Uganda finalises plan to be a member of COMESA Free Trade Area
The business community in Uganda wants to expand the market of its products and services by enlisting partners across the Common Market for Eastern and Southern Africa (COMESA). There is no other option. With a shrinking traditionally important market in Europe thanks to the Euro-Zone crisis, private sector players in Uganda see regional markets as the last resort; if they are to remain in business.
Speaking at a media breakfast ahead of the 8th COMESA Business Forum - an annual public private dialogue and business partnerships forum due in Kampala next week - Gerald Sendaula, the Private Sector Foundation Uganda (PSFU) chairman, said it is critical that Uganda identifies and nurtures business partnerships across various regions and that the Ugandan business community benefits from the experiences of their counterparts on overcoming challenges facing Small and Medium Scale Enterprises (SMEs). PSFU is co-hosting the high profile forum together with the COMESA Business Council.
"This business forum is timely as it will present a unique opportunity to the business community in Africa; to examine the challenges they face and therefore identify solutions," said Ssendaula.
The three-day meeting comes at a time when African countries are putting a lot more focus on the development of SMEs for economic growth. It will bring together more than 500 of Africa's top business leaders, international businesses and regional policy makers under one roof to engage on common agendas that support business interests in the COMESA region.
The Forum, which will be held alongside the 16th COMESA Heads of State Summit, provides a key platform for private sector players to meet and interact with key policy makers from the 19 COMESA-member countries. The forum is under the theme, Enhancing Intra-COMESA Trade through SME Development; Seizing opportunities for Innovation and Prosperity in Business.
The theme is a reflection of the importance being attached to the role of SMEs in spearheading development in Africa as they account for more than 90% of all firms outside the agricultural sector. Also, SMEs constitute the main source of employment and generate significant domestic and export earnings. Consequently, SME development is recognized as a crucial tool in poverty reduction efforts, according to Ssendaula.
At the event, delegates are to discuss a wide range of issues that are pertinent to entrepreneurship and the private sector in the region. As a way to build partnerships and enhance networking, the event will have parallel networking activities including a trade exhibition, an SME-oriented business bazaar and a gala night dinner plus business tours.
The event presents an excellent opportunity for the business community as well as policy makers and implementers across the COMESA region to critically look at the various advancements made and the opportunities available for SMEs to boost trade and investment within sectoral clusters, and industries in the region, officials said.
Ssendaula said African governments would ignore SMEs at their own peril as they comprise over 90% of African business operations and contribute to over 50% of employment in the region. Yet, the SME sector in Africa is still facing a number of daunting challenges that are hindering it from making healthy contributions to the economic growth of various African nations including Uganda.
Responding to the private sector's request for membership in the COMESA Free Trade Area (FTA), Amelia Kyambadde, the Trade and Industry minister, said the plan is in its final stages and would be concluded in "a matter of days."
The COMESA FTA, the first of its kind in Africa under the African Union, was launched in 2000 with nine Member States. Membership in the FTA now stands at 13 countries, which are trading on a full duty free and quota free basis. Uganda, along with the other five countries at various stages of joining the FTA. The FTA has been credited for boosting intra COMESA trade, increasing it by nearly six-fold from $ 3.1 billion in 2000 to $17.4 billion in 2011.
By hosting the meeting, Uganda hopes to revive and consolidate her gains from the COMESA region, which comprises a large market of about 300 people. The country's exports and imports to and from COMESA have generally indicated an increasing trend over the past four years. However, Uganda's re-export portfolio to her COMESA partners has declined from $61 million in 1997 to just $18 million in 2002. Additionally, intra-COMESA exports declined to $80.8 million, down from a massive $938 million in 2001. Membership in the FTA is seen as an opportunity to move towards the volumes of the late 1990s.
Uganda, which experts say could be the 'food basket' of the COMESA region, has its competitive advantage in agriculture, which supports 80 percent of the population. Uganda has potential to be one of the biggest suppliers of food stuffs as well as commodity products particularly coffee, fish, tea, tobacco and cotton. Uganda is also in discussions to be part of a 26-member Tripartite FTA involving COMESA, EAC and SADC.
At the forum, special focus will be on addressing private sector needs for increased trade and investment, on boosting intra-Africa trade particularly of African products, facilitating business mobility for enhanced trade; smart investments, smart partnerships; governance, advocacy, accountability and transparency.
The forum will discuss ways of involving the youth into enterprise development and provide a platform for young entrepreneurs to present and sell their business ideas and share success stories from Eastern and Southern Africa.