By John Oyuke

East African Community (EAC) member states have been petitioned to consider sovereign bonds to upgrade their ailing infrastructure.

Tanzania Prime Minister Mizengo Pinda said improving infrastructure could help unlock the region’s economic space.

Mr Pinda said the bonds should be guaranteed by governments of the partner states to attract domestic and international investors.

He said EAC countries have no choice but to aggressively search for financial resources to transform their respective economies.

The PM reckons there is enough proof to show there are adequate domestic resources available in the region, which can be mobilised if adequate incentives are offered to investors.

Pinda was speaking at a High Level Stakeholders’ Forum on implementation of a fully-fledged Customs Union in Arusha, Tanzania.

He said the region needed enormous resources to upgrade its infrastructure, especially key road links.

He said EAC has agreed with African Development Bank to undertake a feasibility study for modernising major road links in the region.

The EAC comprises Kenya, Uganda, Rwanda, Burundi and Tanzania. Speaking during the forum, EAC Secretary General Juma Mwapachu asked the PM to make good his promise to accelerate review of Tanzania’s capital account conditions to ease investments.

The proposed reform would enable free inflow and outflow of capital that can help develop intra-business with regional partners.

Freeing capital controls

He said with the planned onset of the Common Market, liberalisation of Tanzania’s capital account would give the country much-needed stimulus to develop her economy.

Capital account liberalisation is the process of removing restrictions from international transactions related to the movement of capital.

This includes the removal of controls on domestic residents’ international financial transactions and on investments in the home country by foreigners.

Mwapachu said Tanzania’s capital account conditions block broader participation of Tanzanians in the East African capital market.

Mid this year, an economist in the Directorate of Economic Policy at the Bank of Tanzania, the country’s central bank, cast doubt on any plans by the country to undertake further liberalisation.