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South African, Chinese and Indian products have also made Kenyan products less competitive
Uganda’s imports from her once biggest trading partner Kenya have continued to decline as local manufacturers gain market share, Bank of Uganda, has said.
Imports from Kenya currently constitute about 11 per cent of the total monthly import bill worth $55 million (about Shs145.7 billion). This has come down from about 25 per cent recorded in 2005.
In an interview with the Daily Monitor, the director research Bank of Uganda, Dr Adam Mugume, confirmed: “Imports from Kenya have been on decline compared to the total import values.”
Dr Mugume attributes the decline to several factors among which is the fact that Ugandan products have gradually become more competitive compared to Kenyan products.
According to media reports from the Business Daily, Kenya earned a total of KSh19.8 billion (Shs594 billion) from exports to Uganda from January to May, indicating a 15.4 per cent drop from the KSh23.4 billion (Shs702 billion) earned in a similar period last year.
Experts add that the other reason why the trade between the two countries is declining is because of the East African Common Market which has opened up borders. Kenya has used this as an opportunity to set up franchises in Uganda to cut back on the cost of doing business. Some of the Kenyan companies that have set up subsidiaries in Uganda are Bidco, Unilever, among others.
Uganda Manufacturers Association (UMA) executive director Mustafa Ssebagala Kigozi, admits that locally manufactured Ugandan goods especially the consumables have gained popularity.
“Many Ugandans used to think that locally made products were inferior but later discovered the quality and have since changed their perception which has seen the consumption grow,” Mr Ssebagala said.
He said local manufacturers, through UMA, have intensified aggressive campaigns appealing to Ugandans to buy Ugandan and build Uganda, which has helped a lot in capturing the market.
Imports from south africa, india and china
According to Bank of Uganda records, the average value of imports to Uganda between January and April 2014 amounted to $448.5 million (Shs1.18 trillion) per month.
Of these about $111 million (Shs294 billion) came from India, $53 million from Kenya (Shs140 billion) $45.3 million (Shs120 billion) from China, $20.7 million (Shs54.8 billion) from South Africa. This is compared to about $234.7 million (Shs621 billion) monthly average between 2005 and 2008 of which $34.9 million (Shs92.4 billion) came from Kenya, $21.6 million (Shs57 billion) from India, $16.4 million (Shs43. 3 billion) from China, and $15million (Shs39.7 billion) from South Africa.