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EAST AFRICAN INVESTMENT CONFERENCE KIGALI 26TH – 28TH JUNE 2008 PROMOTING REGIONAL COMPETITIVENESS:Investment in Value Addition Operations Prof. Charles Kwesiga Executive Director Uganda Industrial Research Institute (UIRI) June 2008
Outline of Presentation • Factors for success • Current regional status • Value Addition • Conclusion
FACTS ABOUT EAC • Wealth of resources and favourable climatic conditions • Strong political commitment to EA Federation • Similarity of development profiles key to harmonization of policies, strategies and development agendas
Critical success factors: • Skilled manpower • Optimal resource allocation • Capacity for TT and technology development • Sound infrastructure • Effective value addition • Quality of products and well designed processes • Investment in R&D, Science and Innovation • Promotion of regional trade and joint strategies for global market • Good governance and political stability
Key Players POLITICAL CLASS • Stability • Policy development • Resources allocation PRIVATE SECTOR TECHNOCRATS Collaboration • Implement policy • Offer technical services • Develop enterprises • Promote products • Effect industrialization
REGIONAL OVERVIEW Regional Growth & Investment (2007)
Regional Export Profiles • All heavily dependent on export of unprocessed agricultural commodities • Common exports are Coffee, Tea, Cotton, Horticulture, Fruits and Vegetables
Regional Export Destinations • Common export destinations are Netherlands and Germany
Regional Industries- 2007 *Source: CIA World Fact book (2004 – 2008)
Regional Balance of Trade • Negative balance of trade due to excessive imports *Sources: British Chamber of Commerce Country Profiles (2002 – 2003) & CIA World Fact book (2004 – 2008)
Comparison of Regional & Select Country Balance of Trade • In contrast, Southeast Asian countries register positive & increasing balance of trade due to increased export of high value finished products
Challenges faced in EAC Region • Post-harvest losses are very high • Exports are mostly raw materials • Lack of financing • Lack of highly skilled workers • Importation of basic goods & services • Limited indigenous technology base • Low levels of entrepreneurship
VALUE ADDITION • The state of our economies require, as a matter of priority, that we focus on value-addition. • This requires addressing several necessary conditions (e.g. TT). • The guiding principle is the concept of the “Product Value Chain” which must be understood and adhered to.
FACILITATORS ARE SALES PERSONNEL LOCAL MARKETS FINANCE MICROFINANCE, BANKS, ETC. RESEARCH (e.g. NARO) C O N S U M E R PRIMARY PRODUCT FARMER/FARM H A R V E S T MARKET LOGISTICS VALUE ADDED PRODUCTS TRAINING & EXTENSION SERVICES RESEARCH (FOOD SCIENTISTS) FARM INPUTS (SEED, FERTILISERS ETC. TECHNOLOGY (FARM IMPLEMENTS) EXPORT MARKET TECHNOLOGY FOR AGROPROCESSING (Add Value) Facilitators Are EPB; AGOA, etc. The Product Value Chain Post harvest loss
Modern Photography Modern Photography Pin Hole Camera Pin Hole Camera 35 mm Camera 35 mm Camera Digital Cameras (Kodak DCS-100) Digital Cameras (Kodak DCS-100) 1727 107 yrs 1834 157 yrs 1991 1727 107 yrs 1834 157 yrs 1991 Timelines for Technology development • Photography Modern Photography Modern Photography Modern Photography Modern Photography Modern Photography Pin Hole Camera 35 mm Camera Digital Cameras (Kodak DCS-100) 1727 107 yrs 1834 157 yrs 1991
Vacuum tube diode 1904 43 yrs Transistor 1947 Timelines for Technology development • Transistor was invented in 1947 and commercialized in 1953 (6 years later)
Consideration for effective TT • Operability of the technology in the intended environment • Infrastructure to sustain the technology • Availability of skills • Maintenance and suitability of raw materials • Intellectual property rights • Policies and other political, Social and cultural issues
R & D Institutions E N T R E P R E N E U R S H I P T E C H N O L OG Y SKILLS IMPROVEMENT COLLABORATION IN RESEARCH Processes R&D Skills Incubation Innovations Products University and Higher learning Institutions Technical and Tertiary Institutions MANPOWER AND ADVISORY SERVICES MANPOWER Industry (Private Sector) Collaboration between Institutions
WAY FORWARD • Invest in R&D and support R&D institutions • Establish science and technology academies • Reverse the brain drain • Invest in infrastructure that supports competitiveness • Establish TT regimes • Exploit the opportunities identified by Investment bodies • Joint trade missions • INVEST IN VALUE ADDITON!