What you need to know:
- The Africa Trade Barometer report notes that the cost of transport and logistics in Uganda is too high to enable production of competitive products
Transport and logistics comprise between 35 percent and 42 percent of production costs in Uganda, according to a report by Standard Bank, which trades as Stanbic in Uganda.
The report - Africa Trade Barometer - which measures performance of trade in 10 African countries including Uganda, Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Tanzania, and Zambia, notes that the cost of transport and logistics in Uganda is too high to enable production of competitive products with countries in Asia, majority of which have an input of only 8 percent on transport and logistics.
“This poor infrastructure undermines the competitiveness of Ugandan exports and significantly increases the costs of receiving imports. An improvement in the transport and logistics infrastructure in Uganda may, therefore, be an important enabling factor that allows Ugandan businesses to realise the benefits of increased intra-African trade,” the report reads in part.
Data from Uganda National Roads Authority indicates that Uganda has a national road network of 21,000 kilometers, of which about 8,588 kilometres are tarmacked.
The state of the road network remains a big component in the cost of transport, which is exacerbated by the lack of alternative means such as water and railway.
The report, which was compiled in May, also reveals that awareness of African Continental Free Trade Agreement (AfCFTA) among Ugandan businesses has significantly increased to 33 percent, signaling that the business community is picking interest in the continent trade area.
Uganda is one of 54 signatories to AfCFTA, an initiative that seeks to, among others, improve the level of intra-African trade by creating a single market for goods and services and lower barriers to trade.
AfCFTA member countries have committed to eliminate tariffs on most goods and services that are traded between African countries over a given period after AfCFTA entered its operational phase in July 2019.
The Africa Trade Barometer, launched in 2022, seeks to address the information vacuum about African trade data, support and enable growth of intra-Africa trade.
Speaking to journalists during release of the report, Mr Guvi Kudzai, a senior researcher at the Standard Bank Group, said respondents that are aware of AfCFTA in Uganda had increased to 33 percent from 23 percent in September 2022, which is a statistically significant change that could have been driven by an increase in awareness by Private Sector Foundation Uganda.