Many of Uganda’s small and medium sized enterprises (SMEs) are increasingly confronted with compliance problems while accessing the European Union (EU) market, trade experts have said.
Experts suggested creating close partnerships and collaborations with companies in the EU market, as well as conducting thorough market research on product requirements and standards before they embark on a business venture.
Fred Zake, the executive director of HortiFresh Association of Uganda, said: “If there is something we can produce effortlessly in Uganda, it is fruits and vegetables. The key issues here for SMEs are quality, quantity, compliance and consistency. This is really the rule of the game.
“SMEs face a lot of challenges, but I want to present them as opportunities for collaboration and joint venture partnerships to resolve them. Seeds, inputs, irrigation and transportation; these are challenges, but also opportunities for investments for SMEs.”
He was speaking during the second Uganda-European Union Business Forum held at Speke resort Munyonyo in Kampala.
The two-day event that climaxed on Thursday, October 27, aimed at deepening economic and trade relations between Ugandan firms and potential investors from the EU.
The event brought together close to 5,000 attendees, including top government officials and agencies, innovators, tour operators, farmers and transporters.
There are many certification requirements and processes needed before one is allowed to take their products to the EU market. The compliance hardships farmers and SMEs go through demotivated them from focusing on the market.
“If you want to enter the EU market, you need to do your own research and prepare very well before you interact with buyers,” Margot Lobbezoo, team manager at Centre for the Promotion of Exports from Developing Countries, said. Uganda’s exports to the
EU were recorded at $505m in 2020 and $685b last year, while imports stood at $649m and $703m during the period under review, according to data from Bank of Uganda.
Uganda majorly exports agricultural products such as coffee, fruits and vegetables, flowers, as well as fish and fish products and imports finished goods like equipment.
Sjaak De Bloois, the head of sustainability and agronomy at UGACOF Limited, said the discussion on adding value to certain export commodities may vary from product to product.
“In the coffee industry, value-addition might be slightly different because the only coffee roasters who are willing to pay big premiums want to get the raw materials and then cook themselves so as to get the best flavour,” De Bloois said.
“So, if we are now telling our cooks that we want to give them a finished product, you disarm yourself in the market from those who are willing to pay. In UGACOF, 40% of the coffee we export goes to such clients. As head of sustainability, my job is to make sure there is compliance,” he added.
De Bloois noted that focus should be placed on traceability and telling the story behind the products being exported.
Emmanuel Mutahunga, the commissioner for external trade at the trade ministry, said:
“We have preferential access to the EU service platform that we negotiated. The EU has granted preferential treatment for services for suppliers in least developed countries, including Uganda. We can look at expanding the scope on how you are looking at the EU market for manufactured products, horticulture and services, among others.”
Investment opportunities exist in the value chains of various products, such as coffee, cocoa, flowers, fish as well as skin and hides for export to the EU market, according to the executive director of the Uganda Export Promotion Board, Elly Twineyo.
Increase investments in industrial sector
While opening the conference on Wednesday, President Yoweri Museveni urged the EU to invest more in Uganda’s industrial sector, like the Indians and Chinese over the past decade.
He also encouraged the EU to establish a central fund to finance their investments in Uganda and other parts of Africa like the Chinese have done through the Export-Import Bank of China (Exim Bank).
“These days, I commission a factory every week. But of the factories I commission, I do not remember a European one. I am glad you have come. There is a very clear advantage for you, but also for us,” he said.
Some of the key messages from different government officials to the EU delegation was the need to establish their firms in Uganda and access bigger regional markets like East Africa and Africa.
Jan Sadek, the EU Ambassador to Uganda, said: “This forum is about showing the EU’s commitment to Uganda as a partner for trade and investment.”
