Governor differs with Minister on buy Uganda

March 24, 2017 in Markets, Policy, Trade & Industry by Editor

March 24–Uganda needs to implement a National Export Promotion Strategy which clearly indicates how the country intends to increase exports and narrow the country’s trade imbalance since international trade is vital for economic growth.

“We cannot pursue a development strategy which emphasises public spending and export promotion at the same time, because the two are not compatible. We need to shift focus from domestic spending so that producers produce products for export instead on non-tradeables,” Emmanuel Mutebile Tumusiime the Governor Bank of Uganda said.

Mutebile said the National Export Strategy and the Buy Uganda Build Uganda policy are simply not compatible since it is hard to envisage public policy which focuses on domestic absorption and ill-conceived protectionism units as a policy which can propel the country to improve on its export performance.

“Uganda gains a lot from the East African Countries customs protocol, but protection measures which advocate for the local consumption of local goods may distort and weaken the country’s export performance yet the country is already challenged in that sector,” he said.

Mutebile said, “A level playing field is important otherwise we may inflict on the other countries ad cause them to retaliate by coming up with similar injurious policies which will weaken our position further”

He was speaking at the Policy Workshop on Export Promotion and Local Content organised by the International Growth Centre in partnership with the Ministry of Trade, Industry and Cooperatives to enhance policy proposals advanced by the draft National Export Development Strategy and the Buy Uganda Build Uganda (BUBU) policy for Uganda to reduce on her trade deficit.

In his presentation, ‘Buy Uganda, Build Uganda’ in light of evidence on Export transitions and the Supply’ by John Spray from the University of Cambridge said enforcement of strict purchase rules for some firms, export restrictions and beggar-my-neighbour competition involving regional tit-for-tat protectionism policies have not worked for economies which have implemented a policy similar to that of BUBU.

He said instead Uganda should instead focus on building local content unit where buyers can identify reliable suppliers. Suppliers themselves can also identify what buyers want and also establishing a modern company database linked to tax data set which lists all companies and products in a given sector, because this are what have worked for countries which have implemented similar policies to BUBU.

Amelia Kyambadde, the Minister of Trade, Industry and Cooperatives however disagreed. She said already some economies have strategies like BUBU already in place and this has not affected markets consuming Ugandan products.

She said with a policy like BUBU in place, the country is encouraging its producers to ensure that they produce high quality products for home consumption.  “And once we have quality products at home, then we can qualify for the bigger picture since BUBU focuses on reducing barriers in trade by enhancing  competitiveness of local products,” she said.