Business leaders call for faster reforms, deeper investments

The recent closure of manufacturing plants in Uganda and Kenya are a wake-up call for the need to cut red-tape and invest more in energy and transport infrastructure in order to keep the region’s industrial output and jobs alive, the chair of the East African Business Summit said yesterday.

Mr Linus Gitahi said the closure of the BAT tobacco plant in Uganda, as well as Eveready batteries and Cadbury chocolate factories in Kenya are a reminder of the work required to keep businesses in the region competitive.

READ: How Eveready chose to close Nakuru battery plant

“How can we compete with Egypt, where the average cost of electricity is $0.03 per kilowatt hour if our power continues to cost an average between 10 and 13 US cents?” Mr Gitahi asked yesterday at the summit in Kigali, Rwanda.

Mr Gitahi, who is also the chief executive officer of Nation Media Group, acknowledged the investments currently underway in transport and energy infrastructure in the region and said East Africa “is more peaceful, more prosperous, healthier, better educated and more united than it was a decade or two ago”.

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However, many challenges remain, he said, including the need to harmonise tax policies, improve the quality and mobility of labour, and ensure that prosperity is more evenly distributed across East Africa.

Mr Gitahi said: “We must be reminded of one of the great challenges of our times: inequality. How do we ensure that our prosperity is inclusive and lifts all boats? I am reminded of the saying – it must be from Nigeria – that, “the poor can’t sleep because they are hungry and the rich can’t sleep, either, because the poor are awake”. What must we do to ensure that we all get a good night’s sleep – and that no one goes to bed hungry?”

Collective growth

Presidents Paul Kagame of Rwanda and Uhuru Kenyatta of Kenya also noted that the East African Community risks seeing increased levels of inequality among the citizens of the bloc if partner states continue to act and develop unilaterally instead of moving together as a group. They made the remarks during the opening of the two-day summit in Kigali.

“I personally do not believe that Kenya can succeed unless the region in total succeeds. We must partner, we must work together,” President Kenyatta said, warning that many people, especially youths, were not benefitting from the region’s economic growth.

“The majority feel as if they have been left outside the framework of growth. They have not felt the true effects of growth and I think that is partially and equally responsible for the social upheavals we have had on the African continent,” he said.