Ugandan Exporters Cut Niche Into Neighbours' Markets. Check it out:
(The Monitor (Uganda) Via Thomson Dialog NewsEdge) STRINGENT requirements for market access in the European Union have forced most Ugandan exporters to shift their attention to neighbouring markets underscoring the importance of regional trade.
Requirements like the Euregap, the need for Corporate Social Responsibility, environmental consciousness, high costs of transportation including air freight and security surcharges have forced exporters to exploit less stringent market like the East African Community (EAC) and the Common Market for East and Southern Africa (Comesa). The move has seen African regional markets become increasingly competitive compared to the lucrative European market.
"People have begun to understand the benefits of trading with the next-door neighbour especially as market access conditionalities for trading with stiffer markets like the EU continue to bite," Ms Florence Kata, the Executive Director of the Uganda Exports Promotions Board, said in an interview with Business Power last week.
According to UEPB records, the EAC as a component of Comesa has been running neck-to-neck with the EU in market share, once Uganda's leading export market.
In 2004, Comesa commanded 26 per cent of the total $653 million (Shs1.1 trillion) export earnings and EU led with 27 per cent. In 2005, Comesa and the EU both stood at 31 per cent each of the total $812 million (Shs1.4 trillion) export earnings for Uganda.
With over 300 million people, the regional trade could spur much needed growth in the form of increased trade returns, job creation, support for Small and Medium scale Enterprise and the branding of products as East African, especially in the central, eastern and southern Africa, a region with the most economic hardships in the world.
"We are working to see that EAC positions itself as a single unit against the rest of the markets.
The initiative that we are having in place is to try to identify and standardise to some degree a range of export products," Kata said.
To achieve this, the East Africa trade promotion agencies are soon launching an EA export.com e-commerce portal, where they have agreed as member countries to select products, which can compete favourably in other bigger markets like the EU.
Kata said that they have also embarked on training trainers who will train producers in selected sectors.
"We want a scenario when you get a fish that is coming from EA, it generally has the same characteristics and properly packaged. Even at the Bureau of Standards we have harmonisation of standards at the region level," she said.
A further effort in Uganda, said Kata, is to establish an export school - the Uganda Export Development Centre - to equip exporters with market skills that are internationally recognised.
The Dutch and the Japanese governments have been in the forefront in funding training for export purposes. Kata said that regional security, however, must be sustainable for any meaningful regional trade to prevail. Political stability in the DR Congo, Southern Sudan, Burundi and Rwanda would boost regional trade as more people would begin to move freely from one country to another.
Government's role
Government has played a key role through several interventions to improve production, productivity, marketing, trade and encourage value addition and a total fund of Shs9 billion (Bonabagaggawale) has been set aside in the 2006/7 financial year to cater for these needs.
These strategic actions will be focused on the needs of the household using the sub-county as the operational center for delivery of the respective programmes.
The strategy will be implemented by deliberately engaging more households in gainful production enterprise by re-orienting the role of sub-county chiefs and production personnel at the Sub-county level to undertake community mobilisation.
"We in exports believe when you have organised production today, it should be benchmarked against international standards, so if you are going to produce your potato or pineapple, organise the poor people that you seek to become rich to produce a pineapple that is internationally saleable and therefore locally consumable.
So we shall use the domestic market just as a stake towards internationalising of the market. In that process you are creating a framework for a massive growth towards an export led economic," Kata explains.
Research is the other initiative of intervention that has been put in place by agencies like UEPB, NAADS.
Research is increasing and a lot is happening between Makerere University and the Uganda Industrial Research Institute in terms of being their scientific center for helping the country beginning to add value, importing technology prototypes and customise them at the local level.
Distributed by AllAfrica Global Media. (allafrica.com)
Copyright 2006 All Africa Global Media
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