Posted on :Thursday , 1st December 2022
The inflow of funds from the diaspora contributed significantly to the bloc's FDI, which stood at $8.2 billion as of last year, prompting the bloc to develop a Diaspora Engagement Strategy. The move, if implemented, will make it easier for East Africans living in the diaspora to invest and trade in the region, according to EAC Secretary General Peter Mathuki.
He was speaking at the East African Chamber of Commerce's 17th Annual Trade and Investment Conference (EACC).
The meeting, held in Irving, Texas, attracted hundreds of East Africans living in the United States as well as East African-focused investors.
They met to discuss investment opportunities and solutions to investment and trade challenges.
During the meeting, the diaspora community cited a lack of trust in local financial institutions as one of the barriers to foreign investment.
This is despite the region's existing investment opportunities in agribusiness, which is the backbone of the bloc's economy, employing more than 80% of the labour force.
Large-scale commercial farming, agro-processing, value addition in agriculture, livestock, fisheries, and forestry products are all part of the EAC's agricultural value chain.
Dr. Mathuki responded by urging them to establish financial institutions, such as an EAC diaspora bank, through which they could access credit and conduct business.
The Community chief stated that the diaspora community will be included in EAC signature events such as Pre-Summit retreats, which will allow them to interact with EAC Heads of State, ministers, and the regional business community.
Nonetheless, he urged the diaspora to use the EAC's online investment guide portal (https://www.eac.int/investment-guide), which highlights investment procedures, including incentives and opportunities, and increases transparency on access to relevant information required by investors.
"In addition, the EAC Trade Information Portal provides a step-by-step guide on licenses, pre-clearance permits, and clearance formalities for the most traded goods within, to and from the EAC," he said.
Dr. Mathuki stated that the diaspora community plays an important role. The EAC recognises the role of diaspora remittances, which continue to outpace Foreign Direct Investment (FDIs) to become the largest source of external financing, according to him.
The inflow of funds from the diaspora has been increasing in recent years. For example, in 2021, Kenyan diaspora remittances were $3.718 billion, while Ugandan remittances were $599.3 million.The Tanzania diaspora contributed $569.5 million, while the Rwanda diaspora contributed $246 million.
"The inflow of funds from the diaspora contributed significantly to the EAC's FDI, which stood at $8.2 billion, representing a 35% increase."
According to him, the remittances helped the region's economy withstand the devastating economic impacts.
Dr. Mathuki observed that the time required to register a business had decreased significantly, and the establishment of One Stop Centres for business registration had made the process even easier.
Dr. Mathuki also stated that the EA region has significant investment opportunities in energy, mining, and gas that have yet to be fully explored.
Ms Elsa Juko McDowell, Chair of the EACC, stated in her remarks that the diaspora community was eager and ready to invest in the region.
"We are committed to continuing to collaborate in supporting the United States-East Africa trade relations, promoting trade missions and cooperation, and marketing East Africa as a trade and investment destination," she said.