Month: May 2017

East Africa: I&M Pays U.S.$8 Million for Stake in Tanzania Subsidiary

I&M Holdings has invested Ksh819.9 million ($8.1 million) in acquiring an additional 15.35 per cent stake in its Tanzanian subsidiary through a series of transactions that included the buyout of French fund Proparco.

This raised the banking group's interest in the unit to 70.38 per cent from the previous 55.03 per cent, according to the Nairobi Securities Exchange-listed firm's latest annual report. Besides acquiring some shares from Proparco, I&M also participated in the subsidiary's rights issue in which it took up shares left by other minority investors.

"During the year, the group increased its shareholding in the subsidiary to 70.38 per cent up from 55.03 per cent held earlier following the exit of Proparco, which had reached the end of its investment horizon," said I&M chairman Daniel Ndonye in the statement.

Rights issue

The subsidiary undertook a $5 million rights issue to boost its capital position in the wake of economic challenges that affected the banking industry in that market.

I&M says the introduction of austerity measures last year greatly affected money circulation and reduced credit to the private sector.

The banking sector was also hit by the implementation of value-added tax on financial service charges "and a significant increase in the stressed assets in view of the tight liquidity position".

The unit secured a Ksh1.2 billion ($12 million) loan from Dutch development finance institution FMO and has accessed Ksh824 million ($8.2 million) of the amount for on-lending.

The subsidiary made a pre-tax profit of Ksh373 million ($8.2 million) in the year ended December, rising marginally from Ksh371 ($3.7 million) a year earlier. Its loan book increased 11 per cent to Ksh13.7 billion ($137 million) from Ksh12 billion ($120 million) in the same period while customer deposits grew four per cent to Ksh13.1 billion ($131 million) from Ksh12.6 billion ($126 million).

Increasing its interest in the Tanzanian unit is part of I&M's strategy of diversifying into the regional market.

"While Kenya remains the dominant player within the EAC region, we are witnessing increasing strong growth in the other EAC economies - Tanzania, Rwanda and Uganda, which further affirms our goal to be a regional bank," said Mr Ndonye.

Tanzania: JPM Directive Bites, As Tanesco Clients Pay Up

Tanga — The public utility firm TANESCO has succeeded in collecting at least half --7bn/- of the outstanding 15.4bn/- that remained uncollected from its clients across the region only two months ago.

The move follows President John Magufuli's directive to disconnect power from anyone, or firms, with pending bills "regardless of their status.

" Tanga Regional Tanesco Manager, Engineer Abrahaman Nyange said here yesterday that the president's order had since paid dividends, as debtors come forth to beef up their revenue collection efforts.

Immediately after the presidential order, many in Tanga suffered power disconnections even as others rushed to make good their outstanding bills in March this year - raising at least 7bn/-.

He singled out public institutions as being the most notorious defaulters, at time blaming lack of 'sufficient budgets' to meet their outstanding electricity bills.

He also said the delays had, in turn, been affecting their own operations and development projects, such as service distribution and line maintenance, among other infrastructure.

But he also pointed to losses caused by heavy rains that adversely affected power distribution networks within -- and across -- the region where some poles reportedly fell down.

East Africa: Aftercare Services a Must for Industries to Thrive, Spur Development – EAC Business Leaders

The business community is willing to support the East African Community (EAC) integration process, but problems like lack of "aftercare services" are affecting the potential and growth of enterprises and hence their contribution to regional development, business leaders have said.

According to Lilian Awinja, the executive director of the East African Business Council (EABC), there is urgent need for interventions and a clear action plan to address such issues and "put manufacturers in the region on a growth path".

"One of the challenges we (EACBC) have noticed is that we welcome companies to come and invest in the region. However, we only 'take care' of them when they land, but rarely follow up after this," Awinja said.

"We are not worried about companies once they have set up and don't work on the issues that arise later on. We worry more about bringing in more investors than taking good care of the companies that we already have."

So, the care we give companies after they have set up shop in the EAC bloc is not satisfactory and this affects their growth and contribution to regional growth and job-creation, she added.

The result of poor or insufficient after care, she observed, is that the region has companies that operate below capacity.

Awinja was speaking on the sideline of the three-day second East African Manufacturing Business Summit that ended on Thursday in Kigali.

