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Investment Framework: Key Features

EAC Partner States are in agreement about the need for cooperation in order to spearhead investment in the region. To this end, an EAC Model Investment Code was drafted in 2002, while development of an EAC Investment Policy and Strategy is ongoing.

The Investment Code is not a binding legal instrument but rather a model whose features the EAC Partner States may incorporate into their national laws.

Investment Promotion and Private Sector Development as contained in the third EAC Development Strategy (2006-2010) aims to:

  • achieve free movement of people, capital, labour, services and right of establishment and residence;
  • promote balanced and competitive industrial / manufacturing sector in the region;
  • promote participation of the citizenry (civil society, women and private sector) and having them fully aware of the EAC affairs; and
  • strengthen relations with other regional and international organisations.

Other key features of the investment framework include:

 

Duty Drawback Schemes

Drawback of import duties upon materials used exclusively in the production of goods exported to a third country is provided for in the Customs Union Protocol.

 

Duty and VAT Remission Schemes

The Customs Union Protocol provides for duty and VAT remission schemes to support export promotion.

 

Manufacturing-Under-Bond (MUB) Schemes

Within the Customs Union framework, the EAC Partner States may facilitate MUB schemes within their respective territories. Such schemes would allow imported goods to be used for processing or manufacturing.

 

Export Processing Zones (EPZs)

The Customs Union Protocol has spelt out Export Processing Zone Regulations, which are intended to ensure that the EAC Partner States establish EPZs in a uniform fashion and that the implementation process is transparent, accountable, fair and predictable.

To further promote uniformity, the EAC Partner States propose to develop an East African Community Model Export Processing Zones Operational Manual.

Burundi’s Export Processing Zones was established in 1993 as part of the overall effort to encourage Foreign Direct Investments, export diversification and promotion of nontraditional exports.

Kenya inaugurated her Export Processing Zones program in 1990 as part of the Export Development Program. The scheme is managed by a state agency, the Export Processing Zones Authority. www.epzakenya.com

Rwanda legislation provides for free economic zones of three kinds: export-processing zones, single enterprise export-processing zones and free trade zones. www.rwandainvest.com

Tanzania enacted the Export Processing Zones Act in April 2002, which gives the Export Processing Zones Authority the mandate to facilitate and oversee the implementation of the programme throughout the country.

Uganda has gazetted over 1000 hectares of prime industrial land to be developed into fully serviced industrial estates and export processing zones. The Uganda Investment Authority holds the government interest in the proposed project. www.ugandainvest.com

 

Free Ports

The Customs Union Protocol provides for the establishment of free ports within the Community. The functions of these ports include the promotion and facilitation of trade, the provision of facilities such as storage, warehouses and simplified customs procedures, and provisions for the establishment of international supply-chain centres, which would enhance the Community’s international competitiveness.

 

Harmonisation of Duty Exemption Regimes

The EAC Partner States have agreed to harmonise duty exemption schemes and adopt a single list of exemptions, which is to be specified in the customs law of the Community.

Investment in Water and Sanitation services

The provision of water and sanitation services in the EAC Partner States is gradually being privatised.

In Burundi, the Multi-Sectoral Water and Electricity Infrastructure Project aims to increase people’s access to water in peri-urban areas of Bujumbura and improve the quality and reliability of water services in the Bujumbura region.

In Kenya, some of these services have already been privatised, with the Nairobi Water and Sewerage Company currently providing water and sanitation management services in Nairobi. It plans to expand its operations to other cities in the country.

Electrogaz, the Rwanda’s water utility company has managed to increase water provision to many parts of the country.

In Tanzania, the National Water and Sewerage Corporation is in the process of privatising its services.

The National Water and Sewerage Corporation of Uganda is conducting trials with contracted private management of operations in Kampala and Jinja and is in the process of identifying the forms of private-sector involvement.

Investment opportunities exist in the EAC Partner States in the provision of portable water, the provision of garbage and refuse disposal facilities, and the provision of waste treatment facilities in all Partner States.

Investment in Tourism

With East Africa’s steady growth as a tourism destination, world-class tourist facilities are a most urgent need. For the prospective investor, that means one thing: opportunity.

Tourism is an important industry in the EAC countries. Among the principal sources of tourists is the European Union (EU) - in particular Germany, the United Kingdom, Italy and France - and the United States.

All EAC countries are interested in diversifying the sources of tourism and adding new ones such as the countries of East, South and South East Asia and the new members of the EU.

