A s the saying goes; when there is no light in the west, there is light in the east. The NRM government has undertaken robust steps to rapidly activate our domestic demand through laying ground for import substitution following the deadly COVID-19 pandemic, which pushed countries into look downs that hampered the movement of goods.
In the wake of COVID-19 and its devastating effects, Uganda is producing solution-based products onto our market. Unlike in the past, Ugandan products have been warmly received by local consumers because of their improved quality.
Apparently, our scientists are in final stages of testing COVID-19 vaccines with 90% probable curing capacity. All these innovations coupled with ambitious plans to industrialise Uganda are great strides desirous of our celebrations. However, studies have revealed that most of the goods are in surplus on Ugandan market thus necessitating us to tap into external markets for more revenues. This is the reason the Government is increasing market for exports.
The challenges to external market access have historically ranged from subsidies used by wealthy nations down to regional and local level factors. It is on this basis that Africa has been shifting away from traditional trading partners over the past two decades.
Africa products in EU market reduced from about 40% in 2,000 to 25% in 2017 and the US from nearly 25% in 2,000 to 8% in 2017 and increasing its exports to China from 5% in 2000 to over 20% in 2017 and India from 3% to 10%.
Like aggregate exports, Africa’s manufacturing exports too, have shifted away from EU, declining from 50% in 1995 to 25% in 2015. The share of manufacturing exports going to the US has remained stable at around 10% in last 25 years. Yet in 2001, the US government offered Africa privileged access to US market under Africa Growth and Opportunity Act (AGOA) as a mechanism to stimulate export growth in the continent.
AGOA provides for duty-free treatment for about 6,500 goods from eligible sub-Saharan African countries exported to the US.
Uganda was one of the first countries to express interest in benefiting from AGOA’s provisions and some of Uganda’s eligible products include agricultural and forest products, textiles and apparel, footwear, minerals and metals. However, Uganda’s exports to the US under AGOA have been dropping steadily mainly due to some of unclear guidelines by the US customs. The paperwork is nightmare, forcing most traders to pay duties rather than doing paperwork. Some government officials have not been helpful to these people for failure to give them enough support.
In the next NRM’s term, this shall change to enable our apparel manufactures and craft makers in particular to benefit from AGOA because products’ demand is high.
Apart from AGOA and European Union’s Everything But Arms (EBA) where EAC partner states receive full duty-free and quota-free access to EU for all exports with exception of arms, we have also negotiated a number of regional trade agreements, including EAC common market protocol, COMESA and Free Trade Agreement and the COMESA-EAC-SADC Tripartite Free Trade Area.
The World Trade Organisation (WTO) also granted a waiver to allow preferential treatment for services and service suppliers from least developed countries (LDC).
This explains why today Uganda has emerged as the champion of rising share of manufacturing exports going to other SSA countries from East Africa and with implementation of the Africa Continental Free Trade Area (AfCFTA), Uganda is set to consolidate her position and find more markets for our products.
Building on our Pan-Africanism principle, NRM longs to maintain close working relationship with other African states to ensure success of free continental market to support our people’s prosperity.
It is our belief that with a well-functioning African free market, the issue of marketing will be addressed as elaborated in achieving economic and political integration.
Regionally, NRM will work with EAC countries to take full advantage of customs union and remove all non-trade barriers to embrace regional trade.
We are phasing out the strategy of government negotiating trade agreements and leave it to exporters to take advantages therein because it didn’t perform to our expectations having established that private sector didn’t maximise advantages of available and emerging markets.
We are working directly with private sector organisations such as UMA, Uganda National Chamber of Commerce and Private Sector Foundation Uganda to help manufacturers and other producers identify markets and look for buyers of Ugandan products within the region and international markets next term.
We also intend to increase support both financial and capacity enhancement to our trade support agencies such as Export Promotions Board, UNBS and Uganda Coffee Development Authority to provide precise market information and knowledge to buyers in the target market. Our products have to be competitive in quality, availability, safety and price. To ease movements to market, we are investing in railway, water and air cargo transport infrastructure.
