Ugandan traders lose Shs178b over Rwanda border closure
KAMPALA. Ugandan traders lost an estimated Shs178.6b during the Uganda-Rwanda border closure over a period of three months, the Private Sector Foundation-Uganda (PSF-U), the umbrella body for the private sector, has revealed.
According to the PSF-U executive director Gideon Badagawa, on average Uganda raked in over $200m (Shs744b) annually from trade inflows with Rwanda through the Katuna border point. On average the country raked in roughly $16m (Shs59.5b) monthly.
“We are losing business. As much as politics is not losing, people are losing their jobs and this is going to be worse if this issue is not addressed,” he said.
Mr Badagawa added that after the border closure on February 28, Ugandan private sector players were getting an average of $2m (Shs7.4b) per month.
On February 28, Rwanda closed its borders with Uganda in Katuna and Chanika in Kabale and Kisoro districts respectively.The closure affected hundreds of cargo trucks destined for Rwanda. The Rwandan authorities advised the truck drivers to turn back and use Mirama Hill border in Ntungamo District, which is about 100 kilometres away.
On Monday this week, the Rwandan Revenue Authority reopened the border at Katuna border point and indicated it will remain open temporarily for two weeks to allow extended testing of the construction works of the border on its side.
Mr Badagawa accused the two countries of playing politics whose effects were mostly felt by the private sector which was nearly left in a state of paralysis as movement of cargo from both sides was brought to a standstill.
The director of the East African Business Council, Mr Stuart Mwesigwa described the border closure as a “big loss to Uganda since Rwanda was already a ready market for them” and one which is close to home.
“Opening new markets is costly, it’s a whole new process which can’t just be done now. We already spent a lot on creating new market with Rwanda. Going to start afresh with other markets is not the best solution as per now,” Mr Mwesigwa said.
Uganda had in January and December, before the standoff, earned $16.96m (Shs63.9b) and $16.90m (Shs63.7b), respectively at the time when tensions between the two countries had started to build.
The border has now been closed to Ugandan traders for close to three months now.
Uganda also uses Rwanda as a gateway to eastern DR Congo, which means that traders have to find longer and expensive alternative routes to such markets.
Several companies including Roofings, Hima Cement, and Uganda Breweries Limited (UBL) among others indicated they that registered severe losses due to this standoff. Roofings say that they have lost on average $4m (Shs14.8b) per month; Hima Cement $3.5m (Shs13b) and UBL £1.5m (Shs7b) since the closure.
Byron Kinene the chairman of regional lorry drivers and transporters association, said a number of drivers of trucks, lorries and major cargo trucks are experiencing redundancies as a result of the closure.
“Before the closure of the border there were over 100 trucks that would enter Rwanda on a daily basis, now we are speaking of about 20 trucks that use the other entrances. This has led to no work and some of these trucks were bought with loans which is a big loss to us,” Mr Kinene said.
According to Rogers Kisekka, the head of sales operations, UBL, Uganda has lost about $2m in the foreign exchange earnings due to the border closure.
Uganda’s export receipts from Rwanda fell by 81 per cent in the period ended March, according to data released by Bank of Uganda.
