Experts in business and continental trade have advised Small and Medium sized Companies to ensure quality in the wake of the African Continental Free Trade Area AfCFTA) treaty.
This during the Second Strategic Leaders’ Summit that was held at Sheraton hotel under the theme: “Digital Innovation and Corporate Governance for SMEs in the New Market Frontier,” courtesy of the Human Capital International Organization.
Last year countries except Eritrea ratified the treaty that will see them open borders to enable free trade.
However such economic trends tend to affect locally based Small and Medium sized enterprises in numerous ways following the entrance of larger corporations and much more stiffer competition amid the risk of being thrown out of business.
The tax manager at Price water house Coopers (PwC Uganda) Juliet Najjinda said that AFCFTA will become a big market and that means SMEs should start working together to produce in large quantities adding that SMEs should get cheap raw materials within the continent instead of China and ensure they produce quality products as well.
The treaty will among the objectives, eliminate tariffs and non-tariff barriers while enabling intra continental trade and movement of people, goods ,services and intellectual property rights .
Contrastingly, the Uganda Revenue Authority is concerned that the move will see a reduction in revenue by close to 50% in the next five years according to the URA assistant commissioner Public and Corporate Affairs, Ian Rumanyika.
“We have opened up these borders [under AfCFTA), there is no doubt that the goods that will be coming in our country will not be taxed. Currently, the domestic revenue collections contribute around 58 per cent, compared to international trade that brings in 42 per cent. Now the 42 per cent is going to reduce further to 20 per cent,”he said.
The Human Capital International president, Emmanuel Dei-Tumi said this year’s summit, brought together key players in digital innovation and providing them with the platform to discuss the opportunities and challenges of the agreement and exchange ideas on leveraging technology and good governance for SMEs growth.
The former UN undersecretary general and chairman of the Mo Ibrahim Foundation ,Abdoulie Janneh noted that government should facilitate the growth of SMEs as drivers of growth with over 90 per cent of all the businesses in the continent are SMEs and employ over 80 per cent of workers who are the youth.
The Ministry of Information and Communications Technology Permanent Secretary Vincent Bagiire said that government was doing everything possible, to digitalize the economy adding that the reason most companies that use technology are increasingly becoming successful is because they are harnessing data.