The EABC chief said many firms are operating at just two per cent of their installed capacity "when they can produce at a higher rate" and, for example, produce enough food for the region or create more jobs.

"I am sure the manufacturing sector can contribute more than the current 10 per cent to regional GDP. This is too low and requires urgent intervention by member states to address the challenges faced by sector players like cost of power to drive its growth," Awinja said.

Why aftercare services

The United Nations Conference on Trade and Development (UNCTAD) launched its "Investment Advisory Series" in the recent past that provide practical advice and case studies of best policy practices for attracting and benefiting from foreign direct investment.

One of the series defines the term "aftercare" as the range of activities from post-establishment facilitation services to developmental support to new firms to retain the investment, as well encourage follow-on investment to achieve greater local economic impact.

It is driven by the view of what transnational corporations (TNCs) need in the present and the future, and what the host economy needs from international companies in its territory, the publication notes.

Accordingly, this is achieved through the development of a structured service offer that includes administrative, operational and strategic support to TNCs.

Supporting these approaches, Atma Prakash, the senior sales and marketing manager of Sulfo Rwanda Industries, told Business Times that an industry is like a baby and "should be well-nourished in its nascent stage".

"An industry is like a baby and it must be well-nourished when it is growing. Though it grows slowly, there will be a point when no more care is necessary and it can grow by itself. In the case of investment, the government is the parent and it has to support the industry for it to grow well and become competitive," Prakash said.

He cited support information on export markets as an example of the "nourishment" by governments. He added that when a new company comes into the market and their products is widely accepted, but others start counterfeiting them, this will hurt the firm. "Only governments can protect new industries from these types of activities as part of aftercare service. There are many things involved in aftercare for industries that EAC government should address," he added.

Policy-makers faulted

Ali Mufuruki, a leading Tanzanian businessman and founder of Infotech Investment Group, with interests in a number of sectors, told Business Times that the industrial sector in the region is still young and hasn't attracted many investors.

He, however, blamed that on the lack of commitment on the part of policy-makers in many government agencies across the bloc,saying this was hurting the regional industrialisation project.

Policy-makers, he said, were not excited about the regional industrialisation project because "they do not see immediate individual benefits."

If a government official was developing policies for a given private sector investor, it would make more relevance to them as they know why they are drafting the policy and for whom.

However, when Americans make policies for American industries, he observed, they see citizens owning those industries.

"But here you make industrial policies for other people - Lebanese, Chinese, Britons and citizens are largely ignored. This is bad and costly as it focuses on short-term individual gains," he said.

He said the practice is fuelled by corruption and greedy on part of some policy-makers. "For instance, an official could be working on your documents, but suddenly turns their attention to those willing to offer them commission," said the Tanzanian millionaire.

"Therefore, since we are not committed and do not feel ownership of this project as East Africans both in the private sector and government, this kind of lackluster attention to firms coming to invest in the region will continue." The businessman said many new investors are abandoned by policy-makers shortly after they start operations "because nobody cares".

Guarded optimism

Despite these challenges, Mufuruki remains optimistic.

"I think that we will be doing the next generation, our children, a disservice if we don't change the status quo. I am part of the problem. That's why I challenge other people, but I also challenge myself," he noted.

The EAC, Mufuruki said, has huge potential for growth.

"If we don't grow it now, it's going to be difficult in the future. Though I am optimistic, I am not underestimating the magnitude of the challenges we face."

Other challenges

Awinja said the high cost of doing business in the region was hurting manufacturers. She said issues such as access to electricity, high taxes and the high cost of air transport need urgent attention from political leaders.

Studies have shown that EAC has one of the highest freight and transport charges that erode global competitiveness for its exports and imports.

Transport costs are 60 per cent higher in the region compared to the West. Studies indicate that, globally, a 10 per cent decline in transport costs is likely to increase trade by 25 per cent and because Africa and East Africa, in particular, have generally higher transport charges it could lead to more trade.

For the manufacturing Sector, Awinja says, high transport charges from key ports of entry, Mombasa and Dar es Salaam, mean that raw materials are transported at much higher charges and eventually increase cost of production.

Kenya: Central Bank Holds Basic Lending Rate At 10 Per Cent

The maximum cost of loans remains unchanged after the Central Bank of Kenya (CBK) on Monday retained the base lending rate as banks continued to shy from lending due to the legal caps on borrowing rates.

