Blockades see Uganda’s exports to EAC drop by Shs75.5 billion
Milk products from Uganda, particularly Lato, have been blocked from the Kenyan market with authorities just allowing in limited quantities or blocking the whole consignment. PHOTO |FILE
Uganda’s exports to East African countries in October declined by 20 per cent, representing a drop of $20.7m (shs75.5b) compared to the same period in 2019.
This was partly blamed on a hostile environment, characterised by non-trade barriers and blockades on a number of goods originating from Uganda.
According to a Ministry of Finance economic performance report for the period ended November, during October, exports to East African Community region declined from $102.9m in October 2019 to $82.2m, marking a decline in over a sustained export growth of almost two calendar years.
“This decline is partly on account of non-trade barriers,” the report reads in part.
At country specific level, the report said, Uganda traded at a surplus with Burundi and South Sudan whereas deficits were registered in Kenya, Tanzania and Rwanda.
Kenya took the largest share of Uganda’s exports, whereas, Tanzania was the main source of Uganda’s imports.
South Sudan was the second largest market for Uganda’s exports in the region while Kenya was the second largest source of imports.
Reduced exports negatively impact the economy as the country’s earnings from manufacturers drop, which affects taxes and jobs in the country among other things.
The drop also affects the foreign exchange market and widens the gap between the value of exports and imports, also known as the current account deficit.
However, there has been a multiplicity of complaints across segments of manufacturers in Uganda, highlighting the discrimination and barring of Ugandan exports by some East African community member states, particularly Kenya and Tanzania.
Uganda’s milk and sugar have been one of the largest commodities affected by non-trade barriers by the two states.
Manufacturers have accused Kenya of barring a number of exports from accessing its market as it questions the origin of Uganda’s products, including those with valid certificates of origin.
A recent statement by the manufacturers asked the Ugandan government to put in place retaliatory measures that would bar goods from Kenya from entering Uganda.
The manufacturers had given government an ultimatum of up to December 25.
However, government has not reacted on the ultimatum and President Museveni has rejected previous demands for retaliation.
In the event that government does not address their demands, manufacturers have threatened to seek redress at the East African Court of Justice.
EAC deficit
Meanwhile, in October, Uganda recorded a deficit of $46.63m to the East African region.
“During October 2020, Uganda exported merchandise worth USD 82.24 million to the EAC region and imported merchandise worth $128.87 million, thereby trading at a deficit of $46.63 million,” the report reads in part.
It should however be noted that the deficit is lower than that of September 2020 at $66.6m. The report also attributed the increased import bill to the global pandemic which disrupted informal cross border trade between Uganda and its neighbours, leading to a decline in exports.
