Lack of Awareness Stifling Ugandan SMEs Access to Continental Trade Initiative

Lack of knowledge and awareness by Uganda’s small entrepreneurs could stifle access to the opportunities otherwise presented by the African Continental Free Trade Agreement (AfCFTA). The Agreement which took effect two years back is yet to see Ugandans benefit from it, according to business leaders and entrepreneurs, while some other countries have started venturing into trade under it. 

At a training organized by the East African Women in Business Program of the East African Business Council, together with GIZ, most women entrepreneurs hardly knew the AfCFTA and other initiatives of which Uganda is a member. Adrian Njau, the Trade and Policy Advisor at the EABC says this is one of the reasons that they decided to launch training, especially on how the entrepreneurs can use the provisions of the agreement to import or export. 

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The lack of knowledge is also attributed to either the lack of interest in doing simple research or the preference, especially Ugandan entrepreneurs, to work in isolation. For example, there were hardly any women entrepreneurs who had ever taken use of the national trade portals of the different countries in the region, which were created as an initiative of the EAC to make cross-border trade easier. 

This has meant that entrepreneurs have to withstand hardships in accessing the regional and continental markets. Regina Nakayenga, the proprietor of Rena Beverage Solutions, says the lack of knowledge on trade has affected business growth, giving the example of the knowledge on the availability of experts along the value chain. 

Because of this, she says, entrepreneurs are forced to operate across the value chain, from production, through process and distribution, to the consumer, which can be counterproductive. She asked the government to invest in this area as well as research.   

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However, Njau said that the little or no knowledge situation about the AfCFTA cuts across all African countries not only Uganda. He says it is important that SMEs, whether producing for the local market or exporting, should know that there is now a possibility of easily exporting beyond the EAC. 

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Some countries have started trading under AfCFTA an initiative under an initiative called the Guided Trade Initiative (GTI) which was launched in Accra, Ghana on 7 October 2022. It seeks to allow commercially meaningful trading and test the operational, institutional, legal, and trade policy environment under the AfCFTA. 

However, Uganda is not part of this. The eight countries participating in the GTI are Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia and represent five regions of Africa.  

“The products earmarked to trade under this initiative include ceramic tiles, batteries, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits, and sisal fiber, among others, in line with the AfCFTA focus on value chain development,” says Secretary-General of the AfCFTA Secretariat, Wamkele Mene. 

However, Njau says even Uganda and other countries that are not part of the GTI can still trade because the EAC Tariff guides were submitted and accepted at the AfCFTA Secretariat. 

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The products earmarked to trade under this initiative include ceramic tiles, batteries, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits, and sisal fiber, among others, in line with the AfCFTA focus on value chain development. 

Other countries that have met the requirements and deployed the AfCFTA E-Tariff Book and the Rules of Origin Manual and have officially published their tariff rates and have had them approved by the Secretariat—will also be able to take part in the Guided Trade Initiative. 

At least 96 products will be traded under the GTI and the initiative will be reviewed annually to expand the list of countries.  Lamech Wesonga, the Economic Policy Advisor at the GIZ East Africa, said AfCFTA was started for the benefit of all including small businesses, hence the need for everyone to take an interest in it. 

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