Micro, small, medium, large businesses form alliance to confront East African bloc

MONDAY October 14, 2019

By Joe Lihundi

Tranquility News Reporter, Arusha

East Africa’s micro, small, medium and big business have resolved to team up in a bid to amplify their voice when demanding for their right place during the fora of the East African Community (EAC) organs and institutions.

Leaderships of their umbrella organisations met in Arusha recently to agree on approaches for their new alliance.

The Arusha-based East African Business Council (EABC) recently hosted a delegation of the Confederation of Micro and Small Enterprises Organisation East Africa (CMSEOEA) whose headquarters are in Nairobi, Kenya.

The, EABC, which has been representing the private sector and corporate since 1997 in the region, boasts having an observer status in high level meetings of the EAC organs and institutions.

The apex advocacy body of the private sector and corporate is also the champion of the private sector in the EAC Consultative Dialogue Framework which brings together the EAC Secretary General, civil societies, parliamentary groups, religious groups and other non-state actors.

“We’ve been organising the informal sector for the past 20 years of the integration process, our house is now in order enough to closely work with the big brothers in the EABC,” the CMSEOEA chief executive officer, Mr Richard Muteti, said on the sidelines of the inaugural meeting.

The alliance aims at industrialising and creating competitiveness and employment opportunities for East Africans, Mr Muteti said in an interview with Tranquility News at the EABC headquarters.

He was optimistic the alliance would add weight to the CMSEOEA ambition to develop a regional policy to guide micro, small and medium enterprises which account for about 90 per cent of all businesses in the bloc.

Lack of standard specifications, poor production and finish methods and short life span of goods would continue inhibiting growth of the micro, small and medium enterprises in the region in absence of a policy, he said.

Mr Muteti said working together with the EABC in areas of forward and backward linkages would enhance quality and decency of jobs the informal sector created as well as the value of goods and services it offered East Africans.

The EABC chief executive officer, Mr Peter Mathuki, said the alliance would invigorate the private sector for it to take its right place in the integration agenda.

“The EAC Treaty says the bloc is private-sector driven; we cannot drive economies of the region if we don’t speak with one voice,” he said.

Mr Mathuki said the voice of the private sector was incomplete in absence of the micro, small and medium enterprises, prompting the EAC Council of Ministers to advise the EABC and CMSEOEA to consider working together.

“The private sector needs to graduate from the integration agenda observer to a fully-fledged partner for it to move from the passenger to the driving seat in the bloc,” he said.

Mr Mathuki revealed that the private sector would for the first time convene an East African economic forum to, among other things, set an agenda for the bloc as was the case with other regions.

The conference to be held ahead of the EAC Heads of State Summit in Arusha towards the end of next month would attract 600 representatives from all micro, small, medium and large businesses across East Africa.

“We want to have an inclusive journey, not only for the big players, but also for the micro, small and medium ones,” the EABC Board director for SMEs, Ms Mary Ngechu, said.

As a result of the new alliance, the EABC would use its observer status in the bloc for representing micro, small and medium enterprises’ concerns in high level meetings with the EAC Heads of State Summit and Council of ministers.

“We will in addition mentor them to access the regional market so that we walk together in growing the economies of the bloc, given over 90 per cent of businesses in East Africa are in the MSMEs,” Ms Ngechu said.

Dr Jorg Kleis, the coordinator of the Association Partnership Project of the EABC and Industries Federation of Germany (IFH), hailed the alliance, saying the federation expected more collaboration in future.

“We are looking into more exchange with young companies because when you come to Germany and German companies come to East Africa, we will get to see what each other’s production, desks and offices look like,” Dr Jorg said.

The partnership between EABC and IFG aims at strengthening the council from within by funding approaches, activities and staff.

Dr Jorg said SMEs were crucial in German, as they made 95 per cent of the country’s economy. “These are companies that start with 10 employees and end up to 2,500,” he explained.

He said German SMEs were export oriented and traditionally family businesses with some serving as classical suppliers of multinationals like BMW.

His own family’s healthcare business, for instance, has 500 employees distributing hospital beds and wheelchairs with a turnover of Euros 12 million per year.

“We are the ones who ensure young graduates get jobs. This is a political and social role,” he stressed.