The Monetary Policy Committee (MPC) maintained the benchmark rate at 10 per cent despite inflation hitting a five-year high, saying the current monetary policy stance had reduced the threat of money-driven inflation.

Kenya is struggling to contain high inflation, caused mostly by higher food prices, which is outside the monetary control.

Kenya's inflation rose to an annual 11.48 per cent in April, up from 10.28 per cent in March and the highest since May 2012 -- which is beyond Treasury preferred an upper limit of 7.5 per cent.

Committee chairman and CBK governor Patrick Njoroge cited a stable forex market, a narrower current account deficit and exchange reserves are "at all-time high levels" which continue to cushion the economy from unforeseen shocks as the reasons for holding the base rate unchanged.

"The MPC, therefore, decided to retain the Central Bank Rate (CBR) at 10 per cent. The committee will continue to closely monitor developments in the domestic and global economies, and stands ready to take additional measures as necessary," said Dr Njoroge in a statement.

The government capped lending rates last September at four percentage points above the Central Bank Rate, saying they were too high and banks had repeatedly failed to lower them.

The Central Bank said as a result of the caps, the number of loan applications had increased by 23.4 per cent between August 2016 and April.

The value of the loans applied for fell by 18.3 per cent between August and April, suggesting approval of smaller loans.

"On the slowdown in private sector credit growth, which was largely due to factors in trade, manufacturing, real estate, and private households, the committee noted that credit to private households, manufacturing, and real estate had picked up in March and April 2017," said Dr Njoroge.

Cameroon: Cocoa – Over 25,000 Farmers Certified

A ready market for cocoa needs quality which is available in Cameroon

On-going initiatives have been ignited to meet up with the process of certification of cocoa in the country. The country's certification plan features as a key component of the 2020 cocoa/coffee development plan. According to information from the National Cocoa and Coffee Board (NCCB), over 25.000 farmers are certified today and some 10.000 metric tons of certified cocoa beans have been exported from Cameroon with over 90 per cent shipped to Europe. Secondly, a couple of initiatives have been undertaken by government through NCCB and the private sector: the TELCAR Cocoa Ltd and Cargill certification programme in the Southwest Region. Also, more than 15,000 cocoa producers have been trained and are already UTZ certified. SIC CACAOS and Barry Callebault has also invested in certification schemes in the Centre and Southwest Regions, while Agro-produce Management Services Ltd and Theobroma are also embarked on certification schemes in the Southwest and Centre Regions. Also, OLAM International and Olam Cameroon have been active in coffee certification in the North West Region. Having started in 2008, certification induces benefits both on the national and international market, such as, competitiveness with other origins, climate change mitigation, soil fertility and yield improvements and professionalisation of stakeholders, especially farmers as well as improvements in the overall well-being of rural communities. Furthermore, certification in the long run engenders multi-dimensional benefits that go beyond premiums and labels. Current policies and plans of the National Cocoa and Coffee Board are structured to produce more, and better quality cocoa, with emphasis on sustainability. It is worthy to note that certification process conformity becomes easier because it enables the farmer to recover the extra cost generated by producing more and better quality cocoa that can be sold at premium prices. Certification, however, might not necessarily bring about the much needed rewards in the form of premiums nor guarantee a ready market. These depend solely on the market.

Africa: Traction of Diaspora Bonds for Financing Industrialisation


This is the third in a series of articles discussing the concept of bonds, and how their various forms and diversity (treasury bonds, infrastructure bonds, industrial bonds, corporate bonds, municipal bonds, diaspora bonds, sovereign bonds, green bonds, etc) can be used as tools for financing our development. As you may recall, I started writing these series by stating the obvious fact: that in order to succeed, our development visions, policies, plans and strategies must be underpinned by an equivalent transformative change in the financial system, i.e. there must be the financial infrastructure, structures, products and the necessary intermediation agencies that would bring the capital formation idea into fruition.

