Kampala. Regional manufacturers are planning to establish a fund that will facilitate joint investment in capital intensive and flagship projects.
This was one of the resolutions made during the recent EAC manufacturers’ business summit, and is aimed at discussing the role of manufacturing in deepening the integration and fostering economic growth in the region.
In their Kampala resolution, the industrialists resolved “To effectively utilise the available resources within the region for structural transformation of the manufacturing sector in key value chains, a regional special purpose vehicle (SPVs) should be established.”
They said this will be done drawing lessons from the Maputo Development Corridor, or Air-bus Project in EU.
“The framework should outline each country’s comparative and competitive strength in resources and inputs, and how EAC countries can collaborate and develop such strategic industries to avoid harmful competition,” the resolution noted.
Uganda Investment Authority deputy executive director communications Sheila Mugyenzi said the idea will help sort the issue of access to finance which is still a challenge in the region.
She said: “However, in order to effectively make use of this fund once it is established, the manufacturers should get a specialised assets company to manage this fund especially looking at the most or immediate project to benefit for purposes of equal sharing.”
The secretary general United Nations Conference on Trade and Development, Dr Mukhisa Kituyi, called for sustainable investment in an integrated manner in the region and noted that EAC was the gateway for Africa.
He said the region needs to model itself to the realities of the market otherwise it will be left behind on the global market.
Uganda Manufacturers Association executive director Kigozi Ssebagala said: “The establishment of the SPVs is good but its implementation is still a question”.
The energy sector
Energy, which has a vital input into manufacturing, constituting between 20 to 50 per cent of the cost of production, it was resolved that partner states should take measures to reduce the cost of power.
It was agreed that in order to achieve this, partners states should come up with reforms in the energy/power sector to reduce power lose, permit industries to generate their own power and supply excess to the national greed, and introducing energy efficiency and conservation measures in industries.
To this end, EAC and EABC were tasked to organise a regional conference on “Competitive Energy Supply for Sustainable Growth of Manufacturing in East Africa”.