Uganda to start Diaspora Investment Fund to boost industrialization
Ministers of Industry from the 19 member states of the Common Market for Eastern and Southern Africa (COMESA) have unanimously approved a COMESA industrial strategy with emphasis on local content as the stimulus for industrial growth in the region.
One key pillar in the strategy is promoting the use of diaspora resources and promoting local content and sourcing.
The ministers approsed the strategy at a COMESA meeting of ministers of industry in Lusaka, Zambia on Friday September 8, 2017 under the theme “Inclusive and Sustainable Industrialization”.
Speaking at the end of the meeting, Uganda’s trade and industry minister Amelia Kyambadde said in implementing the COMESA industrial strategy, Uganda will benefit from the support from COMESA institutions and sharing experiences with states that have moved ahead in industrialization such as Mauritius and Ethiopia.
Kyambadde says the idea of setting up a diaspora investment fund will help Uganda to tap into the diaspora funds for industrialization.
“We have so many Ugandans living in the diaspora who send money back home. Such monies can be tapped into to invest in starting up industries instead of building arcades and shopping malls,” explained Kyambadde.
COMESA members were urged to effectively involve the African diaspora in the industrialization drive by developing a comprehensive diaspora policy to enhance diaspora involvement in the region’s industrialization drive by taking advantage of investment capital, skills and technology. Member states were also urged to develop and operationalize a diaspora investment fund and other financial instruments.
Minister Kyambadde said apart from engaging the diaaspora, government will expedite the pending legal framework like the Competition Bill, Trade in Services Bill and the Local Content Bill to provide a conducive environment for industrialization, in addition to increased support to the private sector, the development of industrial parks and special economic zones.
While opening the meeting, Minister of Commerce, Trade and Industry of Zambia Margaret Mwanakatwe underscored the transformative role of industrialization in employment creation, poverty reduction and enhanced regional trade. She noted that despite the tremendous potential in the member states, the share of manufacturing value added in the COMESA region is still far below other economic blocks, such as the Association of South East Asian Nations (ASEAN) and the European Union (EU). Mwanakwate stressed the importance of political will and inclusiveness in implementing successful industrialization.
The Acting Secretary General of COMESA Ambassador Dr. Kipyego Cheluget noted that despite the economic growth, there has been little wealth creation and transformation in the region.
“Intra-COMESA trade remains very low while the region’s import bill has been rising. The African continent is still primarily exporting low value unfinished commodities which tantamount to Africa exporting much needed jobs and income”, lamented Dr. Cheluget.
Dr. Cheluget called for effective collaboration with key stakeholders, if the drive to industrialization is to succeed. Additionally, the necessity of full political commitment and leadership is imperative in implementing COMESA’s Industrial agenda.
The COMESA industrial strategy is built on eight pillars which are considered to be the industrialization enablers that are cardinal to facilitating manufacturing.
These include; Industrial development supportive Infrastructure, enabling legal, regulatory and institutional business environment; Access to adequate and affordable finances; Standardization, quality assurance and quality management systems; Establishing Industrial Parks (Special Economic Zones, Multi Facility Economic Zones, Industrial Clusters); Supportive Science, Technology and Innovation (STI) Policies; Promoting the use of Diaspora resources and Promoting local content and sourcing.
The strategy also sets out to promote self sustained and balanced growth, increase the availability of industrial goods and services for intra common market and improve the competitiveness of the Industrial sector and develop industrialists to acquire ownership and management of industries.
The COMESA Industrial Strategy puts emphasis on Local Content as a recipe for Industrialization with a view that local content laws ensure local domestic underpinning of the economy. It supports local economic development through: the procurement of goods and services, employment and skills development and Corporate Social Responsibility.
Thus members have been encouraged to develop an all-encompassing legal framework to guide local content policy and strategy development. The framework should build upon existing initiatives and be based on realities in each member and be completed within 6 months.
The COMESA Secretariat was also directed to conduct periodic audits of local content development and implementation to ensure consistency and equity in associated beneficiation of local content at member state and regional levels. This should begin immediately with baseline audits in all member states.