I further stated that, there can be many financial products that could be developed to facilitate the financing of our development, either in industrialisation or other such development plans -- the idea of enhancing and diversifying development of our capital markets via bonds issuances, may seriously need further consideration, given its potential. I said that our bonds market is largely underutilised both by the public and private sector; i.e. to date our bonds market is worth only Sh6.2 trillion ( just 5 per cent of the gross domestic product - GDP, which is far on the lower end), to gravitate this problem 98.5 per cent of our bonds market is made of government bonds, there are only four outstanding listed corporate bonds (worth about Sh100 billion), there are absolutely no municipal bonds or infrastructure bonds, or industrial bonds, or any other form of bonds. And so as a matter of sensitization and probably in efforts to make us think deeper, I have discussed industrial development bonds and infrastructure development bonds, today I will cover diaspora bonds.

As is, upon right conditions and circumstances, diaspora communities are eager to support the fortunes of the people who have remained in homelands. They normally demonstrate this desire via remittances - as a result, remittances have become a vital part of the safety net, cushioning millions of families in developing nations and keeping families from momentous financial difficulties (note, as of 2016 developing countries received remittances of $401 billion which was 3-times larger than official development assistance - ODA and two-third of total global remittances of $601 billion). However, despite high volumes and frequencies of remittances, these funds are largely treated as immediacy expenditure measures, with a bit of developmental aspects, dealt at individual levels hinged on the idea of emotional and personal attachments as well as patriotism. However, for the lack of coordination, this has not been executed in the broader nation building level. And so, while remittances offer evidence that members of the diaspora care about their home countries -- even if for a primary intent of keeping their loved ones funded - these funds do not offer a path to financing sustainable development at the national level. In current conditions, governments does little to harness the flow of incoming foreign money from diaspora except by making such transactions cheaper and easier as they make their way to individual families.

Thus, much as communities in developing countries continues to rely heavily on remittances, as source of funding - remittances end up only helping friends and families in times of need and to some extent help the diaspora populations acquire assets back home.

Yet, there is an opportunity for cash-strapped developing nations to gain access to the hard-earned savings of their sons and daughters living abroad - an opportunity that have been tried and tested by some other countries. Israel and India comes to mind easily - over the years these countries have made significant uses of their famously large and industrious diaspora populations to finance local development. Israel and India have had successful issued diaspora bonds, with expatriates from each country investing billions of dollars. From early 1950s, the Development Corporation of Israel has implemented several diaspora bonds issuance program seeking finances from its diaspora with the objective of raising foreign exchange for building the state infrastructure - annual sales of such bonds fluctuating depend on the needs, i.e there were significant increases during the 1973 Yom Kippur War ($150 million), similarly during the 2009/11 terrorist attacks ($500 million). In the other hand, on three separate occasions, India has issued bonds to its expatriates in order to balance their payment deficit and also finance infrastructure projects raising millions of dollars from its diaspora population. What is, and how does diaspora bonds works?

Diaspora bonds are essentially a form of government debt that targets members of the national community living abroad, based on the presumption that their emotional ties to a country make investing in such products worthwhile. It is a fact that, bolstered by advances in transportation and communication and an increasingly mobile workforce, globalisation is contributing to the rise of interconnected societies and communities that needs to be taped. As a result, developing countries in need of financing can consider expatriates working in wealthy countries for development financing support back home. This is the idea behind issuing diaspora bonds, in which diasporas receive discounts on government debt from home countries.

This financing tool has gained its traction in developing countries in recent years - so for developing nations with sizable diaspora populations, diaspora bonds provide an opportunity to tap into a capital market beyond international investors, foreign direct investments, or external loans. After all, some governments (given their geo-political, political and socio-economic challenges) find it difficult raising money on international markets or attracting foreign investments, in such cases, diaspora bonds are thought as attractive alternative source of financing. Much as emotional forces has rarely been applied to finance, but attachments to home and patriotism could yet prove as effective fundraising mechanisms for such economies, that are struggling to raise money on the standard international capital markets or in attracting foreign investments or accessing funds but with prohibitively high interest rates demanded by mainstream investors.

Despite the patriotism aspect, policy makers and governments should not mistaken this financing tool to a quick and easy route to access the stockpile of savings that diaspora population might have built -- to succeed in raising capital through this mechanism it requires some painful changes to the way economies manage their finances and how they would like to build trust and develop a sustainable a s well as a responsible relationship with our diaspora populations as considerations for diversifying development finance.

