1. AN OVERVIEW OF THE EAST AFRICAN COMMUNITY AND THE
COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA
(COMESA)
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This document is for informational and discussion purposes and is provided to the recipient on a
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consent. This document is neither an offer nor solicitation to invest in any region, country, company or
individual. Such offer and solicitation may only be made through a separate agreement and subject to
specific terms.
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3. EAST AFRICA COMMUNITY OVERVIEW
Introduction
The East African Community (EAC) is the regional intergovernmental organization of the Republics of
Burundi, Kenya, Rwanda, Tanzania and Uganda, with its headquarters in Arusha, Tanzania. The Treaty
for Establishment of the East African Community was signed on 30th November 1999 and entered into
force on 7th July 2000 following its ratification by the Original 3 Partner States – Kenya, Uganda and
Tanzania. The Republic of Rwanda and the Republic of Burundi acceded to the EAC Treaty on 18th June
2007 and became full Members of the Community with effect from 1st July 2007.
Aims and Objectives
The EAC aims at widening and deepening co-operation among the Partner States in political, economic
and social fields for their mutual benefit. To this extent, the EAC countries established a Customs Union
in 2005 and are working towards the establishment of a Common Market by 2010, a Monetary Union by
2012 and ultimately a Political Federation of the East African States.
Region and People
The Community has a combined population of 125 million, land area of 1.85 million sq kilometers and a
combined GDP of $ 44 billion.
Some of the key highlights of the region are that:
•The world’s fastest reforming region in terms of business regulation.
•Major Advancements in the Information Technology sector with high adoption of mobile telephony
and the setting up of national and international fibre optic networks.
•Fast developing financial services sector with adoption of mobile wallet technologies.
• Simplified investment procedures and one stop centre facility provided by national investment
promotion agencies.
• Generous incentives offered to foreign investors in a number of the countries.
• Vibrant and upcoming capital and securities market.
• High level of intra regional trade and cross-border investments.
• Numerous investment opportunities traversing all economic sectors.
• Abundant and youthful labor force – educated, trained, mobile, skilled and enterprising.
• English is widely spoken. Rwanda and Burundi are bilingual (French & English).
• Insurance against non commercial risk by Multilateral Investment Guarantee Agency (MIGA) and Africa
Trade Insurance Agency (ATIA).
• Sanctity of private property guaranteed on national constitutions.
• Stable political environment and high level of governance and democracy.
• Consumer loyalty to large and quality brands
• Cordial hospitality and warmth of the people.
•Fast growing middle class in all the 5 states forming a base for huge consumption of goods and
services.
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4. SOME ECONOMIC SECTOR DEVELOPMENTS
Financial Services
The partner States are harmonizing their banking acts which will lead to harmonization and eventually
integration of their financial systems
Investment potential exists in establishing commercial banks as well as other services like brokerage,
investment consultations, asset valuation & sales and bank assurance, asset management, real-estate
financing, lease finance, agricultural finance and advisory services. The rapid growth of the informal
sector offers opportunities in the provision of credit and related service. Demand for insurance services
has also risen.
Oil and gas
In Burundi, recent seismic and magnetic surveys have indicated that there may be oil under Lake
Tanganyika and the Rusizi river.
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 facilitated the East African Petroleum Conference in 2005 & 2007. Among resolutions made
include the need to develop the Partner States’ petroleum potential by harmonizing policies and legal
and fiscal regimes pertaining to petroleum exploration.
Mining
The EAC countries are richly endowed with a variety of mineral resources.
Burundi is well endowed with deposits of nickel, vanadium, cassiterite, colombo-tantalite, gold,
uranium, rare earth oxides, peat, cobalt, copper, platinum, hydropower, niobium, tantalum, gold, tin,
tungsten, kaolin and limestone.
