Uganda has best environment for trade in EAC, says report 

Growth in Uganda is boosted by improved import and export growth prospects and ease of access to credit. Photo / File 

What you need to know:

  • Among East African member states, the Africa Trade Index report shows, Uganda has a  better trade environment compared to Kenya and Tanzania 

The Africa Trade Index by South Africa’s Standard Bank, which also trades as Stanbic in some countries, indicates that Uganda has the best trade-enabling environment among East African member states. 

The index, which was compiled between August and September 2022 to provide a comparative view of enablers and challenges to trade across 10 African markets, indicates that Uganda, performed better than Kenya and Tanzania, improving its position from sixth to fourth due to improved import and export growth prospects, ease of access to credit and government support on trading activities. 

Tanzania and Kenya are ranked at fifth (same position as the previous study) and seventh respectively. 

Kenya slipped from the fourth position attained in the previous ranking, due to a significant decline in credit terms and import growth prospects. 

The index ranks South Africa at position number one, followed by Ghana and Namibia, respectively.  

The study surveyed 2,554 businesses in South Africa, Ghana, Uganda, Namibia, Tanzania, Mozambique, Kenya, Nigeria, Zambia and Angola. 

“Significantly more businesses in Uganda [up from 45 percent to 52 percent] feel that the government is encouraging cross-border trading activities,” the report reads in part, noting that trader business confidence, which is a function of economic performance in Uganda remained relatively stable at 54, the same score the previous assessment conducted between December 2021 and January 2022.

However, respondents noted that government should ease cross border trade as well as decrease business-related taxes. 

“Greater clarity on customs duties payable, simplification of business policies, and reduction in the time required for customs clearance [will]  impact trade,” the report says, noting that many businesses reported long delays while waiting at customs than they spend on the road.

Businesses also noted that government should simplify business policies and continuously work on infrastructure, which has deteriorated. 

“When compared to data from our first issue,” the report reads in part, “the road infrastructure [has] deteriorated significantly.”

Uganda, along with Angola, Ghana, Nigeria, and Mozambique, the report noted, suffer most from deteriorating roads, ports, airports, telecommunications, water supply outages, customs and trade regulations.

“Given today’s uncertain economic challenges, it is unlikely that governments will invest in large-scale infrastructure projects in the near term,” the report said.