EAA Events

APRIL 3RD – 5TH

The Regional Representative visited Kampala, Uganda, and whilst there, met the Deputy British High Commissioner, Representatives from the European Union, the Deputy Counsellor for Political and Economic Affairs at the US embassy, the Executive Director of the Uganda Investment Authority (UIA), the World Bank acting Country Manager/Senior Economist and the German Ambassador.

An EAA members’ breakfast meeting was held after these to brief them on the discussions held and on regional issues of interest and also to obtain feedback on their views on the current business environment in the country.

Concerns were expressed generally about the EA Community (EAC) “not working as it should” as a Common Market to increase cross-border trade and also about the current continuing very unstable situation in South Sudan, once Uganda’s largest export market. Much depends on President Museveni’s efforts to help to broker some form of peace agreement, together with other leaders from neighbouring countries and the international community.

On the domestic front, the mood amongst members of the private sector was “generally more positive” in outlook compared with the past two years, with economic growth of 5.5% forecast for 2018 and a “clearer picture emerging about future oil production and refinery” in the country. Some US$ 15 billion is projected to be expended on the infrastructure required to develop the oil sector, with “around 4 years” perhaps the optimistic timeline for this to be completed, including a heated pipeline through Tanzania through to Tanga.

There are some successful business sectors identified as boosting economic growth, notably financial and professional services, agriculture in general and property development. However, tax collections remain low, from a very narrow base still, and regulations need to be simplified. It was noted that the UIA had established a “One Stop Centre” to promote inward investment and to provide practical help.

APRIL 5TH/6TH

The Regional Representative visited Kigali, Rwanda and, whilst there, met the Deputy UK High Commissioner, Deputy German Chief of Mission, Political Officer at the US Embassy, acting Country Manager/Senior Economist at the World Bank, a representative of the Rwanda Development Board and the CEO of the Private Sector Federation. An EAA members’ meeting was also held.

As a visitor to Kigali, especially after the rather chaotic traffic congestion in Kampala, one cannot fail to be impressed by the sense of order and discipline on the roads in the capital, which means a good number of visits/meetings can be held in one day. Regional issues for this landlocked country are always of special interest to EAA members, as the economic mood domestically remains broadly positive, with a government very keen to encourage private sector investment.

The Continental Free Trade Area (CFTA) treaty was signed by over 40 African countries recently in Kigali under the AU Chairmanship of Rwanda’s President Kagame, with the others (notably South Africa and Nigeria, the two largest economies in sub-Sahara Africa) signing “Declarations of Intent”. The move to eliminate many tariffs and remove non-tariff barriers, notably long delays at borders, across the continent, is to be welcomed although many challenges regarding implementation lie ahead.

APRIL 11TH

The EAA hosted a farewell lunch in London for the outgoing Kenya High Commissioner, HE Lazarus Amayo, who has been promoted to become Kenya’s Ambassador to the UN in New York. The guests included the High Commissioners to the UK from Uganda and Tanzania, the Ethiopian Ambassador, a representative from the UK FCO and the recently-formed Institute for Free Trade, as well as the EAA Chairman and various invited members.

The EAA had established a very strong relationship with HE, who has provided much appreciated support for the Association’s activities during his time in the UK. Hopefully we will be able to build on these with his successor.

APRIL 16TH

The EAA Chairman and CEO attended a private meeting organised on our behalf by the Tanzania High Commissioner to the UK, with the Vice President of Tanzania, who was in the UK to attend the Commonwealth Heads of Government meeting (CHOGM).

Concerns about the current business environment in Tanzania from the private sector were raised and discussed.

APRIL 17TH

The EAA Chairman, CEO and various selected EAA members attended a Kenya Business Forum chaired by HE President Uhuru Kenyatta. At this private gathering, HE provided a very articulate briefing on the current business environment in the country following a period of political uncertainty, which he explained was now over and the government was in a position to focus on development issues, including a number of important infrastructure projects. These included new roads, railways, greater access to electricity, improved communications, healthcare and education reforms and efforts to increase the manufacturing contribution to GDP.

