Uganda to put accent on regional exports as earnings stagnate
KAMPALA, MAY 23- Staring at a $4 billion trade deficit, Uganda is now looking at regional markets to bridge the gap. According to the Uganda Export Promotion Board, trade with neighbours accounted for nearly half of the country’s export revenues last year, a number that could be improved with more focused interventions.
“We have decided to prioritize regional markets over the next five years because statistics have demonstrated that they offer more potential for our value added products,” says Elly Twineyo Kamugisha, the Uganda Export Promotions Board Executive director.
“Statistics from last year show that the demand for Uganda’s goods in the regional markets is overwhelming compared to other markets across the globe. There are also other factors such as proximity of these markets and the less stringent standard requirements on the goods. All these indicators are pointing us towards focusing on the new opportunities,” he adds.
An over dependence on commodity exports has seen revenues from Uganda’s foreign trade stagnate over the years.
In 2015 for instance, Uganda earned only $2.73 billion from its exports, a slim increase over the $2.65 billion earned in 2014. OF that figure, exports to its neighbours within the East African Community Grouping fetched $ 1.022 billion making it the number one destination for Uganda’s products while exports to Europe added $502.99 million.
Meanwhile with a growing population and rising demand for consumer and capital goods, the import bill reached $6.065 billion last year.
Some of the country’s main export products to the regional market included tea, tobacco, dairy products, oil products; confectionary, cosmetics, cereal, beer, sugar, coffee and cement, partly aided by favourable exchange rate. With its free floating shilling, Uganda has the weakest currency amongst her EAC neighbours which has encouraged high volumes of cross-border trade in her favour .
According to Kamugisha, poor packaging, poor handling of goods, lack of information on the existing trade opportunities, poor policies and informal trade have been the reason behind the low figures in the sector.
One of the strategies UEPB is considering to improve regional trade is to establish an official presence beyond Kampala. Informal trade contributed 30 percent of Uganda’s general trade and this has been facilitated by the lack of regional trade offices outside the capital, Kampala, he says.
“A certificate of trade costs Ushs 5,000 but they are only accessed in Kampala, so traders find it more convenient to trade amongst themselves, which further eats into our earnings,” Kamugisha added.
Establishing regional offices at strategic locations within the country, would help address some of the bottlenecks identified and bring more trade activities above board, he says.