Kenya has four belts of minerals —the gold green stone belt in western Kenya, which extends to
Tanzania; the Mozambique belt passing through central Kenya, the source of Kenya ’s unique
gemstones; the Rift belt, which has a variety of resources including soda ash, fluorspar and diatomite;
and the coastal belt, which has titanium.
Rwanda has deposits of Cassiterite, a tin ore, which is a very important ingredient of electronics’
components. The mineral is also found in Walikale, in DRC’s Northern Kivu Province, a part that borders
Rwanda in the east. Other potentially profitable minerals include Wolframite, Columbite-tentalite,
Amblygonite and Tantalite (Colttan). Gold has also been explored in some parts of the country. Some
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5. semiprecious stones including tourmaline, topaz, corundum, chiastolite, amethyst, opal and agate have
been discovered.
Tanzania has a wide variety of minerals, including diamonds, gold, base metals, gemstones (including
the unique Tanzanite) and a variety of industrial minerals such as phosphates, mica, gypsum, limestone,
graphite, quartz and vermiculite, that have a wide range of applications in ceramics, pottery, brick and
tile making, and glass manufacture, nickel, cobalt, copper, diamonds, gemstones, apatite, niobium, iron
ore and coal.
Uganda also has a variety of mineral resources, including copper, cobalt, tin, iron ore, tungsten,
beryllium, limestone, phosphates, salt, clays, feldspar, diatomite, silica sand, glass, sand gravel, and
construction materials such as granites and gneisses.
Investment opportunities exist in mining stone for the construction and building industry, phosphates
for agriculture, salt for domestic and chemical uses, iron ore for the iron and steel industry, kaolin for
leather tanning and pharmaceuticals, and silica sand and trona for glass manufacture, exploration and
development of mineral deposits including oil, gold, copper, cobalt sulphide and hematite iron.
Other areas of opportunity include tourism, agriculture, infrastructure development, real estate, energy
and manufacturing sectors.
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6. COMESA REGION OVERVIEW
What is COMESA?
The Common Market for Eastern and Southern Africa (COMESA) is a Regional Economic Community
(REC). It is the largest African economic block comprising a total of nineteen countries, a population of
over 430 million, and a combined current GDP of over USD 447 billion. Having successfully launched its
Custom Union in 2009, COMESA continues on the road of regional integration by supporting the
continual creation of better investment conditions, making it an increasingly internationally competitive
economic community.
COMESA’s 19 Member States include: Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt,
Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland,
Uganda, Zambia, and Zimbabwe.
Purpose
COMESA’s Vision is to “be a fully integrated, internationally competitive regional economic community
with high standards of living for all its people, ready to merge into an African Economic Community”
Achievements
• Establishment of the COMESA Free Trade Area (FTA) in 2000. Fourteen COMESA Member-States are
members of the FTA.
• Launch of the COMESA Customs Union in 2009.
Future
• Launch of the COMESA Common Market by 2014.
• Launch of the Monetary Union by 2018.
COMESA – the Business Destination
COMESA is Africa’s largest economic community, comprising 19 Member Countries stretching from the
north to the south of the continent. Plentiful natural resources, a constantly growing population, an
emerging middle class in need of new products, an increasingly aspirational youth and growing stability
make it a vibrant economic community.
The ideologies of the countries in COMESA are aligned: every state wants to move into capitalist market
economies. This has helped the economic development of the region, which has seen a sharp increase in
cross-border and foreign investments in the last decade, particularly from ‘newcomers’ such as Brazil,
China and India.
With a collective GDP of more than USD 440 billion, COMESA provides many opportunities for
investment in various fields, particularly logistics, tourism, energy, infrastructure and mining.
Investments in COMESA countries are not restricted to resources: value addition is equally on the rise.
The region has become especially interesting for investors because of its high rate of return, which has
stood at a staggering 29% since the 1990s, as opposed to the EU’s 10%.
Until the financial crash in 2008, COMESA states’ GDP increased by 7% a year, as a result of stable
macroeconomic environments, and liberalized capital accounts and markets.
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