Low productivity wastes improving trading infrastructure

March 1, 2018 in Infrastructure, Investment, Markets, Trade & Industry by Editor

March 1— Amelia Kyambadde, Uganda’s trade minister, has asked East African Community (EAC) countries to increase productivity of high quality goods if they are to benefit from the improving trading infrastructure that is currently in place.

“We must clean our house. We cannot continue depending on donations. We must take advantage of all the facilities that are in place to trade more and improve our economies. This can only be possible if we improve the quality and quantity of our products,” Kyambadde said.

She was speaking at the opening session of the Trade Development Forum hosted by TradeMark East Africa (TMEA), the Nairobi-based non-profit consultancy that channels the bulk of foreign donor money that goes into improving the EAC trading infrastructure.

Kyambadde said the international community and EAC governments have invested considerably in setting up structures and systems that facilitate trade. However the region is not seeing more substantial returns, because countries are not producing enough quality products to export

She said in spite of the heavy investment, there has been a 19.5% decline in intra-regional trade from $55.4 billion in 2015 to $44.6 billion in 2016.

The two day forum which is being attended by trade representatives from different EAC countries and officials from trade facilitation companies and countries is aimed at looking at the achievements seen in the last seven years since TMEA entered the picture. Discussions will also focus on finding solutions to several problems that are hampering trade in the EAC. TMEA is currently in its second phase of operations ending in 2025.

Ali Mufuriki, the Chairman Board of Directors at TMEA said all the money TradeMark has invested in East Africa has already yielded positive results by removing bottlenecks, however the focus now should be on how to take advantage of the more conducive environment.

“We saw gains in reducing the time and cost to move a container from Mombasa to Kigali. We must now address the constraints of containers moving from one country to another empty,” Mufuruki said.

He said it is urgent to focus on industrial productivity to help the private sector do better. “Only 2% of the market share on the global market is shared by the entire Africa while Europe takes 60%. Africa also only utilises 12% of trade with in itself. This signifies low production and trade by African countries which is the reason why it is still lagging behind,” Mufuruki said