 

Burundi

ProductsOpportunities
  • Cultural heritage & sites - some of the best dance groups and drumming cultures in the world
  • National parks and nature reserves
  • Development of cultural sites - Burundi culture is renowned for its drums
  • Development of hotels

 

Kenya

ProductsOpportunities
  • Animal viewing “the big five”
  • Game hunting
  • The great wildebeest migration
  • Historical sites
  • Warm, sandy beaches
  • Mountain climbing
  • Development of domestic tourism
  • Development of conference tourism, sports tourism, retirement tourism, eco-tourism, cultural tourism and cruise tourism both on the coast and in Lake Victoria
  • Construction of lodges and hotels to cater for the increasing number of tourists

 

Rwanda

ProductsOpportunities
  • Mountain Gorilla Trekking
  • Nyungwe Waterfalls and National Park
  • Akagera National Park
  • Mountain Biking
  • Flora and Fauna
  • Bird Watching
  • Building new high-standard hotels / lodges / guest houses
  • Refurbishing and upgrading the existing hotels, lodges and restaurants in all key tourist destinations
  • Building a modern hotel at Nyanza, where the Nyanza Royal Palace, the seat of the former kings is situated, to cater to tourists who wish to understand the traditional ways of life during pre-colonial Rwanda
  • Creating zoological and botanical gardens in major urban centres such as Kigali, Butare, Ruhengeri and Gisenyi
  • Creating boating and water sports facilities on Lake Kivu
  • Offering training in leisure and hospitality, hotel management, tour guiding, customer service, etc.

 

United Republic of Tanzania

ProductsOpportunities
  • Viewing wild animals in their natural habitat - Ngorongoro Crater, Serengeti National Park, etc.
  • Climbing the highest mountain in Africa - Kilimanjaro
  • Wildlife Safaris
  • Hunting
  • Scuba Diving and other water sports
  • Relaxing on the clean and azure beaches - Zanzibar and Mafia Island
  • Visiting historical sites - Zanzibar and Bagamoyo, and learning about cultures of Tanzania
  • World-class accommodation facilities - hotels, lodges, guesthouses, entertainment and camping facilities. Joint venture opportunities are available in Kilwa, Zanzibar, Mafia, Dar es Salaam, Mwanza, Arusha, Iringa, Kilimanjaro, Selous, Katavi, Saadani, Babati and Bukoba
  • Ecotourism in the Eastern Arc mountain ranges of North Pare, the Usambaras, Uluguru and Udzungwa, and the mangrove forests of the Mtwara, Lindi, Coast and Tanga regions
  • Hotel development and / or campsites in some of the cultural heritage sites such as Bagamoyo, Pangani, Tabora and Kilwa
  • Development of deep-sea fishing, trophy hunting, and, sea and lake cruising
  • Training in tourism activities
  • Tour operations and agency business
  • Investment in man-made tourist attractions like theme parks and gambling resorts
  • Water transport services along the coastal belt strip and inland waterways

 

Uganda

ProductsOpportunities
  • Murchison Falls where the world’s longest river - Nile - explodes
  • The snow-capped Ruwenzori mountains
  • Queen Elizabeth National Park with 100 mammal species and more than 600 bird species
  • Mount Elgon National Park
  • Kibale National Park - home to a remarkable 13 primate species
  • Innovative tour operations and package programmes targeting national, regional and international visitors
  • Cruises on the River Nile
  • Cabin ferry services on Lake Victoria
  • Schools for the hospitality industry
  • High-quality hotel facilities

Investment in Education

Education is a dynamically developing service sector in the region. Opportunities exist in the provision of facilities and training services in primary and secondary schools, polytechnics, technical and tertiary education, and vocational education and training institutions.

With most of the EAC Partner State governments adopting universal education policies, private universities have gained even greater importance, as governments need private options to absorb the significantly large numbers the primary and secondary education systems produce today.

Investment in Oil and Gas

In Burundi, recent seismic and magnetic surveys have indicated that there may be oil under Lake Tanganyika and the Rusizi river plam.

Kenya’s petroleum potential lies in four largish sedimentary basins: Anza, Mandera, Tertiary Rift and Lamu.

In Rwanda, there is hydrocarbon potential existing in North Western Rwanda and deep under Lake Kivu.

In Tanzania, significant gas discoveries have been made on the coastal shores of Songo Songo Island and Mnazi Bay, and commercial exploitation for power generation began in July 2004. Petroleum seismic coverage in the public domain is approximately 52,000 kms, 52% offshore and 48% onshore, including the interior rift basins.

In Uganda, a number of mining companies have taken up licenses in the mining sector. Oil was finally discovered in Western Uganda in 2006 after 17 years of exploration. This discovery is set to boost the country’s economy significantly.

The EAC organises the East African Petroleum Conference after every two years. The last one was held in February 2015. Among resolutions made include the need to develop the Partner States’ petroleum potential by harmonising policies and legal and fiscal regimes pertaining to petroleum exploration.


East African Community
EAC Close
Afrika Mashariki Road
P.O. Box 1096
Arusha
United Republic of Tanzania

Tel: +255 (0)27 216 2100
Fax: +255 (0)27 216 2190
Email: eac@eachq.org