TradeMark East Africa (TMEA) has launched a $16m (about Shs 43bn) fund, dubbed the Logistics Innovation for Trade (LIFT), for innovators who can develop a strategy to reduce the cost and time of transporting goods within East Africa.
The fund is expected to spur innovative solutions to the problems the logistics and transport industry faces in order to improve trade competitiveness within the region.
Isaac Njoroge, the manager of the fund, said: “The challenge fund comes in to help private businesses and innovators mitigate risks… LIFT recognizes the ability of the private sector to innovate, to produce new products that can transform the lives of people not only in Uganda but throughout East Africa.” He was speaking at the launch of LIFT at Protea hotel this week.
East Africa is reported to have the highest freight and transport costs in the world. Transport costs for landlocked countries such as Uganda can be as high as 75 per cent of the value of exports, experts say. These costs affect economic growth, reduce prospects of job creation and dampen efforts aimed at poverty reduction.
The LIFT challenge fund will provide grants ranging from $200,000 to $750,000 to winning proposals from innovators across the world.
The project is expected to reduce transport times along the main East African corridos by 15 per cent by 2016.
Njoroge said: “A reduction of one day in transit times leads to seven per cent increase in exports, for example. Thus, reducing the cost and time of transport will increase trade, reduce the cost of living and contribute to higher exports and create jobs.” He said the LIFT project would encourage transport and logistics providers to focus on services that the market would not have provided.
TMEA Uganda Country Director Allen Asiimwe said in a statement: “The future of the transport and logistics sector in the EAC relies on innovation developed by private sector, and easing the numerous regulations to allow this to transpire.”
LIFT is managed by TMEA with funding from a range of development agencies. Investors supporting the project include UK-DFID, Belgium, Sweden, USA and Canada.