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,” brought together SMEs operators, policy makers, business mentors, bankers, innovators, tax experts among others.

One of the highlights of the Summit, was a special round table discussion on the African Continental Free Trade Area AfCFTA) treaty that all African countries ratified, except Eritrea, a year ago.

Experts told participants that the trade treaty is a double-edged sword that SMEs and countries should start preparing for if they are to stay in business.

Ms Juliet Najjinda, a tax manager at PricewaterhouseCoopers (PwC Uganda) said AfCFTA will increase the market base for goods and services produced by SMEs as long as “they ensure quality”.

“What SMEs should do is to get cheap raw materials within the continent instead of China and ensure they produce quality products,” Ms Najjinda, who presented a paper on how SMEs can benefit from AfCFTA said.

“There will be a big market and that means SMEs should start working together to produce in large quantities,” she added.

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The treaty will among the objectives, eliminate tariffs and non-tariff barriers that have hindered intracontinental trade and movement of people and goods for centuries, liberalise trade in services and progressively cooperate on investments, intellectual property rights and competition and cooperate on all trade-related areas.

African countries will now be able to cooperate on customs, establish a mechanism for the settlement of disputes concerning members’ rights and maintain an institutional framework for the implementation and administration of the AfCFTA.

Mr Ian Rumanyika, the URA assistant commissioner Public and Corporate Affairs, said the Continental treaty will reduce their revenue collections accruing from international trade in the next five years.

The anticipated revenue drop, according to URA, is due to the fact that almost all goods and services will enter into the country duty free.

“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,”

URA collected more than Shs6.8 trillion in net international trade tax during the FY 2018/19.

“So, the rest of revenue collection must come from the domestic market. That is why we are asking all Ugandans to be tax compliant,” he added.

Mr Emmanuel Dei-Tumi, the Human Capital International president, said this year’s summit, decided to prioritise and assemble experts in business and continental trade to discuss AfCFTA because the agreement has far-reaching implications on SMEs.

“This year’s summit has brought together the key players in the digital innovation economy and SMEs sector to provide an open platform to discuss the opportunities and challenges of the agreement and exchange ideas on leveraging technology and good governance for SMEs growth,” Mr Dei-Tumi said.

Mr Vincent Bagiire, the Ministry of Information and Communications Technology Permanent Secretary, said government is doing everything possible, including putting in place policies and infrastructure to digitalise the economy.

“The reason most companies that use technology are increasingly becoming successful is because they are harnessing data. What we have done as government is set up data centres to enable companies like Safeboda to use analytics and hopefully become the next Facebook on the continent,” Mr Bagiire said.

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African economies have a combined Gross Domestic Product of $3.4 trillion, but sadly trades internally at 14 per cent and the rest of the trade is with Europe, Asia and America.

Mr Abdoulie Janneh, the former UN undersecretary general and chairman of the Mo Ibrahim Foundation said government should facilitate the growth of SMEs because of their role in the economy.

“The role of SMEs as drivers of growth in economies across African cannot be overemphasized as over 90 per cent of all the businesses in the continental market are SMEs and employ over 80 per cent of workers. This is key given Africa’s young population,” he said.

Ms Annette Kihuguru, the Executive Director, Ecobank Uganda who were title sponsors of the Summit, said they partnered with HCI “because we want to be part of the growth of SMEs in Africa”.