World Bank’s recommendation to shift trade to coastal areas refuted
Traders at a border point. Concentrating trade on coastal areas, might rob citizens of some partner states of job opportunities.
Kampala – Trade experts have contested recommendation by the World Bank suggesting that East African states should shift trade activity from their hinterlands to coastal areas.
Mr Anton Dobronogov, a senior World Bank economist said during the release of a report – “Reshaping economic geography of East Africa: From regional to global integration” that East Africa needs to create a joint economic zone around coast areas where economic activity should be concentrate for the region to benefit from global trade.
“East Africa’s economic density is located inland unlike in other countries and this makes it hard for products produced in the region to compete at the global market due to high transport costs,” Mr Dobronogov said.
Reacting to the presentation, however, Mr Harvey Rouse, the head of Trade at the European Union rendered the recommendation irrelevant saying that regional trade is more important than global trade.
Drawing lessons from the European Union, Mr Rouse said even EU’s trade thrived on regional trade that is especially concentrated inland. Trade among partner states has been growing steadily over the years. Uganda’s trade with her neighbours for instance over took her traditional overseas markets including Europe and the United States.
Uganda’s export trends
In 2010 for example, Uganda exported good worth $297 million to Kenya, $293 million to Rwanda while exports worth $264 million were exported to DR Congo. However, high transport costs are said to be an obstacle in the flourishing regional trade. Transport costs account for between 30 to 50 per cent of production costs within the East Africa due to long distances from coastal areas.
Mr Godfrey Ssali, a policy analyst at Uganda Manufacturers Association said creating economic zones at coastal areas will not different from the colonial days when the East African railway was constructed to facilitate the exploitation of resources from the region.
It was also argued that a joint economic zone at the coast would move the entire economic activity to such areas which would rob citizens in other partner states of jobs.
By Faridah Kulabako, Daily Monitor
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