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Oliver Kazunga Business Reporter
COMMON Market for Eastern and Southern Africa member states have been urged to strengthen their procurement practices to unlock the potential of the manufacturing sector in the region.Following the recently held first Comesa regional manufacturers dialogue in Rwanda, the Comesa Business Council (CBC) came up with a number of resolutions member states should adopt to foster growth of manufacturing industries at local and regional levels.
“Government is one of the largest consumers of manufactured products and their first preferred supplier should be the local manufacturing industry.
“Member states should support the development of the manufacturing industry through preferential procurement for the local and regional indigenous enterprises,” said CBC secretary general Mr Trust Chikohora.
“A certain percentage of government procurement should also be reserved for the Small and Medium Enterprises (SMEs) and in favour of locally or regionally manufactured products.
“Member states should promote local procurement through affording a preferential cost within a threshold of 15 percent in favour of local SMEs,” he said.
On global procurement, he said stakeholders agreed that governments could stipulate that for all their outside contracts, contractors should have subcontracting exchange partnerships with local industry.
He said at private sector level, large corporates were encouraged to support local and regional SMEs through procurement processes from the local and regional industry in their respective value chain.
Large corporates working with SME associations can identify the respective SMEs that feed into their value chain. Comesa regional manufacturers also resolved that corporate manufacturers should invest their corporate social investment funds into related sectors of SME manufacturers as part of the initiative of addressing competitiveness of growth of SMEs.
“By dedicating corporate social investment fund into the SME development in our respective value chain will not only boost access to raw materials but also help boost the competitiveness of the SME sector. By implication, all corporate social investment into SME development should receive a tax deductible expense for reduction purposes,” he said.
Mr Chikohora said the CBC through the regional manufacturers was requesting member states to focus and prioritise value addition within the regional value chains in the manufacturing sector.
He said this would be specifically aimed at addressing policies that were pro-value addition. He said business regulations, tax policy, export or import tax should be tailored in a manner that allowed for value addition and discouraged export of unprocessed products outside the region.
The resolutions were adopted at a time when a host of structural challenges such as supply-side and policy regulatory constraints as well as market access barriers still existed within Comesa.
Bongani Ndlovu
Online Reporter