He advised that Kenya had improved in the latest World Bank “Doing Business Report” from 130th to 80th and “the target was to reach 60th by next year and to become the second best in Africa”. In his answers to various questions, many of which came from the EAA representatives, he gave very clear answers and was able to view things very much from a business viewpoint, in particular issues in arbitration under the judicial process, as some important legal reforms had been implemented and many processes had been simplified.

The recently-signed Continental Free Trade Area (CFTA) treaty had seen Kenya, and the President, playing a leading role, being amongst the first to sign. He painted a very positive picture of a stable country with his government keen to attract foreign direct investment in a number of sectors where he believed they could generate positive returns. Having previously visited the London Stock Exchange earlier in the day, he saw particular opportunities in financial services and for Kenya to be seen as a regional hub with well-established sea and air links. He also commented on the current security situation in the country, explaining that the government was working hard with international partners to tackle the threat of terrorism, “not just for Kenya, but the world” and was pleased to advise that tourist numbers “had stood up well and were on the rise”. It was overall a very informative and useful business meeting and one which the EAA will seek to build on in the future.

CHATHAM HOUSE

Later in the afternoon of April 17th, HE President Kenyatta was the guest speaker at Chatham House, where he gave a very eloquent and thoughtful speech to a packed house, that included many representatives from the media.

He focused mainly on the values of democracy, explaining that in Kenya, after two recent elections, this was “maturing”. He explained that his now famous and well-publicised handshake with his main political opponent, Raila Odinga, “was aimed at opening up a new front in Kenya” and that “he had reached out with the sole aim of uniting the country” which had “become divided along party and tribal lines”.

He explained further that “we cannot achieve the social and economic needs of our people in an environment of constant political bickering” and that “political leaders must rise above the noise and focus on an agenda to deliver development and a conducive environment for business”. At the beginning of the Commonwealth Heads of Government Meeting (CHOGM) in London, this was an eloquently-delivered message of hope and aspiration which will have gone down well with his fellow Heads of State who will be attending, as well as the wider international community.

 

The Chief Executive visited Tanzania, Ethiopia and Kenya recently, all of which are facing uncertain political times.

TANZANIA
He met the British High Commissioner in London prior to his departure and then the EU Head of Delegation, Indian High Commissioner, South African deputy High Commissioner, IMF Country Manager, Minister for Industry, Trade & Investment and the Executive Director of the Tanzania Investment Centre (TIC).

The diplomatic community are gravely concerned about the deteriorating political environment, issuing a public notice citing “politically-related violence and intimidation of the opposition in the country”. The opposition leader suffered an armed attack outside his home and is currently recovering in Brussels “with 18 military bullets in his body”.

The country is out of step with other EAC members over the EU Economic Partnership Agreement (EPA), which effectively means this will not be signed any time soon and Kenya, as the only non-LDC in the Community, will continue to receive a special extension to the existing tariff-free quotes.

The private sector is equally concerned about the deteriorating business environment, with harassment by the Revenue Authority and Immigration Department frequently cited. The IMF has reported that “the macroeconomic position in the country is generally stable and broadly in line with targets” but it cites “growing investor concerns over government policies, with some data pointing to weakening economic activity”. It also points out “a challenging business environment and a negative outlook due to an unpredictable policy environment” a view shared by most businesses operating in the country, with many either closing down or downsizing their activities. Tanzania has unfortunately become an increasingly difficult country for foreign investors and appears set to follow a socialist path, attracting a great deal of negative international media attention.

ETHIOPIA
Meetings were held with the British Ambassador, EU Head of Political and Economic Cooperation, World Bank senior economist, the Chairman of the EU-Ethiopian Business Group and the deputy-Commissioner of the Ethiopian Investment Commission (EIC). Further steps in the planning process for a proposed investment mission to the country from October 24th – 28th were also made although this very much depends on how the political situation in the country evolves.

