EAC countries asked to enact laws on Foreign Direct Investments

East African countries have been advised to formulate a legislation through which Foreign Direct Investments (FDIs) into the region can be regulated and monitored.The legislation should make sure that a region doesn't receive FDIs from a country or investment hub where EAC has a direct market.

The moment FDI's are allowed from such areas, countries that are trading directly with EAC will benefit even more by taking advantage of the existing trade relations to abuse ways through which investments come into the country.

The call was made by the Chairperson and member of the Committee of Trade investments and Communication in the East African Legislative Assembly (EALA), Mukasa Mbidde.

Jane-Nalunga-Country-director-SEATINI-Hon-Mukasa-Mbidde

He was on Friday officiating at a closure of a two day regional meeting on Making Investments Work for the People, organized by the Southern and Eastern Africa Trade, Information and Negotiations Institute (SEATINI),at Lake Victoria Hotel, Entebbe.

The meeting was aimed at enhancing stakeholders' awareness and capacity to understand and appreciate the importance of investment policies and practices that are gender sensitive; protect human rights; protect the environment and address development needs of the EAC region.

Mbidde explained that countries where FDIs are coming from are facing challenges like the lack of land for investments, for some, trading quotas have been closed and are now looking out for areas with enough land which they can get for free despite the fact that such land should carry a price.

Therefore when they come to EAC countries like Uganda, instead of Uganda being a stopover for economic development, it becomes a roundabout because investors again create their own quotas, creating another challenge that comes with FDIs, added Mbidde.

He added that the problem has been made worse with the fact that the region lacks a compounding policy on wage labor innovation and investment.

Mbidde observed that when a foreigner sets up in the region, he becomes the managing director, appoints a relative as general manager, the wife becomes the cashier while the supervisor is also from his country of origin.

"It's upon EAC to come up with this legislation that looks at how FDIs come in, are set ,what kind of jobs are they creating, where and how the capital (money) comes in and goes out instead of waiting for them to flourish and then you start to regulate ," he added.

Jane Nalunga from SEATINI Uganda explained that Investment, whether domestic or foreign can address challenges of poverty, unemployment, low levels of technology and skills development and under development.

She however added that much as the region is a destination for investors, it still faces challenges of massive unemployment, low incomes, and low level of industrial development, low level of technology and skills transfer and general under development.

"We have realized that investment are not really working for the people .There is no correspondence in terms of increased jobs created, increase in industries, and no skills development, no technology transfer, so we wanted to discuss what is happening and how do we make investments work not only for Uganda but for the entire EAC region," said Nalunga.

Areas for investment in the region include infrastructure, manufacturing, energy, minerals and extractives, agriculture, water and forest resources.

Currently, the region has registered world FDI flows of up to US$ 7 billion in 2014.