeda, Director General, East African Development Bank Mr. Andrew Luze, Executive Director, East African Business Council The Secretary General of the Confederation of Norwegian Enterprise, Distinguished Guests, Ladies and Gentlemen 2

3 3 It is indeed a great honour to meet such distinguished representatives of the Norfund, international investors, policy makers and the development aid community. I wish to thank NORFUND, NABA and the Norwegian Government for their Kind invitation to me to address this annual conference. Thank you for your warm welcome to this beautiful country and for recognizing the East African Community as a desirable Investment destination. My main message today is that trade and investment can spur economic growth and prosperity for the people of Norway and East Africa. We are a region that believes that the World does not owe us a living. That East Africa owes East Africans a living. And that trade, 3

4 4 investments and Partnerships are crucial for pulling our people out of poverty. A growing, prosperous East Africa is good for its people, but it is also good for the people of Norway. East African integration is not a recent phenomenon. Social and economic co-operation among countries of East Africa is not new, having commenced with the construction of the Kenya Uganda Railway in 1897 and the establishment of the Customs Collection Centre in 1900 in Mombasa Kenya. After independence in the 1960s, the leaders then came to the conclusion that a formal mechanism was required to foster and promote the shared interests of their people. The result was the Treaty of the East African Co-operation signed on 6th June

5 5 That first attempt at East African integration faltered in 1977, but has, since 2000, been revived and accelerated, bringing benefits to the five Partner States of Burndi, Kenya,Rwanda, United Republic of Tanzania and Uganda. From the very beginning, Eastern integration was about the Socio economic development of the people of East Africa. Institutions that were designed to finance growth and development have withstood the test of time. I am glad that Ms Viviene Yeda, Director General of the East African Development Bank, an Institution that opened its doors in 1980, graciously accepted my invitation to be part of my delegation here in Oslo. Vivienne, kindly stand for recognition. 5

6 6 As a region we realise that the potential for working with our Member Countries in realising middle level economic status, is now more than ever, within our reach. Today, EADB continues to extend the frontiers of development financing into new products and services. We hope to issue through the Bank the first ever regional medium term note simultaneously in all countries of East Africa. Excellencies, ladies and Gentlemen; Over the last 10 years, our Community has made tremendous achievements that have facilitated socio-economic development in all our Partner States. We have built a Customs Union, are implementing a Common Market, have concluded Ministerial negotiations on a 6

7 7 Monetary Union, and are laying the foundations for a Political Federation of the Countries of East Africa. The people of our region, and especially our Private Sector, are the key drivers of this integration. I am glad that the Executive Director of the East African Business Council, Mr Andrew Luzze, and Ms Joanna Mwangi, representing the East African Women in Business Platform, are here today as part of my delegation. Please stand for recognition. Africa and East Africa in particular, is once again a land of promise and confidence. Indeed, East Africa is among the fastest growing regions in 7

8 8 Sub Saharan Africa and in the World. In the period between 2005 and 2010, per capita income growth in the EAC reached 3.7% a year compared to 3.2% for sub-saharan Africa as a whole1. In the three years between 2010 and 2012, economic growth in East Africa has averaged 6% per annum and is projected to grow at 6.4% in Admittedly, part of this is catching up after many years of sub optimal growth, but it reflects the renewed impetus for economic development within the region. Investor confidence assessed by net direct foreign investment has also been positive. The average net direct foreign investment to the East African Community states rose from USD IMF Working paper no. wp/12/272 page 3 8

9 9 billion in 2010 to USD 3.8 billion in Rates of return for a number of companies operating in different sectors of our economies are as high as 30%. It is important to note that East African growth is in the relatively sophisticated sectors of our economy. Financial services, logistics, tourism, especially high end tourism, construction, ICT, and manufacturing. This shows that our economic fundamentals are sound. With the recent discoveries of hydrocarbons and other natural resources in all countries of our region, this growth can only accelerate. We just need to make sure that it is growth that takes advantage of our demographic dividend, grows jobs and equity. 9