The decision by the Prime Minister to resign had been expected but the timing of it came as something of a surprise. The immediate declaring of another State of Emergency meant that the country was once again facing uncertain political times and an announcement as a replacement was anticipated fairly soon afterwards to calm down the situation, with reports of continued civil unrest in parts of the country. The fact that this did not materialise, and that there was a further meeting of the ruling EPRDF coalition a week later, again with no definitive result, would suggest an internal power struggle is taking place between the different ethnic groups. The country is clearly at a political crossroads as many diplomats believe the State of Emergency declaration, with all its implications, was not really warranted. In many ways it is essentially counter-productive to the government’s stated goals of political reform and more inclusive governance and could further embolden those who believe violence is the best way to achieve fundamental changes to the democratic system. It also negates the national and international goodwill that was generated by the government’s unprecedented release of political prisoners, although they are not recognised as such, and some high profile opposition people who had been detained. There is now serious risk that the impressive achievements of the past could be negated by serious solid upheaval.

Meanwhile, the economy continues to grow impressively, expected to reach around 8% following a recovery in the agricultural sector after last year’s drought. Despite an official devaluation of 15% in October last year, the currency is still thought to seriously over-valued and a severe shortage of foreign exchange continues to be perhaps the main constraint for businesses operating in the country. Assuming it goes ahead, anyone interested in the Investment Mission the EAA is planning to organise and lead to the country from October 24th to 28th should contact either the Association’s UK or Nairobi office.

KENYA
Various meetings were held with members of the diplomatic community by the Regional Representative based in Nairobi prior to the CEO’s visit and the briefing provided to EAA members at a breakfast meeting reflected the uncertain political position the country was facing, with a rather serious stand-off between the President and main opposition leader, Mr Raila Odinga, the main focus of this. The government’s “nuzzling of the media and intimidation of the judiciary” attracted international condemnation, with the prospect of a seriously divided country continuing for some time.

However, just after his departure from the country, possibly due in part to pressure from the US (Secretary of State Rex Tillerson had just visited), reports and pictures of the two adversaries emerged shaking hands and saying they had held secret talks aimed at “ending the dangerous divisions to heal the nation”. Raila’s co-leaders were taken by surprise as they had been unaware such meetings had been taking place (as was the vice-President, apparently) but the agreement effectively sounds the death knell for the NASA opposition coalition of four parties. Hopefully the government can now look ahead and focus on the “Big 4” policies the President has announced, namely boosting manufacturing, enhancing food security, providing universal healthcare and making available more decent affordable housing, all by 2022. Little detail as to how these laudable aims will be funded has been provided. Even before this agreement was announced, the private sector outlook for 2018 is more positive than it was for the previous two years and the macroeconomic situation – apart from a deteriorating debt position – is generally “stable”. A US$ 2 billion bond has been raised on the London market, the IMF have just extended a US$ 1.5 billion standby loan and remittance from the Kenya Diaspora have reached record levels, all signs of growing confidence in the country and its future prospects.

 

FUTURE MEMBERS MEETINGS’ 2018

KENYA - NAIROBI
Wednesday (Breakfast) 31st January
Wednesday (Breakfast) 7th March
Wednesday (Breakfast) 25th April
Wednesday (Breakfast) 6th June
Wednesday (Breakfast) 25th July
Wednesday (Breakfast) 5th September
Wednesday (Breakfast) 24th October (Regional Meeting)
Wednesday (Breakfast) 5th December

UGANDA - KAMPALA
Thursday (Breakfast) 5th April
Wednesday (Breakfast) 17th October

TANZANIA - DAR-ES-SALAAM
Tuesday (Coctails) 27th February
Thursday (Coctails) 20th September

RWANDA - KIGALI
Friday (Lunch) 6th April
Friday (Lunch) 19th October

ETHIOPIA - ADDIS ABABA
Thursday - Sunday (Investment Mission) 25th - 28th October

UK - LONDON - AGM
Tuesday (Lunch) 12th June