WALKING THE TALK ON DRIVING EXPORTS

A few weeks ago our officials and businessmen trooped to the Democratic Republic of Congo(DRC) to announce Uganda to the newest member of the East African Community (EAC), in a series of meeting held in Goma, eastern DRC and in the capital, Kinshasa.

We would be amiss if we did not look covetously at our only western neighbour’s vast bounty of natural resources, 90 million population and $60b economy and want to position for the opportunity.

"The way we have seen opportunities go begging in Southern Sudan and even Somalia, where we have contributed in their stabilization with blood, sweat and tears, can very well be replicated in DRC. It is not automatic that because we are their neighbours and that we have historical trade links we will be the biggest beneficiaries of the entry of DRC into the EAC.

Previously government has been content to let our businessmen sink or swim in foreign lands. If there are businessmen who have made an impression abroad it has been largely due to their won effort. Hopefully with last week’s meeting in DRC government is beginning to understand what its role has to be in supporting its businessmen to make inroads in foreign markets.

This is an important discussion. With a population of under 50 million, we do not have a big enough market to support a credible industrial base that can employ our people and raise living standards all around. We need to reach beyond our markets to support our planned industries.

The EAC is a good start. But government needs to be more deliberate in helping our businessmen penetrate even our neighbour’s markets. To feed those markets our businessmen will have to expand their production capacities, which will create more jobs not only in the factories but along the whole value chain.

We need not reinvent the wheel. The South East Asians did it in the second half of the last century and are now the world’s biggest exporters, all this on a natural endowment base that does not hold a candle to our own natural endowments.

It did not happen by mistake. At the time their planners determined that they must export to survive they were plagued with the same issues are we are now poor, unskilled, fast growing populations that were a ticking political time bomb if not put to good use.

They too started by aggregating their markets, using that as a launch pad for their products into the world.

"But the more successful countries went a step further. In negotiating market access, providing transport and communication infrastructure, concessional funding to business targeting foreign market among other things....

Bringing those learning here, how would we help our businessmen penetrate the DRC market?

As part of a national strategy to promote exports first to our neighbours and then beyond, we need to look at our current capacities and target markets where our products – food, cooking oil, cement, soft drinks, beer and plastics, can find virgin markets, in our case South Sudan and Eastern DRC and facilitate trade at a policy level, which policies will inform the nature of interventions to make in the targeted markets.

 

"Government’s plan to partner with DRC in building more than 200km of road network in the east of giant central African neighbour is a good start. But it is only a start...

Eastern Congo alone is more than twice the size of Uganda. In Uganda we have about 6000 km of paved road and we are not doing well. That’s just to show how 223 km in eastern DRC is a molecule in the ocean.

They have an extensive network of airfields however, so the two governments may consider how to upgrade these for interregional travel.

What businessmen have said is key too is some sort of export guarantee scheme. The way it works is based on the reality that to promote international trade, credit has to be allowed, an export guarantee scheme would allow our exporters some relief incase their deal goes south.

The trouble our traders have suffered in South Sudan should be a lesson. This is important because once credit is allowed a lot more business can be done and our businessmen can quickly expand their market share.

In addition, we need to facilitate the collaboration with financial institutions. Carrying wads of cash around only puts our businessmen at risk and increases the chances of fraud. What is taken for granted now in travelling to better countries is that you can deposit your money in Kampala and still go and transact in Europe or Asia. We should move quickly to make this possible in eastern Congo.  Maybe we can facilitate the mobile companies to do this for starters.

Many years ago I remember enjoying a Nile Special beer in Bunia, Eastern Congo. It was a sight for sore eyes. The only problem was there wasn’t much to go around before the bar run out and the entire had run out. New supply was not expecting more stock for a week.

There probably hundreds of opportunities going begging like that today.