In conclusion, as is, well-planned infrastructure and development projects improve people's lives and spur economic growth, but with competing financial needs and little to mobilise from, either by way of taxes or borrowing or development assistance - it is difficult to pay for that new road, or a standard railway gauge, or a power generating plant, etc all at once, so government might choose to supplement its domestic bonds issuance program with diaspora bonds. What has been the experience closer to home? - Ethiopia, is one of the countries that have made some tangible success in this aspect, started with the first diaspora bond ("Millennium Corporate bond") in 2008, targeted raising funds for Ethiopian Electric Power Corporation from the diaspora, however, this issuance did not meet expectations.

Then, despite this first experience, Ethiopia launched the second diaspora bond: "Renaissance Dam Bond" which turned out to be a success. And so, other countries with significant remittances from diaspora such as Nigeria (which receives remittances to the tune of $20 billion per year) issued a diaspora bond of $100 million; Ghana with average remittances of $2 billion a year and Kenya at $1.6 billion, have also considered this idea. I clearly understand that with our average remittance - which is currently less than $0.1 billion per annum - diaspora bonds issuance might not seem as an attractive consideration. However, it may be that with more coordination and existence of products such as diaspora bonds, might unlock the potential.

Nigeria: Petroleum Industry Bill As Passed By Senate

After years of delay, the Senate on Thursday passed the Petroleum Industry Bill, inching closer to regulatory and business reforms in the nation's oil and gas industry.

The bill still has to go through the House of Representatives and the president to be law.

If it succeeds as presently drafted, then Nigeria will have five new commercial and governance organizations to replace existing ones, such as the Nigerian National Petroleum Corporation and the Department of Petroleum Resources.

Download below the version of the bill passed by the Senate on Thursday.

Tanzania: Acacia Mining Shares Dive for Second Consecutive Day

Dar es Salaam — The price per share of Acacia Mining plunged further yesterday as investors continued with their wait-and-see approach in the wake of the company's future in the country following disclosure that it has been understating the value of minerals within the exported concentrates.

The shares - which plunged by 15.91 per cent at the Dar es Salaam Stock Exchange (DSE) on Wednesday - dived further by 19.47 per cent yesterday.

The gold miner's share closed at a price of Sh10,990 on Wednesday, tumbling from Sh13,070 on Tuesday, market data show. But as of yesterday, it went further south to close the day at Sh8,850.

On Wednesday, President John Magufuli announced an extension of export ban on metallic mineral concentrates after a probe team which he had instituted in April came up with findings to the effect that minerals' exports had been understated, causing a loss in tax revenue.

Similarly, Acacia's share fell further at the London Stock Exchange yesterday.

By 15:30 hours United Kingdom (UK) time, it was trading at £261.50, being a 14.36 per cent drop from £308.30 that was registered at 08:00 hours UK time yesterday.

The company has however opposed the findings of the report, saying it fully declares everything of commercial value that it produces and pays all appropriate royalties and taxes.

On Tuesday, Acacia share closed at £427.6 but fell to £308 on Wednesday.

East Africa: Kenya Has Not Reneged On Ban On Used Clothing, Says Official

A senior Kenyan official, who is in Rwanda for the ongoing East African Manufacturing and Business Summit, has refuted claims that her government has reneged on a regional move to progressively ban used clothing.

Betty Maina, principal secretary in the Kenyan ministry of labour and EAC affairs, told The New Times that Kenya has not made a U-turn on reduction of consumption of used clothing and that East Africans should have the dignity of wearing new clothing.

Maina said: "That's the aspiration of all regional heads of state and that's something that has been upheld. Over the last few years, all the countries have been building up their textile industry with a view to ensuring that it can supply decent and competitively priced new cloths that will replace demand for used cloths."

"Kenya has been at the forefront of this. In the last two months Kenya sold or made available to the market in Kenya and the region new clothing made in EPZs and there is great demand for those new cloths."

An Export Processing Zone (EPZ) is a customs area where one is allowed to import plant, machinery, equipment and material for the manufacture of export goods under security, without payment of duty.

Contrary to what is being alleged, Maina said Kenya seeks to expand availability of new clothing made in the country to other east African countries and it is committed to ensuring that consumers "have an affordable choice of locally made textiles so that overtime, we can completely eliminate used clothing."

EAC interests first

"Used clothing make a large part of exports from Europe and America to east Africa and, we are aware that their lobbyists obviously have an interest in this but east African interests come first," Maina said.

