EAC manufacturers urged to embrace e-commerce

Regional manufacturers have been urged to embrace electronic trading platforms (e-commerce) to widen their market reach and become more productive and competitive. The experts said embracing such innovations will help reduce the cost of production and enhance the sector profitability.
Employees of Hippo, a local firm that makes roofing materials. (File)
Employees of Hippo, a local firm that makes roofing materials. (File)

Regional manufacturers have been urged to embrace electronic trading platforms (e-commerce) to widen their market reach and become more productive and competitive.

The experts said embracing such innovations will help reduce the cost of production and enhance the sector profitability.

 

According to Dr Mukhisa Kituyi, the United Nations Conference on Trade and Development (UNCTAD) Secretary-General, e-commerce is an instrumental and innovative tool for promoting industrialisation and trade across the region.

 

Kituyi was speaking during the ongoing EAC Manufacturing Business Summit and Exhibition in Kigali on Tuesday. The three-day summit brought together more than 500 participants,  including business leaders,  experts and policy-makers, to discuss mechanisms to bolster regional industrialisation.

 

Kituyi said manufacturers should take advantage of the immense opportunities presented by e-commerce platforms to enter new markets, create awareness about their products and drive sales to improve profits.

The UNCTAD official observed that the economy today is being driven by digitisation, which makes it imperative for regional manufacturers to embrace e-commerce and tap into the untapped markets. This way the sector will be able to create more jobs and foster inclusive economic growth, he added.

Matthias Wachter, the in charge of the Federation of German Industries department of security and raw materials, encouraged industrial players to employ technology and e-commerce in all their processes to increase production and tap new customers. “This way, they will be able to easily penetrate markets and sell products at competitive prices,” he added.

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Habiyaremye at in his workshop located in Kayonza District last week. (Jean d'Amour Mugabo)

Reducing cost of production

Meanwhile, the business community has called on regional governments to invest more resources in areas that will further improve the business environment for manufacturers and other players in the regional economy.

Rwanda’s Private Sector Federation chairman Benjamin Gasamagera, said this is essential to make manufacturers more competitive and ensure the sector creates more jobs and is sustainable.

Manufacturers across the region have been complaining of high electricity and water charges, and poor infrastructure, which they say were eating into their profits and making the sector less competitive.

As a result, the sector has continued to contribute minimally to the bloc’s GPD despite its huge potential. Manufacturing added about 10 per cent to the regional GDP last year. In 2015, the East African Business Council (EABC) signed an agreement with the East African Manufacturers Business Membership Organisations, a move that was seen by experts as a step toward solving challenges facing industrialists in the region.

However, Lilian Awinja, the East African Business Council chief executive, said though the EAC region has been registering significant economic growth averaging 6 per cent over the past few years, the performance of the manufacturing sector is discouraging.

“The EAC manufacturing sector has been registering modest growth of 4.7 per cent and its contribution to the regional GDP has continued to shrink to less than 10 per cent,” she noted.

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Employees of Hippo stone coated tiles.

Buy-East Africa, Build East Africa initiative

The industrialists urged regional governments to prioritise EAC companies in public and private procurement, arguing that this will create necessary demand for locally-manufactured products.

It could also help support technology-based start-ups and boost the firms’ financial capacity.

Many of the participants rooted for the Buy-East Africa, Build-East Africa campaign to strengthen the local content initiative.

They argued that this is one of the ways to ensure EAC industries grow and thrive and hence create more jobs as well as help increase households and reduce poverty.

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