Minister of Trade was right to suspend the PVoC programme
Posted Monday, January 7 2013 at 02:00
I suspect UNBS simply copied the PVoC from Kenya and Tanzania.
Ever since the Minister of Trade, Ms Amelia Kyambadde, suspended the Pre-Export Verification of Conformity (PVoC) programme for another six months, a number of people have come out to attack her. What the minister did was to allow for more planning and consultations on the programme.
The PVoC programme, like most other government policies in Uganda, is a clear example of “rushed” government policies that are “copied” from elsewhere and introduced without detailed studies of the issues at hand, without proper planning and without full involvement of the stakeholders. Because of this, such government programmes, though well intentioned, are bound to flop miserably.
I suspect UNBS simply copied the PVoC from Kenya and Tanzania. For example, here are a few questions that the UNBS and those in support of PVoC must provide us with answers.
Like the minister noted, many of the importers (about 90 per cent) are small scale traders who go to Dubai or China and buy goods. Moreover, nowadays, many traders do not even travel to these cities but simply remit money to the seller through the money transfer system and order the goods by phone or e-mail. The goods are then delivered to a cargo company in these cities where they are loaded on a container, a single container is shared by as many as 10 importers under a system called “groupage”. How can such importers have their goods pre-inspected before shipment?
Uganda’s neighbours, notably South Sudan and the DR Congo, do not have PVoC in place. How will UNBS prevent substandard goods to be imported by Ugandan traders into these countries before they end up in Uganda? Won’t it cause massive loss of tax revenue to Uganda?
Many of our people, notably the poor in the rural areas, are currently fully relying on substandard goods since it is what they can afford. Research shows that substandard goods cost less than one-third of the genuine products. Now, if you abruptly remove these goods without a practical replacement what will the poor people do?
What is the full financial cost of PVoC to Uganda’s economy compared to its full financial benefit? For example, importing genuine products may require the country to more than triple the amount of money spent on imports! From where will the country get this money in dollars?
Also, the payment to the inspection firm is very costly and the traders are not ready to meet it, neither are the consumers ready to accept a high cost of the goods as a result. So, the government must be ready to pay the inspection firms if it insists on PVoC.
I would like to advise the government to stick to policies that can be practically implemented. UNBS must restrict itself on improving on its product certification system and sensitise the communities to desist from buying uncertified products. At a later stage, when personal incomes improve, the problem of substandard goods will solve itself.