EAC leaders push for mega deals amidst concerns of limited funds, slow integration progress
Kampala, Uganda | JULIUS BUSINGE | Amidst big talk on how to raise over US$78 billion for regional infrastructure projects, Tanzania’s President John Pombe Magufuli Magufuli had tough questions for the East African Community Council of Ministers.
“I am sorry I am harsh but why did the Secretary-General not tell us why they only implemented 14 out of the 200 projects earmarked in 2014?” Magufuli asked at the recently concluded 19th ordinary summit of the East African Community Heads of State at Speke Resort Munyonyo, a Kampala suburb.
His question also echoed concerns the East African Community Integration process has been too slow. Political will from frontline Presidents to implement initiatives of the integration process; the appetite to spend on big infrastructure projects to connect the region and ease the cost of doing business and how to fund the planned projects appeared the central issues at the meeting.
This year’s retreat was the 4th on Infrastructure Development and Financing and it aimed at reviewing progress on the implementation of the priority projects agreed upon in the 3rd Retreat held in November 2014. It also served as the 1st Retreat on Health Sector Financing and Development.
Apart from current EAC Chairman and host President Museveni, Kenya’s Uhuru Kenyatta, South Sudan’s Salva Kiir, Magufuli, First Vice President of the Republic of Burundi, Gaston Sindimwo attended the meeting. Rwanda’s Minister of Infrastructure, James Musoni, represented President Paul Kagame.
The meeting was organized under the theme ‘Enhancing Socio-Economic Development for Deeper Integration of the Community.’
The Presidents plan to complete 286 infrastructure projects intended to link the region and promote trade by 2025. The projects would entail upgrading 7,600km of roads; lay the 4,000km Standard Gauge Railway, and increase the combined installed capacity of electrical power generation from 4245MW to 6734MW.
They also plan to construct 3,000km of the oil pipeline and an oil refinery, and improve efficiencies at the Mombasa and Dar-es-Salaam ports. In the health sector, they plan to set up a regional centre of excellence for higher medical education and research supported by the African Development Bank (ADB). In the region, only Kenya has completed its first phase of the Mombasa-Nairobi SGR line, which Museveni said has reduced the cost of transport.
These and more projects are expected to cost up to US$78 billion. Of that amount, US$62 billion would be used on railways, roads and energy projects in a bid to ease transportation and boost manufacturing sectors. Out of the planned expenditure, only 6% (US$5 billion) has been committed by the donor community including the World Bank, Africa Development Bank, TradeMark East Africa and the European Union.
In their submissions, the Presidents appeared divided on the source of financing for these huge projects. They hinted on issuing infrastructure bonds as one avenue of raising the money but no further details were shared on this. Museveni supported the idea of issuing infrastructure bonds.
The other related avenue of bolstering the health sector would be for drug manufacturers to set up shops in the region, said President Museveni.
On his part, Kenya’s Kenyatta appeared to vouch for Public Private Partnerships (PPPs) as the way to finance the region’s projects.
But Museveni appeared to disagree noting that roads should not be constructed through PPPs to pave way for the rich to pay road tolls while the poor get stuck on crowded public roads.
Similarly, Magufuli said PPPs are too expensive for a region that is less competitive on the international arena in terms of trade.