Monday, 10 September 2012

Rwanda : East African Community Launches New Fund To Boost Her Economy

home magazineTrademark logo 300x197 Rwanda :   East African Community launches new fund to boost her economy
The five countries of the East African Community (EAC) have launched a regional investment fund called “Trade Mark East Africa Challenge Fund” (TRAC) aiming to support economic development in these five countries.

The commencing capital for the fund is $7.5million, a capital claimed to be yet insufficient for the region to move towards an integrated economic and political entity that will deliver the sustainable and equitable economic growth needed to improve prosperity.
According to the Rwandan Minister of commerce and industry Francois Kanimba, the aim of this fund is to invest in innovative projects that can boost regional trade. With a population of 130 million, the EAC represents one of the fastest growing economic regions in the world, but there are still challenges for business to access this emerging market such as Non-Tariff-Barriers.
For a landlocked country like Rwanda, this trade mark challenge fund might be a good news especially to support businesses and civil society in coming up with new and smart ways to help trade in the region. Rwandans have been advised to step in this new opportunity as the fund will close in one month.
The Minister of trade and industry Francois Kanimba argues that late business proposals will not be funded. “We are advising people to quickly submit their proposals to the fund management, because it will not require a certain number of proposals for each of the five countries. Only the best will be funded”.
TRAC will be enabled to fund projects of up to $350,000 each. Starting with a capital of only $7, 5 million for the whole region, some business owners have already criticized the fund saying it has a small budget for five countries which are hungry of economic development.
As a response to this question, Mark Priesly, the Director of Trade Mark East Africa, said “This is the beginning; we will try to increase the budget in the near future”.
All the submitted projects are expected to compete for investment in three windows of funding; Business innovation that will increase trade. Innovative projects proposed by private firms that have the potential to boost cross border and international trade will be eligible for funding. Innovative projects that benefit large numbers of people and promote climate resilience and environmental sustainability will be given preference.
The second window is catalyzing innovation in services that can enable cross-border trade. This window is supposed to support service businesses that have developed innovative projects to reduce the cost of trade in East Africa.
The third and last window is Innovative ways of gathering evidence and mobilizing public opinion. This intends to incentivize strong coalitions to be built between private sectors and civil service organizations across the East African Community that can gather evidence of the way barriers to trade harm the public interest and mobilize public support for reforms that will lead to greater trade and regional integration, particularly those able to use new social media.
According to TMEA officials, TRAC will use a transparent, competitiveness process to invite project proposals. It solicits proposals through media advertising targeting businesses and through direct contact with businesses.
A simple on-line registration process results in an application form and guidance notes being made available to applicants who are then given four weeks to submit a brief concept note on what they propose.
Short listed applicants are then given six weeks to prepare a full proposal. The fund management team will be at hand to guide applicants through the process of preparing proposals. They help to ensure that the contents of the bid are as pro-poor as possible and maximize benefits for women and the environment, the sponsors have through understanding of implementation issues, the M&E framework is sound and the bid contains information on costs and benefits to show the value for money it provides.
Proposals are submitted to an investment committee that decides on which projects TRAC will fund. The committee is made up of individuals nominated by (Trade Mark East Africa) TMEA for their knowledge of trade, business innovation and the political economy of the reform process.
Additionally, even if the economic development is being supported, numerous barriers to the free movement of goods and persons as envisioned in the ratified custom union and common market protocols remain. Regular meetings and conferences are being organized, but the problem still hinders the trade harmonization.


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