Donors chip in to help private sector access EAC market
Tuesday, 27 July 2010
The private sector will find it much easier to expand into the rest of the East Africa as more donors step in to finance training projects that will help investors overcome trade constraints.
On Friday, the African Capacity Building Foundation (ACBF) became the latest donor backed entity to sign a pact with the region’s private sector in an agreement which seeks to unlock Sh147 million ($1.8 million) to deepen participation in the region’s economy.
"This is in recognition of the enormous role that lies ahead in terms of influencing the development of private sector policies and engaging with the political leadership within the East Africa region," said Dr Frannie Léautier, the ACBF Executive Secretary.
The East Africa common market -- which allows for free movement of goods and services across the five member states in a market of 126 million people -- took effect on July 1.
The ACBF funding which was extended to the private sector through the East African Business Council comes just weeks after the East Africa Community (EAC) launched a Common Market to ease movement of capital, labour, goods and services early this month.
In recent months, similar projects have been funded by Germany which signed a deal with the EAC secretariat late last year to disburse a grant worth Sh1.5 billion to the region over the next two years.
British Department of International Development (DFID) and the United States Agency for International Development are also involved in funding various capacity building programmes.
The increased donor funding comes at a time that the recently launched common market has placed a heavier demand on the private sector to produce quality goods and services in bigger volumes for a combined population of 126 million people.
However, most local producers, especially SMEs, have complained of capacity challenges in cross border trade
Under the ACBF project, entitled, "Deepening Private Sector Participation in East Africa’s Economic Integration" the private sector is seeking a central place in what has generally been regarded as governments-driven project.
"The East Africa Treaty views private sector development as critical for the success of the integration process in Eastern Africa," said Dr Léautier
The East Africa Community Private Sector Development Strategy provides an incentive framework for facilitating and promoting private sector development.
"Donor support is necessary to empower the private sector to play the rightful role envisaged by the EAC Treaty," said Mr Alloys Mutabingwa, the EAC Deputy Secretary General in charge of planning and infrastructure.
Mr Faustin Mbundu, the EABC chairman said the grant will make it possible for the private sector to develop both human and institutional capacities over the next four years.
ACBF was established in February 1991 as an outcome of collaborative efforts between African governments and the international donor community with the aim of building human and institutional capacity to support sustainable growth, poverty reduction and good governance in Africa.
