Intra Comesa trade vital for economic recovery - report
Goods. Trucks wait in a line on the road to enter Uganda in Malaba. Comesa member countries should allow free movement of essential and non-essential goods within and out of Comesa. AFP Photo
What you need to know:
- The report identifies pharmaceutical products as among the top intra-Comesa traded products, which could immensely grow as the import origin markets namely EU, India, USA, China and UK are among the hard hit by Covid-19.
Trade is emerging as a remedy that could reduce the Covid-19 pandemic’s adversity through flow of essential goods such as food, medical supplies and other hygiene products.
This is according to a report dubbed Covid-19: Time to reboot Intra-Comesa Trade released last week.
The report authored by experts Benedict Musengele and Jane Kibiru states: “The relaxation of the free movement of essential goods in the region will enhance their production and boost intra-Comesa trade during this pandemic period.”
Experts further cite the implementation of the digital trade facilitation and other instruments as core in mitigating vulnerability to shocks such as Covid-19 pandemic.
The report also identifies pharmaceutical products as among the top intra-Comesa traded products, which could immensely grow as the import origin markets namely EU, India, USA, China and UK are among the hard hit by Covid-19.
The five contribute 45 per cent, 19 per cent 6 per cent 4 per cent and 3 per cent of the source market for pharmaceutical product to Comesa.
According to an International Trade Centre report (ITC, 2020), some of these countries, UK, US, China and India have imposed export restrictions in some pharmaceutical products, which may affect their importation, yet these are critical in the fight against Covid-19.
Comesa is a net importer of pharmaceutical products with exports amounting $ 442.53 million in 2018 and imports worth $ 6,451.03 million respectively.
The intra- COMESA exports of pharmaceutical products constituted 32 per cent of the exports.
“This shows that pharmaceuticals are a major intra-COMESA export hence the need to facilitate its cross- border trade during this pandemic period,” the COMESA researchers note in the report.
Uganda’s status
Comesa remains Uganda’s leading trading destination, especially as far as exports are concern. According to the latest statistics from Bank of Uganda, the country’s export earnings from Comesa totaled to $1.3bn (Shs5.1 trillion).
This was out of the total export worth $4.5bn (Shs17 trillion) earned for the period March 2019-March 2020.
Responding to the findings of the Comesa report, Uganda’s economist Dr Susan Kavuma, who is also a lecturer at the school of Economics at Makerere University said: “Trade is not only the measure to reboot the regional economies but it is a welcome move and I support it because if you are not trading you cannot earn.”
She added: “Unlike in the other trading regions outside, in Comesa the non-tariff barriers to trade are very minimal. With the closure of the aviation industry we can use other measures to trade amongst each other within Comesa.”
The experts suggest in the report that other measures to unblock region’s potential, to be put in place by Member States include, taking a regional coordinated approach in mitigating the impact of Covid-19.
Also member countries have been asked to allow free movement of both, essential and non-essential goods within and out of Comesa.
The region will also need to enhance production capacity and regional value chains to reduce over-reliance on external trade and vulnerability to global shocks/ crisis.
In addition, the region has to diversify markets for Comesa imports and exports to reduce dependency on few countries, identify and provide incentives to manufacturing companies with capacity to produce Covid-19 essential products and facilitate their trade in the region.
Other measures that will spur intra-Comesa trade include fast- tracking the creation of an online platform for sharing information on availability of essential products during the pandemic period.
Given the disruption that mitigation measures have had on the regional supply chains, the implementation of the Comesa Digital Free Trade Area, encompassing e-Commerce is no longer an option but imperative for economic recovery and growth.
Facilitate.
“Trade is not only the measure to reboot the regional economies but it is a welcome move and I support it because if you are not trading you cannot earn. Unlike in the other trading regions outside, in Comesa the non-tariff barriers to trade are very minimal. With the closure of the aviation industry we can use other measures to trade amongst each other within Comesa.” Dr Susan Kavuma, lecturer at at Makerere University
