American Chamber of Commerce Kenya CEO Maxwell Okello during an interview with The Citizen managing editor Mpoki Thomson in Dar es es Salaam recently. PHOTO | SAID KHAMIS
What you need to know:
As proof of the growing investment portfolio in East Africa, foreign investors who traditionally eyed Kenya as the sole business hub in the region are expanding their options. American Chamber of Commerce Kenya chief executive Maxwell Okello explains more in an exclusive interview with The Citizen’s Mpoki Thomson.
Question:This is an exciting time for the investment space. Why is there a growing interest for investors to expand their presence to Tanzania Mainland and Zanzibar?
Answer: We have seen quite a bit of positive change with the coming in of President Samia Suluhu Hassan. The Tanzanian economy is opening up. Traditionally, American companies have looked at Kenya as the hub, and I believe that will largely remain the case, but they are also very keen to establish themselves in Tanzania and the rest of East African countries. Our mission is to find out what those opportunities and requirements are, and also look at Tanzania’s policy and regulatory environment. Based on that, I believe these companies will be able to make the decisions that they need to make in order to invest in Tanzania.
When investors explore prospects in a country, what kind of insight do they seek to gain in the various sectors?
They look at the tangible opportunities available; what projects can these companies can engage? And secondly, understanding the environment from a policy, regulatory, legal perspective is critical. And thirdly, building those relationships: relationship with the government, relationship with Tanzanian private sector is crucial.
Can you expound more on the specific engagements you’ve had with the government. Is it more on the regulations?
A quick rundown of how our program has been so far, we have engaged with the deputy minister for Industry, Trade and Investment, and he basically laid open some of the key areas that American businesses can look at in Tanzania. He also talked about government support – that his office, and I suppose other ministries as well, are open to engage because the government would like to drive private sector-driven economic growth, which if you ask me is the right strategy if you want to build any economy within Africa.
Two, as we speak, we have the Tanzania Investment Center (TIC) making a presentation to American companies, and they are outlining the opportunities within those key sectors; health, technology, energy in order to bring some tangibility on what is possible. For example; are there some bankable projects? Together with that, they look at the process of tapping into that opportunity and available support for a company that wants to establish its presence.
Nairobi has traditionally been the economic hub for east and central Africa.
As businesses look to expand beyond Kenyan borders, what is the status of integrating the business space in East Africa?
Integration is the way to go. I think we are currently looking at 150 million people in the EAC region. That’s a big market in itself and it has been made possible because it is under the umbrella of the bloc. It is more attractive for investors to talk about the various skills and opportunities available in East Africa as a region instead of focusing on individual countries. Driving integration is not just important for investment, but also for pushing inter-EAC trade. Speaking as an East African, this is a priority to us. We look at trade and investment as tools that will help drive economic prosperity in our region. American investors want to be part of this story, and that’s the reason we are here in Tanzania and hoping that these changes we are seeing in our region will help push forward the business environment.
East African countries have similar challenges in the investment space. An investor in Tanzania is bound to face similar challenges when he goes to Kenya. What do you think is the ideal strategy to address these ubiquitous challenges?
Private-Public dialogue is critical. I think governments need to look at the private sector as partners in economic development. Being able to come at the table and openly discuss policy issues that are negatively impacting the ability of businesses to be able to flourish. When businesses flourish, jobs and wealth are created which have a ripple effect to the entire economy. So, my answer to you would be we need to see more of that.
We need to see genuineness when government comes to the table so that it is not tokenism, but actually government and the private sector coming together, wanting to resolve those bottlenecks and constraints to ensure we can drive prosperity within our economies.
Secondly, involve private sector in policymaking. Get us in so that the outcome already reflects what was jointly discussed.
What are the immediate solutions to trimming the trade gap between East Africa and developed economies such as the US?
We need to resolve policy and regulatory issues so we can truly open up for business and enterprises to take foothold. Secondly, awareness – this is something not talked about as often as it should. For example, American companies need to know what opportunities are available. A mission of 19 companies came to Tanzania to resolve this need.
Local companies need to know that they can have foreign counterparts they can work together with to achieve their objectives from a business perspective. This is something that has worked quite well in Kenya – creating market opportunities.
Thirdly, it is really about building the right relationships so you can take advantage of the opportunities. I strongly believe that to drive the numbers, and bridge that trade gap, there needs to be more integration happening between local and foreign companies on one hand, and then government needs to create an enabling environment to allow that trade and investment to truly flourish.
How about the issue of capacity building and skills development for local companies?
This is a very important topic, a significant majority of the workforce in American companies operating in Kenya are locals. It should be a cultural thing where an investor wants to work with locals who are qualified for the job. Secondly, technology transfer is also important; bringing in those innovations and being able to transfer that knowledge. Governance and transparency are also key, and the ability to adhere to rule of law is critical to advance trade and investment.
Despite rhetoric on opening up the economy being popularized by top government officials, there are still some challenges that investors face on the ground. How can this investor frustration be addressed from top to bottom?
It requires commitment; walking the talk. There is a lot of rhetoric that tends to happen at the governance and policymaking level, but bottlenecks are created in actual factors on the ground. We need to be genuine and committed to the things we say we will do. Some of these bottlenecks are actually not difficult to resolve if there is will. Sometimes what tends to happen is that the bigger picture is lost on why we do what we do, why we want to create an enabling environment. If the commitment is to push economic growth and prosperity, then you’d want to remove those bottlenecks that humper the achievement of that goal.
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