Prime
Will 2020 go down as year of deglobalisation?
Kampala Cement factory in Mukono District. Producers and suppliers need to work together with the intention of promoting local products and services. photo BY DOMINIC BUKENYA
What you need to know:
- Mr Charles Ocici. Much as we may have to take advantages of our core competencies as nations or regions, we also need to encourage the building of competencies within our national boundaries that can create a sustainable independent economy.
- The outbreak of Coronavirus, which was first noticed in Wuhan, China, has put the world on a production competence test of particularly the much-needed Covid-19 treatment equipment, JUSTUS LYATUU writes
For consumers around the world, no matter how remote you are, there is a lot at stake, thanks to the Coronavirus pandemic that has disrupted the normal way of life.
Many countries rely on Chinese manufactured goods, including the United States (US).
According to available statistics, more than $560 billion worth of goods came into the US from China in 2018, making up more than 21 per cent of the value of all goods the largest economy imported.
And for developing countries like Uganda, the reliance on Chinese imports is terribly high.
Despite the level of development of any country, the outbreak of Coronavirus, which was first noticed in Wuhan, China, before being declared a pandemic has put the world on a production competence test of particularly the much-needed Covid-19 treatment equipment.
For instance, each day that goes see a new level of international row as countries make a rush for vital supplies to fight Covid-19; something that has left observers wondering if globalisation still makes perfect sense and whether it will stick around after the scourge is long gone.
To bypass dependence on the global village narrative, local brewers or alcohol manufacturers came together and agreed to convert more than 7.3 million litres of ethanol into hand sanitisers to fight the spread of Covid-19 instead of waiting for imports from elsewhere as it has been the case over the years. This became a priority after international suppliers failed to meet local demand.
On several occasions, President Museveni has encouraged local industries to manufacture the essentials to bridge the acute shortage. Mr Museveni believes the country can be self-sustaining if certain things are put right.
President Museveni’s assertion to industrialists to enhance manufacturing means Uganda is slowly reducing on dependence on great powers such as China going forward.
Business analysts say just like other nations have realised the risks of this over-interdependence and intend to curb it, they are intensifying inward looking strategies.
Prof Augustus Nuwagaba, International Consultant, on Economic Transformation in the African region (development economist), explains that measures such as the lockdown of land, water and air transport have justified the British Exit (Brexit) from the European Union (EU).
He explained that for instance in February, Italy wrote to EU for assistance but EU approved Euros 670M.
“This has shown that countries are more inward looking and have ignored globalisation; Covid-19 has showed that there is no globalisation other than exploitation,” he said.
He added; “Globalisation is only for private gain but there is no togetherness; there is nothing like ‘all for one’ and this is very unfortunate.”
Prof Nuwagaba says regional bodies around Africa have been quiet.
“I have not heard anything from Economic Community of West African States (ECOWAS); there would be meeting to discuss how South African countries are faring in the fight against Covid 19,” he says.
On East African Community, Prof Nuwagaba said Uganda is ahead but even if EAC was active and one member states would have adapted Ugandan style of handling Covid-19.
Across the region, Tanzania and Kenya have taken a different approach in the fight against Covid-19 that has seen cases rising daily, putting Uganda’s fight at jeopardy since Uganda is now receiving new cases from the region.
“Tanzania should have followed Uganda because Uganda had shown the best practices,” he said.
Prof Nuwagaba said; “Covid-19 has undressed the spirit of globalisation; Germany took lead with testing all, investing in PPE and the epidemic subdued.”
Mr Charles Ocici, the executive director at Enterprise Uganda, says one thing that we learn from Covid-19 is nations are interconnected.
“Right now United Kingdom is importing Personal Protection Equipment (PPE) from Turkey, and the other day when the UK Premier was getting out of hospital he had nurses coming from the Netherlands,” he said.
Mr Ocici says this means even UK depends on other economies.
But he was quick to add that no matter how interconnected we can be, there is need for a greater extent for countries to put in mind that they can be able to survive when the rest of the
He added; “Much as we may have to take advantages of our core competencies as nations or regions, we also need to encourage the building of competencies within our national boundaries that can create a sustainable independent economy.”
Self sustaining
Mr Edirisa Sembatya, SEED Uganda Representative, says there is need to invest more in local markets compared to exporting capital to bridge the financing gap for domestic SMEs.
“An improved ratio of domestic capital and Foreign Direct Investments will boost sector production and reduce the rate of business failure due to the lack of financing,” he explains.
Mr Sembatya adds, “Both government and private sector need to realise that balance of payments can be improved if we focus on developing local SMEs and improve their capacity to compete locally and internationally.”
Prof Nuwagaba says Covid-19 is a dark cloud with a silver lining and one of the silver linings is the need for import substitution strategy.
He says Covid-19 is an opener for the country. If the pandemic continues, we should be self-sustaining.
“Uganda Breweries has put a whole line for sanitiser manufacture and this has increased the harness of sorghum and farmers are getting some money hence Covid-19 has shown the need for import substitution,” he said.
“Uganda Development Bank (UDB) got an endorsement of getting Shs500b seven years ago but each time government makes an announcement, the actual money released is Shs20b. So how shall we be self-sustaining,” he wondered.
According to Mr Ocici, deglobalisation has underscored the need for countries to realise their talents and make those talents offer as many solutions as the economy requires.
“Let us put our industrialists at an international standard, we have been depending on others because of their competitiveness compared to our in-house solutions,” he said.
Carefully
Mr Ocici believes that if a country decides to look inward, quality and sustainability should not be ignored.
“If we decide to go our way, it should be consistently and the quality of a face mask bought here should be of quality like that one from elsewhere. If we don’t, customers will still run away,” he says.
According to Mr Sembatya, the need for value chain integration from producers to consumers and in order to stimulate local demand, producers and suppliers need to work together with the intention of promoting local products and services.
ENHANCING PRODUCTION
President Museveni’s assertion to industrialists to enhance manufacturing means Uganda is slowly reducing on dependence on great powers such as China going forward.
Business analysts say just like other nations have realised the risks of this over-interdependence and intend to curb it, they are intensifying inward looking strategies.
To bypass dependence on the global village narrative, local brewers or alcohol manufacturers came together and agreed to convert more than 7.3 million litres of ethanol into hand sanitisers to fight the spread of Covid-19 instead of waiting for imports from elsewhere as it has been the case over the years. This became a priority after international suppliers failed to meet local demand.
Deglobalisation has underscored the need for countries to realise their talents and make those talents offer as many solutions as the economy requires.
The need for value chain integration from producers to consumers and in order to stimulate local demand, producers and suppliers need to work together with the intention of promoting local products and services.
