Exports to Rwanda still low despite border reopening

People crossing the Gatuna border post after it was reopened by Rwanda in March 2022. Photo/ file

What you need to know:

Uganda’s exports to Rwanda average at Shs826.2m ($220,000) per month, a sharp decline from the Shs62.6b ($16.6m) monthly average in 2019.

Uganda’s exports to Rwanda have remained low despite full reopening of the Katuna border that had been closed for more than two years.

Data from an export data report by Ministry of Finance indicates the sharp drop in the value of exports from Uganda has persisted.

For instance, Uganda’s exports to Rwanda averaged at Shs826.2m ($220,000) per month, a sharp decline from the Shs62.6b ($16.6m) monthly average in 2019.

Uganda, data indicates, has been posting trade surpluses with South Sudan and Burundi but maintained deficits with Tanzania, Kenya and now Rwanda, which for many years, had been one of Uganda’s largest exports destination.

Ministry of Finance indicated that South Sudan recorded the highest surplus of $63.19m given its largest uptake of Uganda’s exports, mainly food  items.

Traders have blamed the Rwanda deficit on exclusion from the government-to-government trade talks between Uganda and Rwanda.

Mr Muzamil Mabirah, a policy analyst at Uganda Manufacturers Association (UMA), said they have been seeking clarification from government officials but they have always been told to wait as they iron out the remaining differences with Rwanda.

“Members have not exported to Rwanda since the border was opened in January,” he said, noting that it is only people that are moving across.

Ugandan manufacturers, he also noted, have sought interventions from the East African Business Council and World Trade Organisation, but their efforts have not yielded results yet.

“We have made clear the effects of this trade standoff, but nothing has yielded,” said Mr Mabirah.

Rwanda, in March, agreed to reopen the Katuna border based on a recommitment to addressing previously raised political matters. One of the commitments from both governments was to refrain from supporting rebel activities in either country.

Mr Mabirah said the matters that severed the Rwanda-Uganda relationship were never trade-related, noting that traders and their representatives have not participated in the negotiations to ensure sustainable trade.

Similarly, Stephen Asimwe, the Private Sector Foundation Uganda executive director, said the private sector is worried the standoff is taking long.

In Rwanda, Prime Minister Edouard Ngirente told a press briefing in Kigali that his government was reviewing the list of goods to be traded, and that they will soon be allowed in the market subject to quality checks.

The review, Dr Ngirente said, was necessary because Rwanda wants to enforce quality as well as protect local manufacturers who had started producing some of the goods that were previously imported from Uganda.

“Ugandan products,” he said, “must comply with set standards of the Rwandan market,” noting that trade between the two countries will resume very soon”.

Betting on DR Congo      

While the trade standoff takes longer to be resolved, both countries as well as Tanzania and Kenya had explored the 95 million-people-strong market in DR Congo. It is unknown, for now, however, how the latest violence in the eastern DR Congo will affect the trade overtures.

Kinshasa last week accused Kigali of supporting rebel groups in DR Congo, a charge Rwanda rejected.

Uganda is the second largest exporter to DR Congo after Rwanda. In January, trade between

Uganda and DR Congo hit an all-time high, as new markets opened up.

According to January 2022 data from the Bank of Uganda, Uganda’s exports to DR Congo were $74.3m, up from $29.9m in December 2021, representing a 44 per cent growth.

A business summit held recently by Uganda’s Private Sector Foundation was meant to enhance Uganda’s status, and Mr Asiimwe said more than 500 deals were concluded in their visit to Kinshasa and Goma.

It came after Kenya held a similar mission in Goma in April, heavily sponsored by some corporate bodies seeking to expand into DRC.

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