Uganda’s Revealed Comparative Advantage in COMESA

Abstract

Most recently, Uganda increased its trade engagements with COMESA as demonstrated by its submission of accession instruments to COMESA Secretariat in order to access the Free Trade Area (FTA). It is envisaged that trade with COMESA can compensate for the low export demand elsewhere by enabling diversification of the export basket and facilitating value addition to traditional exports. It is also expected to enhance producer competitiveness and consumer welfare. Full exploitation of this requires information on where and in what commodities Uganda's trade niche lies. This study assesses the country competiveness within COMESA based on the concept of Revealed Comparative advantage (RCA). The paper also evaluates the stability of Uganda's RCA in COMESA from 1997-2014 using HS6-digit level export and re-exports data obtained from the World Integrated Trade System. Findings reveal that Uganda's RCA is in all 16 industries at the product chapter level. It is stable in exports of animals, vegetables, food production, wood, textiles, & cloth, stone & glass and metals. Policies for further development of these sectors should aim at addressing sectoral challenges including the low productivity, marketing, and processing capacity in the animal sector, low capacity to test phytosanitary and sanitary certification in the vegetable sector. Additionally, tackling market and low production challenges for the textile sector and, high costs of production for the metals sector will further boost exports to the region.

Comparative Advantage of Tanzanian Coffee Sector under “Everything but Arms” Export Trading Regime

“…Another study that attempts to employ the RCA is the study of Katunze and Kuteesa (2016) the study examined RCA by using Symmetric Index (SI) which was first engineered by Laursen (1998) to account for the asymmetry problem. The study evaluated the stability of Uganda's revealed comparative advantage in Common Market for Eastern and Southern Africa (COMESA).…”

Analysis of the East African Community Integration Process as an Opportunity for Uganda’s Medium-to-Long-Term Development

“…There are a lot of similarities in the EAC region in regards endowments however, and value addition would be a key ingredient to maintaining Uganda's benefits from trade. The diversification of the export basket and facilitating value addition to traditional exports is seen as a means to increase Uganda's export demand beyond east Africa, to the COMESA for instance (Katunze & Kuteesa, 2016…”

Examining the Patterns and Dynamics of Intra-Regional Trade and Revealed Comparative Advantage in the East African Community

“…As a result, comparative advantage is a primary source of cross-country trade flows, and countries should align their internal trade policies with their comparative advantage when formulating policies. Studies on comparative advantage in East Africa have tended to focus on individual countries and specific commodities or sectors (see for example, Katunze and Kuteesa, 2016;Mkenda, 2014;Ndayitwayeko et al, 2014;Were and Odongo, 2019), rather than looking at which product groups the EAC members have comparative advantage within the Community and how comparative advantage has evolved over time. As a result, this study adds to our understanding of how trade structure has changed following the revival of the Community by not only examining the product groups in which the countries have comparative advantage, but also how it has changed since its revival.…”