Although full implementation of the African Continental Free Trade Area (AFCFTA) started on January 1, 2021, local beverage manufacturers have not exported a bottle, largely because they are not yet ready for such a bold move.
Squeezed by the Covid pandemic, the manufacturers say the sector has suffered immense financial strain, and can only be ready at a future time, after a dependable solution to contain the pandemic has been found.
Morgan Bonna, the secretary-general of the Uganda Water and Juice Manufacturers Association, said presently, the entire continent is experiencing disruptions in the logistical supply and distribution chain, making business costly.
“At the moment, fuel prices have shot up, airfare is high and we don’t have a reliable railway service to move our products across the markets. Until the issue of the pandemic is settled, I don’t see any beverage manufacturer looking at the continental market,” he said.
Full implementation of the continental market means nationals of the 54 African states can freely move their capital and natural persons across the states for business.
The arrangement, according to experts, is expected to enhance competitiveness, promote industrial development, through diversification and regional value chain development, and foster sustainable socio-economic development and structural transformation of the region.
The arrangement is also expected to boost intra-African trade by approximately 52.3%, through elimination of import duties and reduction of non-tariff barriers, which hitherto are faulted for the paltry activity on the estimated $3.4 trillion continental market.
Bonna said although AfCFTA is a perfect opportunity for African countries to diversify their exports, accelerate growth and attract foreign direct investment, Covid-19-related challenges are making it hard for business to thrive all over the globe.
According to the public affairs and communications director at Coca-Cola Beverages Africa in Uganda, Simon Kaheru, local beverage manufacturers are not yet fully prepared for the continental market.
He said: “We still have a lot of opportunities to capture locally.
At Coca-Cola, for instance, we are working hard to develop a viable local raw material supply chain. We believe in the opportunity to make it big on the continent, but that will only happen if we first make it big at home, by building a robust supply quality.”
The Uganda Manufactures’ Association executive director, Daniel Birungi, said for Uganda to effectively benefit from the AFCFTA, it must examine its current ease and readiness to export.
He said for some time, the biggest challenge faced by manufacturers and members of the private sector has been the complications surrounding accessing foreign markets.
He said government must also stretch out its hand to help struggling manufacturers, because they have been hit hard by the effects of the Covid-19 pandemic.