Expensive credit is hindering export sector growth - official

Kampala.

Expensive credit is one of the problems exporters have identified that is hindering them from growing the sector to enable the country cut back on its huge import bill.
Much as some commercial banks have reduced their lending rates up to about 17 per cent, exporters say this is still too high for them to break even since most of the export commodities are perennial.
Speaking at the opening of the second annual Export Conference in Kampala last week, Uganda Export Promotions Board (UEPB) executive director, Mr Elly Twineyo Kamugisha, said: “We need affordable credit because commercial banks are too expensive.”
Looking at the latest export statistics from the Bank of Uganda as of November 2017, the country exported goods and services (both formal and informal) worth Shs11.5 trillion, up from Shs9.8 trillion registered the previous year.
This is a Shs1.7 trillion increase but this performance is overshadowed by the huge import bill of Shs20.8 trillion.
UEPB board chairman Nimrod Waniala cited the Asia tiger economies which have grown through export services, he said Uganda should also promote exports for the country’s development.
“We should also export services especially education because we have a trail through Makerere University, the first in the region which has seen many leaders graduate from it. Mulago hospital has always been a research centre and this is what we should promote,” Mr Waniala said.
In her remarks, Trade minister Amelia Kyambadde said Uganda needs to develop her export potential to address the supply constraints that hinder the country’s competitiveness to benefit from globalisation.
“The government has endeavored to work on the enablers like the legal framework, reviewed the some of the laws and introduced new ones to support exports,” she said during the export conference organised under the theme: ‘Export Development – Addressing supply side constraints of exports.”
Ms Kyambadde urged the exporters to reduce the imbalance in trade, something that will be achieved if exports are increased.
“Lack of export-oriented production and structures and these are what government is striving to establish. With drives like the export week, the status will change,” Ms Kyambadde said.
She added that government is aware that agriculture exports are largely affected by low productivity, poor post-harvest handling and weak producer organizations. This she said, should not be the cause to lament because the ministry of agriculture is handling this issue.
“To promote exports, we need to ensure the right quality, quantity and delivered on time. This has been one of the challenge and complaints from most destinations and all this starts from the base,” she added.
She also revealed that the ministry of Works is working on establishing a cold storage system at Entebbe airport to help exporters store their products before they are flown out of the country.