Three land-locked EAC Partner States(Burundi, Rwanda and Uganda) continue to face a number of challenges that are a stumbling block to export promotion. Areview of the exports and imports trends shows that the region imports more than it exports to the rest of the world.
These constraints affect both the demand and supply side of the export sector.
The supply side constraints include; poor infrastructure and high cost of inputs, unfair competition due to dumping and selling of sub-standard items in the regional markets, low uptake or diffusion of technology, limited application of intellectual property rights, limited availability and high cost of export finance, bureaucracy and red tape, inadequate exporting skills, delays in customs clearance and increased handling charges, low research and innovation, limited capacity for diversification and low value addition and exchange rate volatility.
The demand side constraints include; stringent and changing market entry requirements, limited market intelligence, increased competition in key markets arising from globalisation, tariff peaks and tariff escalations in developed markets, non-tariff barriers, production subsidies in developed markets, increasing role of lobby groups to set market conditions, immigration requirements especially for exports of services that require movement of persons, among others.
What can be done?
Special focus should be given to potential priority products for each country. A large number of studies have been undertaken over the years in the three countries analysing potential exports, usually with a focus on non-traditional exports.
In each country, there are on-going programmes of support either at the generic level such as support to Chambers of Commerce or Export Boards, or sector specific assistance such as for horticulture, fish or coffee.
For Uganda, the priority products range from fish fillets and other fish meat, minced or not, fresh or chilled, cut flowers and flower buds for bouquets and ornamental purposes, coffee, not roasted, not decaffeinated, dairy products, ginger, sesame seeds, vegetable saps and extracts, tobacco unmanufactured, partly or wholly stemmed or stripped and cotton.
There have also been indicators for Uganda to have additional priority products like honey, mushrooms, horticulture products other than flowers like fruits and vanilla beans.
While Rwanda’s priority products are coffee, tea, hides and skins, cut flowers, pyrethrum, pepper, edible fruits and nuts, potatoes, (uncooked/cooked by steaming/boiling in water, frozen), avocados, natural honey, handcrafts and tourism, among others.
For Burundi priority products include coffee, (not roasted, not decaffeinated), gold in unwrought forms non-monetary, black tea (fermented and partly fermented) raw sugar, cane, tungsten ores and concentrates, goat or kid hides and skins and raw cotton, among others.
Again while positioning EAC land- locked countries as competitive and dynamic export-led, much attention should focus on; first of all promoting the production of diversified and high value exports from Partner States through coming up with appropriate regional structures to encourage sharing and adoption of technology for production, and availing affordable finance for investment for export diversification.
Second would be increasing market access to third-party countries through trade negotiations with key strategic partners like exporting firms that are able to meet the required standards.
Thirdly, reducing cost of doing business in the three Partner States for improved competitiveness, mainly through upgrading and improving regional physical transport infrastructure to reduce the cost of trade, reduction in cost of power and total elimination of NTBs.
Last but not least strengthening the capacity of export related institutions to engage in export promotion activities
With these policies in place, the three land-locked states will register economic growth and development through increased foreign exchange earnings, favourable balance of trade, reduced foreign debt, creation of employment in the export sector and increase in export market share.
The writer is Head of Economic and Productive Sectors at the Ministry of EAC