Election period on the brink amid economic slowdown

Thursday February 27 2020

 

By Karoli Ssemogerere

There is a small sigh of relief after Uganda and Rwanda held talks to ease tensions in their frosty relations. The post-border situation has left the local population in greater Kabale and Ntungamo districts anxious about loss of markets for primary and unprocessed foodstuffs.

Uganda is a “low-cost producer” so the human cost of production is negligible. Uganda can deliver most agricultural merchandise at very low prices regardless of distance. Produce can easily reach Eastern DR Congo, without a dent in profitability.

The Kenyans are also unhappy with their erstwhile neighbour Uganda, whom they think are dumping milk, a misuse of the term as dairy production by nature, relies on subsidised inputs, which most farmers cannot afford. Ugandans consume very little milk and beef per capita. In the case of Tanzania, the markets in Rwanda and Kenya do not exist.

There is some positive news coming up. The reconstitution of the Government of South Sudan may revive the fortunes of north-south trade. Government has been in court battling claims from traders suing for compensation for trading losses caused by the Sudanese wrapping up their merchandise without cause.

The DRC, one of the two guarantors of the Uganda-Rwanda fragile peace, has not yet brought something tangible after a high level presidential visit. DRC is waiting for bigger fish, and internally political events dictate a certain distance from Uganda.

There are a number of issues between former president Joseph Kabila and the current regime. Mr Kabila’s party controls Parliament, but strongmen of the former regime are getting a feel of being out of power even though officially, their former boss has settled in his role, a massive estate in the environs of Kinshasa, which is basically a lifestyle estate or mini-State within a State. DRC is intriguing, a harsh combination of wealth and threadbare poverty at the same time.

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Business even at a higher level, is conducted using petty trade level. Businessmen complain of being fleeced nonstop and are waiting for their respective governments to set up mechanisms to resolve and enforce settlement of business disputes.

Government is trying to enter into more restrictive markets like SADCC. Uganda is proposing to sell maize to drought-stricken Zambia. Malawi may also be a candidate for relief food which is readily available in Uganda. The war on illegal fishing has politicians up in arms against impounding of illegal fishing gear a conditioned but wrong response.

Uganda still has plenty of animal protein thanks to cheap domestic fish. The recovery of fish stocks may as yet revive fish exports to the EU.
Fishing wrangles on the lake are a symptom of Uganda’s biggest economic problem, unemployment. Some of the biggest fishing armadas are operated by communities which don’t touch any major water bodies.

It’s not uncommon to find fishermen from Isingiro catching fish in Kalangala. The Iteso rank very high in fishing agility. Ugandans have notoriously conservative palates, but are surrounded by neighbours who eat raw, young and immature fish. This is why enforcement and impounding of illegal catch can only moderate the problem.

The second biggest economic problem is a gradual acceptance that production decision for oil is not likely until 2025 at earliest. The tangling with Tullow Oil has left Uganda’s economic credibility dented.
The browning of coffee receipts like fish is a major political problem.

It won’t be very wise to start campaigns with the current, state of the market. Farmers need stabilization funds to cover the cost of production and mitigate price risk. Images of farmers uprooting coffee trees are not what the government needs at this time.

Mr Ssemogerere is an Attorney-at-Law
and an Advocate. kssemoge@gmail.com