THE INTERNATIONAL Council of Swedish Industry (NIR) is to undertake a study on new opportunities for exports from East Africa to Sweden and the rest Europe.

The project promises to further bring East Africa closer to their its of establishing an internationally competitive single market and investment area.

The decision is a follow-up to a series of exclusive Swedish-East African Business Development seminars held in Nairobi, Dar es Salaam and Kampala, from April 29-May 6, between 15 Swedish business leaders and over 100 organisations from both public and private sectors in East Africa, during which the two groups agreed on the need to promote the establishment and expansion of business ties between the Nordic country and East Africa. 

"A growing interest in African design, changing distribution patterns in Europe and creative measures to improve East Africa's industrial performance may provide for expansion of exports into new product areas," said the executive director of NIR, Dr Ake Magnusson, the leader of the Swedish delegation. 

The seminars were arranged within the framework of Gateway East Africa, a three-year programme whose objective is to support private sector development in East Africa and to enhance business exchange between East Africa and Sweden.

The visit, the first by Swedish businessmen to the region, comes on the heels of the signing of a partnership agreement between the Swedish Council and the East African Business Council aimed at expanding business and supporting private-sector development the East Africa Community. "The strategy is to take a regional approach to development of East Africa," said Elly Manjale, executive director of the East African Business Council.

The findings of the study are expected to be ready before the end of this year. The newfound partnership between NIR and EABC is however likely to focus on Lake Victoria basin as key priority area the three riparian states have identified for growth and development. "The potential of the lake has been identified in the areas of fishery, agriculture, tourism, water supply, transport hydropower generation," said Hirji Shah, a director at steelmaker, Mabati Rolling Mills, "In all these sectors, significant opportunities for investment exist for both the local and international entrepreneurs."

Said Mr Shah, who is also the chairman of EABC's management committee: "Gateway East Africa is a platform where companies can develop their businesses. We are creating opportunities for people to take advantage of and we expect more Swedish companies to set up shop in East Africa." 

According to NIR senior vice president Richard Olsson, consumer behaviour is undergoing a radical change in Europe, especially among the most significant segment of consumers – the youth. "For example, there is a new trend in coffee drinking among the youth 15 years ago, the youth met to drink beer. But now they meet to drink coffee. There is therefore an opportunity to develop coffee exports. We can also set up joint-ventures that would work towards adding value to suit European tastes, image, packaging and brand."

Already, a number of Swedish firms including Erikson, Scania and Alfa Laval, all of which participated in the seminar, are operating in East Africa, with fairly significant market shares in their respective market segments. 

The participating East African organisations were Mabati Rolling Mills, Tetra Pak, Suera Flowers as well as the three countries' Chambers of Commerce, private sector associations and various government ministries. 

Whereas intra-regional trade between the three East African Community members has grown significantly in the past four years/ especially after the signing of EAC treaty in November 1999, the EU remains the single largest market for the three countries' exports, accounting for 40 per cent of total exports from the region. The imports are also diversified, with about 25 per cent coming from the EU and 20 per cent coming from Asia and the Middle East.

Coincidentally, the new deal comes in the wake of enlargement of the EU which on May 1, admitted 10 new countries, increasing membership from 15 to 25 further opening the market for goods from East Africa – from Baltic across continental Europe to the Mediterranean – with a combined population of 450 million. Kenya, Uganda and Tanzania are expected to benefit from improved access to the new market created by the new EU members, said the EU Trade Commissioner, Pascal Lamy. 

According Mr Lamy, Exports from East Africa will now deal with single set of rules , single customs tariffs (which in the new 10 EU member-states will come down from 9 per cent to 4 per cent) and a single set of administration procedures for all the 25 EU countries. 

At present the regions principal exports are predominantly agricultural products. They include, horticulture, tea coffee, cotton, tobacco, pyrethrum fish and hides and skins. The imports are machinery and other capital equipment, industrial raw materials, motor vehicles. 

The major trading partners remain the European Union countries, including Sweden, but in recent times there has been a significant rise in exports to the Asian and Middle East destinations of Japan, China, India, United Arab Emirates and Saudi Arabia.
 

 Comments\Views about this article