Cross-border trade project fails to start

The promise:
In May 2015, the Ministry of Trade and Industry launched the Great Lakes Trade Facilitation Project (GLTFP) aimed at boosting regional trade by removing constraints to trade and improving infrastructure.
The the project, supposed to be funded by the World Bank, was to help improve the business environment and reduce non-tariff barriers to intra-regional trade, and address the underlying causes of conflict, poverty and underdevelopment at the common border of Uganda and DR Congo.

Proponents of the $10 million project, out of which the World Bank was to provide $7m and the government $3m, felt that cross-border trade would not only boost exchange in agricultural products, but also lead to social cohesion.

Reducing the cost of doing small scale business, especially by female traders, was identified as one of the ways through which boosting trade would be realised.

The project, which was planned to be implemented at three border crossing points of Bunagana, Mpondwe and Goli on the western side of Uganda, had four components. The first component involved causing major improvements in the core trade infrastructure and facilities at the border.

Existing customs offices, border-crossing roads and junctions, drainage systems and sanitation facilities were to be improved and green spaces created through landscaping. All those were planned to take up at least 70 per cent of the project funds.

Work on the infrastructure was meant to be done in two phases. The first was to cover roads, sanitation facilities, customs buildings and green areas, while the second would cover the establishment of border markets.

The second component was meant to be the enactment of policies and implementation of procedure reforms and build capacity of traders and government officials in a way that would facilitate cross-border trade in goods and services.

The third component entailed putting in place a performance-based management system in cross-border administration, while the fourth would focus on implementation support, monitoring and evaluation and enhancing mechanisms for communication.

Status

More than two years after the project was first launched, nothing has been done to upgrade the infrastructure at any of the three border crossings. Save for Bunagagana, which had its roads fixed by the Uganda National Roads Authority in 2012 when the Kabale-Kisoro-Bunagana road was fixed, roads in the other two project sites remain untouched.

The 14.4 kilometre road from Nebbi to Goli is a murram thoroughfare which gets impassable, especially during the rainy season. The road from Kasese to Mpondwe is not any different.

Similarly, no work has been done on rebuilding or improving the customs offices, the toilet facilities and landscaping to create the green spaces envisaged. There is no evidence that anything has been done.

Information on the Ministry of Trade and Industry website suggests that the project is not any closer to taking off.

“A specific budget estimate for compensations and implementation of other environmental mitigations that will be involved has not been made because the scope of size and area of operation on some sites are not yet known,” the ministry states.

Official explanation

The Coordinator of Great Lakes Trade Facilitation project (GLTFP) in the Ministry of Trade, Mr Cleopas Ndorere, says nothing has been done due to lack of funds. He blames the situation on Parliament, which he says has not approved a request by the government to borrow money from the World Bank.

The project was meant to be implemented with funding from the World Bank. We tabled our request to borrow the necessary funds through the parliamentary Committee on the National Economy, but our request has never been tabled before Parliament. Work cannot go on without funds,” he told Daily Monitor on phone on Friday.

Impact
The business landscape in the affected areas remains hostile and the cost of doing business remains high.

In areas such as Mpondwe’s Ihumbiriha market, the market structure had over the years become rather small and heavily congested. The state of those roads has complicated the cost of doing business, which contradicts the spirit and principle of the Great Lakes Trade Facilitation project.

Other infrastructure, including customs offices, toilet facilities, and landscaping to create green spaces, have never been carried out, thereby frustrating the ease of doing business.

Daily Monitor position

There is mounting concern over the amount of debt that Uganda is piling up, which the International Monetary Fund recently said threatens to become unsustainable.

We would not readily establish whether this was a key consideration for the relevant parliamentary committee in not forwarding the loan request for consideration. Nonetheless, this is an important and relatively cheap project, which has the capacity to finance itself in the long run by collecting fees at the affected border points and repaying the loan. The government needs to be careful when it borrows and for which project it borrows, but it appears for this particular project, the borrowing would be justified and perhaps a self-financing component should be built into the project.

In September last year, the World Bank, which had offered to lend Uganda for this particular project, announced a decision to withhold funding to Uganda. The Bank cited, among other things, delays in project effectiveness, low disbursement and weaknesses in safeguards, monitoring, and enforcement. Let not funding for this project be held back due to failure by the Parliament to ratify this loan.

Voices

“The number of tables and stalls available to the traders is very small. This forces most of them to lay their merchandise, especially foodstuffs on the dusty ground, which is unhealthy. This is exposing the communities on both sides of the border to diseases. Besides, when it rains traders don’t want to pay market dues because they have no shelters and the market gets flooded. That is why we had been excited by the project.”
Stanly Bwambale, Chairperson Mpodwe lhubiriha Market

“Right now we collect only about Shs45 million per month, but our thinking is that the Council will accommodate more traders from both sides of the border and generate more income if it was expanded. We don’t have the land to cater for such an expansion, but we we’re of the view that the project would factor in purchase of land.”
Janet Biira, Deputy LC3I Chairperson of Mpondwe Ihubiriha Town Council

“The biggest challenge for us is in the area of sanitation. As you can see, Mpondwe Ihubiriha market has only one toilet for the more than 500 traders here. That means that the facility is very highly congested. Besides we also have a perennial water problem. Supply is intermittent. Water is available in the morning, but it gets used up before the day ends. That poses very serious problems.”
Maga Kabugho, trader in Mpondwe Ihuburira Market

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