Private sector seeks solutions to global economic recession
Feb 17, 2009
WITH only 10 months to go before all goods trade freely within the East African Community (EAC), the private sector is still grappling with lack of capacity to trade within the region.
By Sylvia Juuko
WITH only 10 months to go before all goods trade freely within the East African Community (EAC), the private sector is still grappling with lack of capacity to trade within the region.
This comes against a backdrop of the looming impact of the global economic crisis that will impact negatively on the private sector.
While goods have been enjoying a tariff-free regime within the EAC since 2005, Kenyan goods pay a diminishing interim duty for five years to take care of concerns that Kenya was more developed. However, this period expires in 2010.
There was consensus at a chief executives’ consultative forum on improving Uganda’s competitiveness that the private sector needs to become more pro-active by advising the Government and supporting small and medium enterprises (SMEs).
“While its trade capacity diminishes, most of the SMEs suffer internal constraints like inefficiency in production, non-existent books of accounts and limited management skills,†noted Lamin Manjang, the managing director of Standard Chartered Bank.
“Internal limitations reduce competitiveness of SMEs, which in turn reduces that of large enterprises and eventually Uganda’s trade capacity within the region,†he noted during the forum organised by the Private Sector Foundation.
The private sector is grappling with infrastructure challenges, which have pushed up costs of doing business. The cost of finance and ease of doing business are other challenges.
Leading industrialist, James Mulwana agreed, noting that that unless the private sector improves its trade capacity, the country was at risk of becoming a supermarket
“Donors and the Government have given us support. It is up to us to utilise that and become a player and not a supermarket for other countries in the region.â€
With a raging global economic crisis that is affecting Uganda’s trade partners, leveraging on its competitive advantage to supply the region has become more urgent for Uganda’s private sector.
“The private sector has been relaxed about the global crisis but it’s with us now. If we organised forums just to talk, that was last year, it can’t work this year. We have to be pro-active, otherwise we won’t to find opportunities because we haven’t yet built capacity to confront this crisis.â€
Mulwana suggested a reduction of Value Added Tax for companies setting up shop in rural areas to add value to agro-produce for export to the region.
Patrick Bitature, the chairman of the Uganda Investment Authority, said: “We should see how to help farmers build storage capacity like silos, improve production and marketing so that their business is sustainable and not vulnerable to price shocks. This will help them plan beyond a season.â€
WITH only 10 months to go before all goods trade freely within the East African Community (EAC), the private sector is still grappling with lack of capacity to trade within the region.
This comes against a backdrop of the looming impact of the global economic crisis that will impact negatively on the private sector.
While goods have been enjoying a tariff-free regime within the EAC since 2005, Kenyan goods pay a diminishing interim duty for five years to take care of concerns that Kenya was more developed. However, this period expires in 2010.
There was consensus at a chief executives’ consultative forum on improving Uganda’s competitiveness that the private sector needs to become more pro-active by advising the Government and supporting small and medium enterprises (SMEs).
“While its trade capacity diminishes, most of the SMEs suffer internal constraints like inefficiency in production, non-existent books of accounts and limited management skills,†noted Lamin Manjang, the managing director of Standard Chartered Bank.
“Internal limitations reduce competitiveness of SMEs, which in turn reduces that of large enterprises and eventually Uganda’s trade capacity within the region,†he noted during the forum organised by the Private Sector Foundation.
The private sector is grappling with infrastructure challenges, which have pushed up costs of doing business. The cost of finance and ease of doing business are other challenges.
Leading industrialist, James Mulwana agreed, noting that that unless the private sector improves its trade capacity, the country was at risk of becoming a supermarket
“Donors and the Government have given us support. It is up to us to utilise that and become a player and not a supermarket for other countries in the region.â€
With a raging global economic crisis that is affecting Uganda’s trade partners, leveraging on its competitive advantage to supply the region has become more urgent for Uganda’s private sector.
“The private sector has been relaxed about the global crisis but it’s with us now. If we organised forums just to talk, that was last year, it can’t work this year. We have to be pro-active, otherwise we won’t to find opportunities because we haven’t yet built capacity to confront this crisis.â€
Mulwana suggested a reduction of Value Added Tax for companies setting up shop in rural areas to add value to agro-produce for export to the region.
Patrick Bitature, the chairman of the Uganda Investment Authority, said: “We should see how to help farmers build storage capacity like silos, improve production and marketing so that their business is sustainable and not vulnerable to price shocks. This will help them plan beyond a season.â€