How the diaspora can boost East African trade

Arusha. The East African Community (EAC) is setting up a Diaspora Desk to facilitate investments and trade in the region.

The inflow of funds from the diaspora contributed largely to the bloc’s FDI which stood at $8.2 billion as of last year, making the bloc to chart out a Diaspora Engagement Strategy. The move, if realised will facilitate East Africans living in the diaspora to invest and trade in the region, said the EAC secretary general Peter Mathuki.

He was speaking early this week during the 17th Annual Trade and Investment Conference organized by the East African Chamber of Commerce (EACC).

The meeting held in Irving, Texas in the US attracted hundreds of East Africans residing in the US and East African-focused investors.

They converged to explore areas of investments and deliberate on solutions to overcome investment and trade challenges.

During the meeting, the diaspora community highlighted a lack of trust in local financial institutions as one of the challenges deterring investments from abroad.

That is despite the existing investment opportunities in the region in agribusiness, which is the backbone of the bloc’s economy, employing over 80 percent of the labour force.

The agricultural value chain in the EAC includes large-scale commercial farming, agro-processing, value addition in agriculture, livestock, fisheries and forestry products.

Dr Mathuki responded by urging them to establish financial institutions such as an EAC diaspora bank where they would be able to access credit and transact business,

The Community chief shared that the diaspora community will also be incorporated in EAC signature events, such as Pre-Summit retreats which will offer them an opportunity to engage with EAC Heads of State, ministers and the regional business community.

Nevertheless, he urged the diaspora community to take advantage of EAC’s online investment guide portal (https://www.eac.int/investment-guide), which highlights investment procedures which include incentives and opportunities, increases transparency on access to relevant information required by investors.

“The EAC Trade Information Portal also 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 added.

Dr Mathuki noted that the diaspora community has a huge role to play. The EAC recognises the role of diaspora remittance which, according to him, continues to outpace Foreign Direct Investment (FDIs) to become the largest source of external financing.

The inflow of funds from the diaspora has been on an upward trajectory in recent years. For instance; in 2021, the Kenyan diaspora remittance stood at $3.718 billion, while remittances from Uganda stood at $599.3 million.

The inflow of funds from the Tanzania diaspora stood at $569.5 million while Rwanda diaspora remitted $246 million.

“The inflow of funds from the diaspora contributed largely to the EAC’s FDI which stood at $8.2 billion- a 35 percent growth.

The remittances helped the region’s economy withstand the devastating economic impact of Covid-19 and the trickle-down effect of the Russia-Ukraine conflict, he said.

Dr Mathuki noted that the time taken to register a business had reduced significantly and the establishment of One Stop Centres for business registration had further eased the process.The EA region also has huge investment opportunities in energy, mining and gas which, Dr. Mathuki said, had not yet been fully explored.

In her remarks, the EACC Chair, Ms Elsa Juko McDowell noted that the diaspora community was keen and ready to invest in the region.

“We are committed to continuing collaborating in supporting the USA - East Africa trade relations, promoting trade missions and cooperation and marketing East Africa as a trade and investment destination,” she pointed out.