Get new markets, businesses urged
Trade minister Amelia Kyambadde said this is the time for the private sector to also consider value addition to locally ...
KAMPALA - As countries shut borders to cut the spread of the coronavirus, the private sector has been urged to consider exploiting new export markets and new product lines within Africa and to negotiate contracts with their suppliers, especially those based in hard-hit overseas countries.
Trade minister Amelia Kyambadde said this is the time for the private sector to also consider value addition to locally available raw materials, such as animal skins and fruits, to substitute imports from Europe and China.
She urged the private sector to utilise the abundant fruits and skins and hides to make juices and leather products, such as bags, belts, and shoes.
She said as the world locks down due to the coronavirus pandemic, Uganda could use her competitive advantage in agro production to supply food to affected countries and open new trade lines in Europe, Asia, and the Americas.
Due to the pandemic, some markets are experiencing the worst financial plunge since the 2008 financial crisis, as the human cost of the outbreak continues to rise. The economic cost continues to mount as well.
"It is time to think outside the box. Persistence of the pandemic may constrain sourcing of machinery and final consumables for traders, which will hinder buying and selling.
This presents an opportunity for locally produced consumables," Kyambadde said.
"We need to be flexible and work on changing our mindsets. This could be an opportunity to find new routes, new suppliers and even new markets within the Africa Continental Free Trade Area or Common Market for Eastern and Southern Africa (COMESA)," she explained.
Kyambadde made the remarks at a dfcu Bank customers' meeting at the Kampala Serena Hotel, to discuss the impact of the COVID-19 (coronavirus) outbreak on the global and local market.
During the meeting, a panel of experts weighed in on how Ugandan businesses will survive the global COVID-19 outbreak
Kyambadde pointed out that Uganda's imports, worth $5.51b annually could be substituted for local or regional produced alternatives.
She urged Ugandans who travel abroad for holidays to consider spending their dollars on local attractions in national parks. She also said Uganda's private sector should do more to exploit the Internet by going digital.
The dfcu Bank's chief executive officer, Mathias Katamba, said some of the bank's business partners are starting to feel the effect of the outbreak, considering China's position in the global supply chain.
"In the financial sector in Uganda, we are yet to feel the actual effect, but we know that some of our partners in the hospitality, tourism, logistics, and aviation sectors are quickly feeling the impact," he said.
"It is estimated that the worldwide aviation industry will lose up to $113b this year. As the crisis disrupts global value chains, which are essential for economic growth, there is need for companies to focus on preparedness and response to risk," he added.
Francis Kamulegeya, the managing partner at PricewaterhouseCoopers, advised businesses to demand policies that will work from key stakeholders, such as the Government, Uganda Revenue Authority (URA) and banks. Shilling could depreciate Godfrey Mundua, the dfcu head of corporate banking, said during times of uncertainty, there is a tendency for international investors to look for safe havens for their money.
Consequently, he said, the shilling is likely to dollars. He noted that the full effect of the coronavirus is likely to be felt around May when most traders begin to grapple with stockouts.
Ramathan Ggoobi, an economist at Makerere University Business School, said the Government has been slow to implement policies that would have shielded the economy from global shocks.
Everest Kayondo, the Kampala City Traders Association (KACITA) chairperson, said prices are likely to shoot up due to the shortages in the global supply. He urged URA to be mindful of the difficult business conditions, even as they strive towards high tax collection targets.