The East African Business Council (EABC) has launched the EAC Small and Medium Enterprises (SMEs) online platform to ease access to cheap and affordable finances from the available capital in the region.
According to John Bosco Kalisa, the EABC Chief Executive Officer, the level of regional intra-trade is low and there is a need to negotiate better.
Kalisa says that the region is blessed with the unveiling of Equity Bank’s $6b SME fund and $1b from Afriexim Bank and the joining of the Democratic Republic of Congo (DRC) into the East African Community.
“Our role as EABC will be to coordinate SMEs focal points across all the 6 partner states in the region hoping to double opportunities created by the African Continental Free Trade Area (AfCFTA) to benefit from over 130 million people in the region,” he explained during the launch of the EABC portal at Hotel Africana last week.
However, Kalisa acknowledges that there are numerous challenges facing SMEs in the region despite the fact that 90% of the SMEs play a vital role in the livelihoods of the people.
The East African Business Council (EABC) has launched the EAC Small and Medium Enterprises (SMEs) online platform to ease access to cheap and affordable finances from the available capital in the region
According to Kalisa, The EAC Vision 2050 articulates the dreams and aspirations of the East African peoples and makes a commitment to what they will do to achieve these dreams.
“More importantly is to support SMEs as we engage into AfCFTA to look at the level of preparedness of our SMEs to take advantage of the wider market of about 1.3b people with a combined GDP of around $3.4 trillion and the SMEs need to be the central driver,” he added.
According to Geraldine Ssali, the Permanent Secretary Ministry of Trade, Industry and Cooperatives, in a message read by Stephen Mbogo Kirya, the Ag Asst Commissioner, government is in collaboration with other Ministries, Departments and Agencies (MDAs) and Development Partners to implement programs that help the MSMEs improve their productivity and competitiveness all highlighted in the Vision 2040 and the NDP III.
“MSMEs are the engine of growth for the economic development and wealth creation of Uganda. They are spread across all sectors with 49% in the service sector, 33% in the commerce and trade, 10% in manufacturing and 8% in other fields,” she said.
According to Ssali, the growth and survival of SMES is not only crucial for the economy as a whole, but also for protecting the livelihood and well-being of a very large section of our people.
She said that the forum created by the EABC will resolve the problems of MSMEs pertaining to finance, raw materials, labour, regulatory permissions, etc.
“It will help MSMEs capture new opportunities including manufacturing of medical equipment and accessories like PPEs, masks and supply them in national as well as international markets and also identify and encourage MSMEs having potential - the ones who are able to withstand the current situation and can become national and international champions,” she proposed.
Ssali added that by providing the necessary support in Agro-Industrialisation, Manufacturing Programme and Private Sector Development Programme will boost MSMEs in value addition, agricultural raw materials, acquire appropriate technologies and linking them to markets for their quality agro-value added products.
“By supporting MSMES to create backward and forward linkages with big manufacturers for supply of quality raw materials and/or as off takers of the manufactured products by training SMES to sustainably lower their costs of doing business and build competitiveness and strengthening their organizational and institutional capacity to drive their growth.”
However, experts recommend that the taxation policy has to be inclusive with sufficient level of consultation with stakeholders and the beneficiaries because any change in the law has a serious repercussion on the sector.
John Kakungulu Walugembe, executive director at the Federation of Small and Medium Enterprises-Uganda (FSMEs) said that the region we can agree on the East African Community SME charter which has been dormant now we want to make sure that charter is actually implemented.
“Through this charter we can identify problems in the areas of access to finance, area of logistics, skills and internal capacity, the general rules of origin and harmonizing regulations around cross border trade. As we agree on the common program which is currently called the East African Community SME charter, we can be able to support SMES moreover this is in line with the Africa Union SME strategy which was put in place in 2019,”
In Uganda, over 2.5 million people are employed in this sector, which accounts for approximately 90% of the entire private sector, generating over 80% of manufactured output that contributes 20% of the Gross Domestic Product (GDP).