Uganda’s Strategic Shift Needed to Unlock Growing EAC’s Market
- Author Kriss Namakola
- Published January 14, 2024
- Word count 1,101
Uganda faces a stark choice: embrace internal reforms to thrive in the East African economic boom or risk falling behind its neighbors.
With Congo and Somalia joining the group, there are indications that Djibouti and Ethiopia will be joining the EAC bloc to make the market size of the community reach 800 million people.
Uganda is the closest trading nation to the Congo compared to other member states that form the East African Corporation. The accession of the Democratic Republic of Congo (DRC) to the East African Community (EAC) should trigger a nerve in the regional business landscape. With a population exceeding 100 million and a wealth of untapped natural resources, the DRC’s entry presents both immense opportunities and fierce competition for Ugandan enterprises. To thrive in this new economic reality, Ugandan businesses must shed outdated mindsets, embrace strategic partnerships, and prioritize building a robust democratic infrastructure.
For Ugandan businesses, perched precariously at this economic crossroads, a stark question looms: will they seize the burgeoning opportunities unlocked by Congo’s integration, or will they languish in the snares of hesitation?
Prior to Congo’s accession, the EAC operated like a girded house, with the movement of people and goods hampered by restrictive visa regimes in Congo and other regional non-ECA members. This fragmented economic environment has now been irrevocably altered by the DRC’s arrival. Visa walls have crumbled, replaced by the invigorating jamboree of free movement. Ugandan traders, once confined to their domestic markets, now find themselves with unfettered access to a tantalizing consumer base of 90 million Congolese and potentially 800 million East Africans if Ethiopia and Djibouti are admitted.
Imagine the vibrant scene: Ugandan merchants traversing the fertile plains of Eastern DRC, hawking wares in Addis Ababa, running motels in Djibouti, and serving Pilau and Matoke in Bujumbura. Picture Ugandan manufacturers setting up shop in mineral-rich provinces like Katanga, their production lines humming with the promise of tapping into seemingly bottomless reserves of raw materials. Imagine Ugandan merchants on the streets of Dodoma and Juba, unconstrained. Can you imagine Uhuru setting up eateries in Mombasa, Yei, and Goma? Imagine Nalubwama arcades, Kirumira, Namaganda and other real estate developments in Bukavu and Kigali, Movits on every street in Somalia. This is not a futuristic fantasy; it is the new reality, a reality brimming with economic potential for Ugandan businesses bold enough to grasp it.
Yet, amidst this burgeoning opportunity, a sobering truth emerges. Ugandan businesses, it seems, have been sluggish in grasping the nettle of regional integration. While their Kenyan counterparts have embraced the growing market with the unbridled enthusiasm of seasoned explorers, Ugandan entrepreneurs remain mired in a cautious inertia, their hesitation a stark contrast to the Kenyan dynamism.
Kenyan traders have flooded Congolese and South Sudanese markets, their entrepreneurial prowess manifesting in a visible dominance. Ugandan businesses, in comparison, cling to the familiar shores of their domestic market; their timidity is a missed opportunity. The Kenyan success story should serve as a potent wake-up call for Ugandan entrepreneurs, a clarion cry to shed their timidity and claim their rightful share of the growing East African market, especially of the Congolese and South Sudanese pie.
For too long, Ugandan businesses have thrived in a closed, domestic market, content in the insular comfort of familiar businesses and established customer bases. This inward-looking individualism, while comfortable, proves woefully inadequate in the face of East Africa’s economic behemoth. To capitalize on the immense potential now within reach next door in Congo, a bold metamorphosis of the Ugandan business mindset is crucial.
Ugandan entrepreneurs must shed their parochial tendencies and embrace a regional outlook. They must become chameleons, agile and adaptable, adept at navigating the complexities of a diverse, cross-border market. Gone are the days of domestic comfort; the future belongs to those who can thrive in the dynamic interplay of regional integration.
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Traditionally, Ugandan businesses tend to lean heavily on government support, be it for market access, financing, or navigating the labyrinthine corridors of bureaucracy. While we want government assistance, it might not come. Unless, of course, you are somehow connected to the powers that be either through cronyism or patronage. The cross-border market demands a proactive, self-assured approach.
Ugandan entrepreneurs must develop their own networks, identify market niches, and cultivate strong business relationships. The era of passive reliance is over; the time for independent, strategic action has arrived. Ugandan businesses must become the architects of their own success, forging their own paths through the forces of supply and demand rather than waiting for government-built bridges.
The Ugandan government needs to play its part if its businesses are to compete favorably in the competitive market. The vibrancy of any market hinges on the robustness of its underlying institutions. A strong legal framework, transparent governance, equitable access to affordable capital, and effective dispute resolution mechanisms are the bedrock upon which trust and smooth business operations flourish.
Unfortunately, Uganda grapples with the hydra-headed monster of corruption and weak democratic institutions. Ugandan businesses, therefore, must be prepared to navigate these complexities with prudence and ethical fortitude. Building strong partnerships with local businesses, adhering to the highest ethical standards, and advocating for good governance can contribute to a more conducive business environment for all. By demanding for and promoting transparency and the rule of law, Ugandan businesses can play a crucial role in fostering a more stable and prosperous future for the entire region.
The entrance of new members into the EAC is not merely a market expansion; it is a tectonic shift in the regional economic landscape. It is a disruption, a catalyst for change, that demands a response. Ugandan businesses have a choice: cling to the familiar shores of their comfort zone or boldly venture into the uncharted waters of regional economic integration. The path forward is fraught
But the journey doesn’t end with individual businesses. The Ugandan government needs to take deliberate actions to develop democratic institutions. The DRC has now surpassed Uganda in this race. It now has an elected government with predictability. When Museveni came to power, we still had Zaire with Mobutu at its helm. Kenya still had Moi, and Nyerere was still in Tanzania. South Africa was still under apartheid.
Now, all these countries have had more than one peaceful transfer of power. Uganda needs to raise its standards to globally acceptable tenets of democracy, human rights, and equitable development. Only then can Ugandan businesses truly unlock the full potential of the DRC and claim their rightful place as regional economic leaders.
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