She was emphatic that the communiqué of the 18th Ordinary Summit of the EAC Heads of State, held in Dar-es-Salaam, Tanzania, last weekend "clearly affirmed the commitment of east Africans to build up a competitive local textile industry" and Kenya was part and parcel of the Summit.

"The Heads of State received a progress report on the review of the textile and leather sector with a view to developing a strong and competitive domestic sector that gives consumers better choice than imported used textile and footwear and directed the Council to finalise the matter and report to the 19th summit," reads the communiqué of the 18th ordinary summit of the EAC Heads of State.

Speaking on condition of anonymity as they are not allowed to speak about the issue, some regional leaders cited Kenya's alleged caution to other partner states saying that they should refrain from using the word "ban" in the bloc's plan to progressively do away with imports of used clothing, saying this contravenes international trade laws.

Kenya's proposal, they say, is for EAC countries to continue with their agenda and increase duties on such imports as well as set up their own production structures and capacities to make available east African-made clothing and shoes but avoid the word "ban."

"The EAC Summit did not use the word 'ban' but indicated that we will progressively phase out," the official said, explaining that the problem is being caused by the US which "has been complaining about why we are proposing a ban on used clothing and shoes."

In his remarks at the opening of the summit in Kigali on Tuesday, Dr Mukhisa Kituyi, the secretary-general of the United Nations Conference on Trade and Development (UNCTAD), had called upon the region to speak out with one voice.

'African dignity'

Kituyi, a Kenyan, said: "Kenya, you are wrong to reverse the stand on used clothing. East Africa should speak with one voice. If you speak as a group, there is no American lobby that will say that America is suspending relations with East Africa because you are refusing used clothing."

Most importantly, Kituyi said, the region has the potential and a peace dividend to take advantage of in spurring industrial growth.

Kituyi was Kenya's minister for trade and industry between 2002 and 2007 when he faced off with Western powers on the same matter.

"When I was minister for trade and industry in Kenya, the US government pushed me, as part of negotiating AGOA [Africa Growth Opportunity Act], that we should not reduce importation of used clothing," he said.

"But I told the US trade representative at the time, Robert Zoellick, who later became president of the World Bank, 'can you look me in the eye and tell me that in our democratic partnership, you want us to make clothing to sell to America and after you wear them and owners of those clothing die, you export them for us to wear?' He said, 'no, our industry demanded it but I had to explain.'"

According to François Kanimba, the minister for trade, industry and EAC affairs, the EAC Secretariat has completed a study on a roadmap how the region will implement the phase out and ultimate total ban of imports of used clothing.

The EAC study, he said, will be discussed at the end of the month during which they will approve a detailed strategy on how to develop textile and leather industry in the region.

Rwanda has already started implementing a phaseout of importing used clothing.

Lilian Awinja, the chief executive of the East African Business Council, said they have for a long time recommended the ban of usedd clothing imports.

"Why would we, for example, want east Africans to use inner garments that have been used by other people? There is no logic in that," she said.

"As a region, we must make a decision and agree that we will trade with them in other products other than clothes and footwear that is used."

Christophe Bazivamo, the EAC deputy secretary-general in charge of productive and social sectors, said the "problem behind used clothing come from a complaint on the American side."

Bazivamo said: "Americans involved in used clothing business have written officially threatening to take this issue to the US Congress the argument being that people in America involved in that business are losing jobs.

"They wish East Africans to stop the campaign they are in and continue using used clothing. It is disrespectful to our citizens. It is not about defending the interests of east Africans but about protecting business interests of other countries."

The bloc's big picture is about promoting local industries with a multiplier effect on job creation and wealth creation, among others.

East Africa: How Region’s Diaspora Community Can Spur the Manufacturing Sector


The East African Diaspora community can add great value to human and financial capital needed as the region embarks on a bold transformation agenda and seeks to end dependence on commodity exports by seeking for innovative ways to move forward in developing value chains.

This was said by Marie Chantal Uwitonze, the president of the African Diaspora Network in Europe (ADNE), who was speaking during the East African Manufacturing and Business Summit that closed in Kigali yesterday.

Uwitonze, a Rwandan living in Belgium, was addressing the topic of long-term and innovative financing for the manufacturing sector and the participation of the diaspora.

"Harnessing manufacturing is the best way to achieving inclusive 2030 Agenda for Sustainable Development in Africa," Uwitonze said.

