Economists in the region are advocating for innovative thinking as a mechanism to jumpstart African integration, something that has been proving to be elusive for long.

Speaking during the plenary session of the building bridges East Africa regional workshop on developing national business communities and regional integration organised by UONGOZI Institute in Dar es Salaam, a World Bank consultant, Mr John Kalisa said that currently the business community was facing many hurdles.

“Increasingly due to fluctuations in foreign exchange rates with the US Dollar, the East African business community is losing out a lot because of the exchange rates with doing business and only innovative ways are the answer,” he said.

Mr Kalisa cited that the cost of doing business in most regions of the continent are very high due to these exchange rates and therefore Rwanda and Kenya are in dialogue such that their business community can use their own currencies in the other country.

He said as China continues to be an aggressive investor in the region, a number of countries in the EAC are laying out mechanisms such that they can directly exchange their currencies into the yuan instead of first changing into US dollar.

“For regional integration on a continent as diverse as Africa, the way forward is to expand market size through market integration, collaborate in building productive and industrial capacity and develop affordable, effective infrastructure and services to lower the cost of doing business,” he cited.

A fellow of the London School of Economics Department of International Development, Dr Hazel Gray, said African multinational companies dealing largely in services and manufacturing are on the rise where foreign direct investments have been rising from 5 per cent in 2005 to 13 per cent to date.

Dr Gray said African multinational companies are now the fastest growing in the world and that they need to nationalise to make a positive impact to development but there is need for policies that will enable them to operate across borders.

“For costs of doing business to be reduced, there is need to broaden policy perspective on what it means to be successful in regional integration and focusing on factors that enhance competitiveness, namely innovation, skills and labour market policies,” she said.

The Research on Poverty alleviation (REPOA) Executive Director, Prof Samuel Wangwe said that taking into account that protocols have been signed and the talk of economic integration has been raging for decades, there was a need to conduct an extensive research to find out why the implementation was so slow.

“We are aware that challenges still exist and that is why through this meeting we feel there is need to join hands with all parties like the East African Business Council and help push this integration agenda forward,” he said.

A renowned policy drafter and Kenya Senate, Prof Peter Nyong’o said that he feels that legislation harmonisation is paramount for economic integration to be complete.

Prof Nyong’o said that regional integration has for many years been an exclusively inter-state affair and that there were no logical or economic imperatives for businesses to lobby for regional integration as well as no strong national business interests in individual member states to push for regional integration.

He said that today the liberalisation of the economy has brought to the forefront the private sector in both policy and economy and that there is recognition of the potential of the role of the private sector in both regional trade and investment scheme projects.

A University of Cape Town visiting professor of the Graduate School of Development Policy and Practice, Prof Thandika Mkandawire said that unless we can measure what we want to change, there is no way of knowing that we are changing thus calling for the need to establish what the impediments are and set the bar high.

Prof Mkandawire said that there is need to build a community of intellectuals who can speak freely, commit to driving change, develop this collective mirror that Africa decision makers can hold up to everywhere.

Source: All Africa

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