Africa Economy: East Africa mulls fund for private sector to boost integration

East African countries plan to establish a 20 million U.S. dollar fund to help boost the participation of the private sector in the ongoing market integration.

East Africa Community (EAC) Secretary General Richard Sezibera said in Nairobi the Private Sector Fund will be launched by the regional economic bloc's heads of state at their summit in November.

"The Treaty for the Establishment of the EAC states that the integration process will be people-driven with the private sector as the engine of economic growth. The private sector will with the establishment of the fund play an even more important role in the integration as the drivers of economic growth," Sezibera said late Wednesday.

He said contributions of the proposed fund to be set up in close collaboration with the private sector will be voluntary and will be in various categories depending on the contributor's choice.

Sezibera said private sector firms from all the five EAC Partner States were expected to make contributions to the fund between May and October, adding that the EAC was working in close collaboration with the East African Business Council (EABC) on the initiative.

Sezibera was speaking after the first meeting on the establishment of the EAC-Private Sector Fund said the EAC was engaging the private sector to see how the latter could be more actively involved in regional projects and programmes in agriculture, infrastructure, and water and sanitation among other sectors.

"Today's meeting which is the first in a series of many to come sought to address issues that affect the private sector in the region, come, to agree on a work plan and move forward on outstanding issues," he added.

The objectives of the Private Sector Fund are fourfold: to fast- track the implementation of EAC private sector driven interventions; to increase the private sector's ownership of the integration process; provide a framework for private sector intervention, and; to broaden the EAC resource base.

"Quite a number of companies from various sectors were represented here - bankers, manufacturers, telecoms, brewers. They will be contributing at various levels, for instance, platinum or gold," said Sezibera.

He said the fund would be administered by a steering committee which would include private sector representatives. The fund will be run as an entity separate and independent from the EAC.

EABC Chairman Felix Mosha described the idea of establishing the fund as historic.

"The private sector in East Africa is the principal beneficiary of an integrated East Africa. EABC supports this initiative which will complement the efforts Partner States' governments in driving forward the integration process," said Mosha.

Mosha said that the EAC Secretariat was highly dependent on donor funding to run its programmes, adding that the private sector should provide support for some of the Community's activities.

"The fund is intended to complement the EAC's efforts activities which are not adequately funded like the Single Customs Territory, and the harmonization of tax regimes and labor conditions," Mosha said.

He said the fund would have a steering committee consisting of private sector representatives to instill a degree of confidence in the administration of the fund and for purposes of accountability.

"The fund will not be run as a part of the EAC budget. It will be run, monitored and administered separately by a steering committee comprising the private sector and other relevant stakeholders," he said. Endi