Optimism as Uganda joins Comesa’s free trade zone
Minister of Trade Amelia Kyambadde greets Vice President Edward Sekandi at Resort Beach Munyonyo during the Comesa meeting yesterday as other officials look on. PHOTO BY DOROTHY NAKAWEESI.
What you need to know:
Uganda as a member of the Free Trade Area expects to, among other things, enjoy access to a market of more than 400 million people without paying import tax.
Kampala
The eighth Comesa Business Forum closed yesterday, leaving behind both the good and bad news. The good news is that Uganda is now a member of the Comesa Free Trade Area (FTA) and the bad news is that — depending on how Uganda plays the ball - it could end up as a dumping ground for regional products.
With FTA, there will be increased trade among member states and a wider market that provides several varieties in goods traded. And the country’s private sector will not only access more than 400 million people, but do so without paying import tax and with less hassles as the ground is levelled.
Initially, Ugandan goods entering the other 19 Comesa markets were subjected to a four per cent tax. This rendered Ugandan commodities more expensive.
Comesa benefits
“The last five years, the Comesa has, on average, provided market for 57 per cent of the value of Uganda’s exports annually, earning the country an average of $1.3 billion (Shs3.3 trillion) in export revenues per annum” Trade minister and Comesa Business Council chairperson Amelia Kyambadde said.
The decision to join the Comesa FTA, therefore, consolidates and improves Uganda’s access to this lucrative market as the decision that Uganda’s exports to the member countries will not be subjected to import taxes.
Producer competitiveness is expected to increase since intermediate inputs imported from member states, on which a 4 per cent import duty was levied, will now not be subjected to import duties.
Consumer welfare is also projected to improve since imports from the FTA members will not be subjected to import duties, hence lower consumer prices.
Kampala City Traders Association chairperson Evaristo Kayondo said: “It all comes to implementation of the proposals. If we don’t have situations where member states arbitrarily introduce policies whose impact on business is devastating like the recent cash bond introduced by Kenya, then we hope for the best.”
