ARUSHA - Finance Ministers, Central Bank Governors and Chief Executive Officers of leading companies in East Africa have called for reduced dependency on foreign aid, as a means of effectively handling the surging global financial crisis in the region.

The business community was attending a meeting organized by the East African Business Council (EABC) yesterday in Arusha, Tanzania. It was aiming at mapping out strategies on how the current financial crisis can effectively be handled by East African countries. 

They said the crisis will be managed if countries continue implementing tax reforms aimed at improving domestic resource mobilization, which they said will in turn increase government capacity to finance national budgets.

However, the leaders said the reforms must have a complementary outcome with the objective of increasing productivity, consumption and capital creation through having new investments in place.

"Over the years, we have resorted to dependency on economies of the developed world without knowing the dangers of that dependency,” remarked Reginald Mengi, the EABC Chairman.

He added that East Africans have never been and will not be beneficiaries of economic prosperity of the donors, but will be victims of their economic meltdown. 

Jeremiah Sumari, Tanzania’s deputy minister for finance and economic affairs said that there is need for governments to intensify efforts in improving the investment environment in the region in order to attract capital to foster economic growth and increase capacity to respond to the onslaught of the externally generated shocks of the crisis in the EAC. 

The business managers also called for formation of a joint crisis management team at the EAC leadership level, to ensure that the region comes up with harmonized solutions which will not distort the regional market.

They challenged EAC policy makers to ensure government spending is channeled towards sectors of higher priorities that will serve as a stimulus to the economies.

The EAC Deputy Secretary General (Finance and administration) Julius Tangus Rotich said that given the present high food demand in China and India, partner states should address the productivity of agriculture and improve the infrastructure that supports the supply chain.   

The credit crunch currently affecting major economies has rapidly evolved into a global credit crisis resulting into a number of bank failures and declines in various stock indexes, and commodities worldwide.

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