Trade experts are increasingly calling on countries like Uganda to look at markets beyond their borders if they are to achieve significant economic growth.
This week, Regus, which describes itself as the world's largest provider of flexible workplaces, released a report that showed that countries would earn more if they paid closer attention to foreign markets.
A statement from Regus notes that its latest survey "gives the thumbs-up to outwardly focused business strategies and suggests that Ugandan companies with links to China and other BRIC nations are particularly well positioned."
The report says "50 per cent of global firms that export say they have increased profits over the last 12 months compared with 38 per cent of companies that only trade domestically."
Nearly 60 per cent of exporting companies said their revenues had grown compared with 37 per cent of firms focused domestically. These findings tally with suggestions from the World Bank. Last week, the World Bank launched a report, Uganda Economic Update: Bridges across borders; Unleashing Uganda's Regional Trade potential, that pointed out that companies will develop a deeper understanding of global market trends if they explored beyond the borders.
"If it [Uganda] develops an increasingly outward orientation, this will allow its firms and farms to make better choices regarding what to produce, how to produce it, how much to produce and what inputs to use," notes the report.
The bank believes Uganda's location offers it tremendous opportunities to grow its economic potential.
"Uganda is a land bridge for the rest of the great lakes region, connecting a number of landlocked countries to the coastal countries," the report says. "This can enable the country to expand its trading space by almost 50 per cent if the near markets of South Sudan, DRC, and the Congo Democratic Republic are included."
However, to realize its potential, Uganda - and its neighbours - must agree to remove trade barriers, the World Bank advises. "Uganda has the potential to earn an extra $2.5bn by removing trade barriers in an effort to close the trade deficit in the next five years," notes the report.
Amelia Kyambadde, the minister of Trade, Industry, and Cooperatives, says government is focusing on reducing all the trade obstacles.
"Government is focusing on improving the business environment. We are, for instance, subsidizing with Shs 150 per litre for transportation of fuel through the southern route [through Tanzania] during the Kenyan elections."
The World Bank report also advises Uganda not to lose her position as the food basket in the region.
"On the basis of these advantages, the country can achieve further export diversification through the development of a range of agricultural exports," it notes.