10 10 Since the launch of the Customs Union, and subsequently the Common Market, intra-eac trade has increased from about 2 Billion US Dollars in 2005 to 4 Billion US Dollars in In the EAC, total intra-regional exports increased from around US$500 million in 2000 to more than US$2.36 billion in 2010, a fourfold increase. Intra EAC trade has grown from 10% a few years ago, to an estimated 23% currently, the fastest growth of any region, but still way below European, Asian, and North American standards, showing that this is an area of promise. And Partner States trade value added products among themselves, qualitatively different from trade with the rest of the World, which is mainly of raw commodities. 10

11 11 The EAC Common Market that was launched in 2010 is picking up and Partner States have committed themselves to dealing with all the provisions of the Protocol. In the meantime, we have made good progress on currency convertibility and macro-economic convergence; adoption of common travel documents, work permits and national treatment of students in our Institutions of higher learning, fees, marketing East Africa as a single tourism destination including discussions on a single tourism visa ; harmonization of academic and professional qualifications; free movement of capital and removal of non-tariff barriers to trade, and beyond the border issues in general. 11

12 12 This year, I expect agreement on the functioning of East Africa as a Single Customs Territory. On the Political Federation front, we have seen incremental progress, through our programs in governance, security, defence, and Foreign Policy Coordination. To us as a region, Peace and security are prerequisites to economic and social development. Our East African Legislative Assembly and the East African Court of Justice both represent and protect the fundamental interests and rights of the people of East Africa. 12

13 13 Our region still faces a number of challenges that provide opportunities for you, members of the private sector. These include the need to Industrialize. There are opportunities in Agro processing, pharmaceuticals, the chemical industry, manufacturing, mining, fishing, tourism, ICT and of course oil and gas. A relatively low level of financial deepening, lower levels of domestic savings, high reliance on donor aid, limited physical infrastructure and human capital. The infrastructure deficit is for example estimated at 43 Billion USD per year. There are opportunities in rail, energy we need to double our energy generation from the current 4000 MW to at least 40,000Mw in the next 13

14 14 decade) including renewable energy and green technologies, Enlargement of ports and harbors as well as inland waterways, telecommunications,. Working with the Governments, the African Development Bank, the World Bank, the European Union, and the Private Sector, we are designing an Eat African Development Fund to contribute to meeting this infrastructure gap, including through the mobilization of domestic resources. I invite Norway to be part of this exciting initiative. And now, a few words about women in business. East Africa's economic vibrancy is in large part due to the hard labor and resilience of East African women. If East Africa is the new frontier market, then 14

15 15 surely East African women are the true emerging market. Investing in them is smart economics. It also happens to be smart politics. I am reliably informed that Norway's growth and resilience may be seen as not primarily due to oil or gas or the fishing Industry, but due to the fact the 80% of its women are part of the work force, with knock on effects on family size, educational achievement, and productivity. What is true of Norway will have to be true to East Africa. I welcome the interest of Norwegian Companies in East Africa. The Norwegian Fund, Norway Africa Business Forum, is doing an excellent job. I am glad innovation Norway is opening a center in East Africa. I encourage the Norwegian Sovereign Fund to increase its operations in 15

16 16 all Countries of East Africa, especially in the infrastructure, energy, and infrastructure Sector. I look forward to increased East African investments in the Norwegian Market. I look forward to designing strategies to increase the share of East African two ways Trade with Norway. Our region now enjoys macroeconomic and political stability as well as favourable business environment and strong institutions. The East African Community Partner States are committed towards providing an investment-conducive environment. We are committed to developing Regional value chains, integrated into the global supply chains. 16

17 17 East Africa will have to trade itself out of poverty. A prosperous East Africa is good for its people, and it's good for the global economy. I welcome you to invest in East Africa. You are the generation that should do it, and the time is now. I thank you for your kind attention. 17

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