"Africa has an enormous potential for industrialisation. With our minerals, hydrocarbon and water resources, a climate that is favourable to agriculture and young and dynamic population from inside and outside the continent, Africa can successfully become a competitive power."

Uwitonze said industrialisation has a multiplier effect on economic growth, job creation and interconnection of markets, among other benefits.

"Regional integration benefits every citizen of East Africa and we, as the Diaspora, are ready to pull our weight in this promising step. We are ready to bring home our skills, knowledge and capital. We live out of the continent but our hearts live in Africa," she said.

There are nearly 150 million Africans living in Diaspora.

Remittances as assets

Robert Mathu, the executive director of the Capital Markets Authority, noted that remittances to regional countries have become a very significant asset to the region and have been increasing consistently.

In 2015, he said, Kenya, Rwanda, Tanzania and Uganda fetched a combined $3.5 billion and in Kenya alone, remittances superseded the traditional export proceeds from coffee, tea and others.

Dr Shem Ochuodho, global chairperson of the Kenya Diaspora Alliance, said the Diaspora will be a game changer for the region's economic growth and development if well harnessed.

Ochuodho said some members of the Diaspora think that all their governments back home care about is their remittances and yet if this perception is changed, the Diaspora can contribute more to their countries. Africa's Diaspora remits between $60 and $80 billion annually, the better part of which goes to Nigeria.

According to Uwitonze, Diaspora remittances account for more than three times the official development aid.

Leveraging Diaspora remittances as source of financing for manufacturing, she said, requires assessing their effectiveness and drawing lessons from past experiences.

She said it is not easy to measure the impact of remittances as they largely remain essentially family-to-family assistance and, it is, therefore, important to envisage different mechanisms to link them to national projects.

Regional governments and financial institutions have an important role to play in this process, she said, pointing to well-thought out Diaspora bonds - debt instruments issued by a country or a private corporation to raise financing from the Diaspora - as one sure way of making it happen.

"Diaspora bonds are one of the tools to securitise remittances. Diaspora bonds can provide additional funds for the manufacturing projects. They are a relevant alternative to borrowing on the international capital market, multilateral or bilateral financial institutions."

Diaspora bonds, she recalled, helped countries such as Israel and India which are "successful examples" to face economic crisis. In Africa, Ethiopia and Nigeria issued bonds that triggered less performance but these "can provide good cases of experimentation," Uwitonze said.

Conditions for a Diaspora bond

To leverage the potential of Diaspora bonds, Uwitonze, like Ochuodho, recommends a good relationship between countries and their Diaspora communities.

She said: "There is a need for permanent dialogue between the countries and their Diaspora. A similar relationship should be initiated at regional and continental level. The Diaspora need to be informed about the strategies and policy orientations."

Behind the idea of Diaspora remittances, Uwitonze reasoned, there is the sense of patriotism, and the belief that one is doing good and is contributing to development of their country.

"The sense of patriotism comes from the strong ties between the country and its Diaspora. For instance, since the introduction of the 'Rwanda Day' and Umushyikirano annual meetings that involve the Rwandan government, including the President and the Diaspora strengthened the spirit of patriotism within the Rwandan Diaspora."

Good knowledge of the target Diaspora population and awareness about the bond exists is also crucial.

Before launching the bonds, Uwitonze said, countries should know about the potentiality in their Diaspora: the profile of potential investors, the sectors that interest them, the average amount they are ready to invest, among others.

Financial stability and security guarantees will also be important in the regional effort to leverage the potential of Diaspora bonds.

"The securitisation of remittances can reinforce the trust of the Diaspora while providing African banks with a tool to raise additional resources," she said.

Eng. Daniel Murenzi, president of the Rwanda Diaspora Global Network (RDGN), said Rwanda's Diaspora is playing a significant role in the country's socio-economic development and this has mainly hinged on efforts to construct cohesion.

Murenzi said the Government advocates for the interest and rights of Rwandans abroad in their host countries and in Rwanda and mobilises them for sustained image building of their nation.

"Recent years have witnessed a renewed interest in the complex relationship between communities living abroad and development, mainly due to continued mobilisation. We are experiencing a continuous growth in remittances," Murenzi said.

In 2011, he indicated, $166.16 million was received from the Diaspora through banking institutions - without counting amounts coming in through informal channels - while in 2016, $167.33 came into the country.