Uganda’s exports to Kenya had been increasing exponentially until 2017, when Uganda managed to report for the first ever trade surplus with Kenya. Since then, The Republic of Kenya has intensified Non-Tariff Barriers with fears of possible takeover of the trade balance of power; an act that contradicts the EAC Common Market protocols.
In a bid to seek redress of the blockade of Uganda’s exports to Kenya, Uganda Manufacturers Association (UMA) hosted the Commissioner Customs, Mr. Abel Kagumire, together with the External Commissioner Operations, Mr. Julius Ahimbisibwe, on the 19th of February, 2021 at the UMA secretariat.
According to the Commissioner Customs, URA’s focus is to facilitate exports and how they can, together with UMA, grow Uganda’s exports and requested for information regarding the NTBs faced by Uganda’s manufacturers while accessing markets within the EAC.
“In that regard, we normally get a challenge when they hold the sugar and dairy trucks at Busia border; all the blame comes to Uganda Revenue Authority; so, we decided to come in and touch base with people who manufacture and find out where we can support especially in how we can grow exports from Uganda” he added.
Mr. Richard Mubiru, the Chairman, Economics sub-committee said that URA’s focus to grow exports from Uganda is a move in the right direction. “Incentives to manufacturing is a major driver of competitiveness if we are to leverage increasing exports from Uganda to Kenya; we have witnessed this from the big steel players whose exports to Kenya and Tanzania have increased due to the low cost of power” he said.
According to Mr. Mubiru, there’s has been a shift to embrace EFRIS and hence called for the digitization of all customs procedures to support other business processes that have since been digitized.
Mr. Daniel Birungi, the Executive Director, UMA, thanked the Commissioner Customs for supporting the industrialists and promised to share a concept paper that highlights the challenges faced by manufactures and proposals that would propel growth of Uganda’s exports to Kenya.
The Commissioner Customs also thanked UMA and the Ministry of Trade for putting up a spirited fight against the blockade; a move that yielded results when Kenya allowed duty free wholly obtained sugar from Uganda of up to 90,000 tonnes per annum; on condition of submission of proof (that indeed it is grown and milled in Uganda)
“As the URA, we also wrote to Kenyans through the Ministry of Trade and confirmed that we have all the capacity and that all the sugar was produced in Uganda” Mr Abel said.
He further called upon the UMA to facilitate Uganda’s exports when approached by the Kenyan verification team through providing the necessary information required by the Kenyan team.
URA Plans for Manufacturers:
1st of January, Uganda entered the African Continental Free Trade Area. According to the Commissioner, URA is looking at technologies that can facilitate trade, and remove all trade barriers that may arise. Goods will not have to pass through Mombasa alone, but can pass through South Sudan to reach Morocco, Ethiopia among others.
The External Commissioner Operations said that they are trying to enhance the customs procedures to isolate priority importers like manufacturers and Government projects. “Those cannot que up with the ordinary people importing one container and we shall communicate this to our Kenyan counterparts.
The election period and its effect on manufacturing.
Manufacturing is one of the most sensitive sectors because it is long term in nature, highly capital intensive and has a lot of foreign direct investments in Uganda. The recently concluded electoral process poised speculation and threats of violence which affected the flow of FDIs into the country.
The election period, combined with the COVID-19 effect and the security issues that existed at the time, has not made doing business any easier. From the precedence of violence witnessed during the presidential campaigns, to the threats and speculation of violence that would ensue during or after the election period, meant that investors had to halt their activities.
“People who have invested here wouldn’t want to see a situation where there is a threat to their life, property, and businesses. So, in a way the tensions greatly affected their operations.” said the UMA Manager Policy – Mr. Muzamil Muhammad.
In situations of insecurity and speculation of violence, people tend to think that there is something that is cooking and, in many instances, they will either run out, or they will curb down their reinvestments. He added.
Scaled-down operations: Many manufacturers had scaled down operations for three reasons:
- Their workers had to exercise their civil right to cast a ballot and therefore these were allocated days off to participate in the voting exercise.
- Intimidation from the heavy military deployment and;
- Internet shut down: From the business perspective, this decision was unguided because there are so many ways to cut off social media without necessarily shutting down the whole internet infrastructure which is a backbone of the global economy.
Manufacturers do not just sell in Uganda, but are connected to other countries through the internet which has become a global backbone. With this shut-down, it meant that companies lost out on business that was occasioned by pending orders, confirmations, and delivery that could not be facilitated with the internet shut down.