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DR Congo conflict: What is at stake for Uganda

Apart from an influx of refugees, the DR Congo conflict has already strained movement of goods from Uganda into DR Congo, especially in the eastern part of the country. PHOTO / FILE 

What you need to know:

  • Uganda’s exports to DR Congo have been growing over the years, rising to about $433.2m (nearly Shs2 trillion) between December 2023 and November 2024, which is a growth of 40 percent from the $258.3m (Shs955b) earned in the same period between 2019 and 2020

The ongoing civil unrest in Eastern DR Congo has Uganda's business community on edge.

Businesses, and the country as a whole, are losing revenue, not only to the civil strife but the apparent hostility that is directed at Ugandans and to Uganda as a country.

The conflict has brought trade to a grinding halt, with merchandise trucks destined for DR Congo parked in Kampala and the border town of Bunagana.

But in all this, what is at stake?

Uganda's exports to DR Congo have been growing over the years, rising to about $433.2m (nearly Shs2 trillion) between December 2023 and November 2024.

The growth represents a 40 percent increase from the $258.3m (Shs955b) earned in the same period between 2019 and 2020.

DR Congo is Uganda's third-largest export market in East Africa, accounting for about 5 percent of the country's annual total exports.

Uganda's exports to DR Congo include manufactured and agricultural products, fuel, and electricity.

Other top exports include animal and vegetable fats and oils, sunflower-seed, cotton-seed oil, fast consumer goods, and smoked fish.

The conflict, therefore, which is at the epicenter of Uganda’s export hub - Eastern DR Congo - will be a pain to traders, which in the immediate and midterm, is likely to impact the country’s foreign exchange earnings. 

To give you a perspective of the danger that the conflict presents, you need not to look far.

Already, Uganda Airlines has suspended flights to Kinshasa, which is tens of thousands of kilometres away from the conflict zone – Eastern DR Cong.

It was not immediately clear how the suspension would impact Uganda Airlines, but judging from the frequency of flights to Kinshasa – once every week in the last four years - this must be one of the routes that have been giving the airline some dollars.

Beyond Uganda Airlines, the business community has been holding out hoping for a swift end to the conflict.

Over the years, traders had found a safe bet in DR Congo, breaking into an almost virgin market in Eastern DR Congo.

In the 1990s Uganda’s exports to DR Cong were just $0.50m, but have since tremendously grown, especially in the last five years, as Ugandan traders sought for alternative markets due to blockades placed on certain goods by some East African member states.

Kenya and South Sudan remain Uganda’s biggest markets in East Africa.

While DR Congo, even in conflict, still holds a huge potential for Ugandan traders and manufacturers.

Allan Senyonddwa, the Uganda Manufacturers Association director policy, says it is nearly a week, since M23 took control of Goma, and the conflict is taking longer than it had been thought.

“We thought it was going to be a small thing,” he says, noting that what they thought was only in Goma, escalated into Kinshasa, which creates risks for traders and exporters.

Raw material source country

Besides being an export market for Uganda’s goods and services, DR Congo is one of Uganda’s sources of raw materials, mostly unprocessed minerals such as gold, timber and African fabrics.

According to Bank of Uganda data for the period between December 2023 and November 2024, Uganda imported goods worth $32m (Shs118b) from DR Congo, among which included raw tobacco ($7.28m), cocoa beans ($4.32m), and sawn wood ($698,000).

The data above indicates an increase in trade between Uganda and DR Congo, which has resulted from improved trade relations supported by the 2019 agreements, in which Uganda and DR Congo agreed to work on key infrastructure projects to ease business and increase trade and investment between the two countries.

President Museveni and his counterpart Felix Tshisekedi signed the agreements in 2019 on the premise that there was need to eliminate trade restrictions and infrastructure bottlenecks between the two countries.

DR Congo also uses Uganda as a transit for some of its imports from Mombasa.

Thus, the need to work on key infrastructure including the Kasindi-Beni (80 kilometres), Beni-Butebo (54 kilometres), and Bunagana-Goma (89 kilometres) roads, had been seen as an opportunity to promote trade, but the works have since stalled, largely because of the conflict in Eastern DR Congo, and the ambiguity of its rerun to Uganda, which has caused some rope pulling every time government requests for money from Parliament to execute the projects.

But even with these challenges, Uganda and DR Congo have continued to commit that the project will be executed.

In October, last year the two countries’ leaders and respective ministers in charge of transport met and signed renewed commitment to take this project forward. 

Private sector operators

The conflict, of course, has a large scope of impact on both human life, services and properties. However, the private sector says it has greatly impacted their activities with movement of goods and services almost grounded. 

Kenneth Ayebare, the Private Sector Foundation Uganda director of transport and logistics, says that whereas it is too early to understand the depth of the impact of the conflict “the reduction in trade activities has resulted in significant economic losses … with the conflict disrupting trade routes, increasing transportation costs, delivery times, and made it almost impossible for Ugandan businesses to access the DR Congo market."

This comes at a time when the economy is picking up from pre-Covid-19 exports that had been dampened by Covid-19-induced lockdown.

The conflict has also had a devastating impact on the livelihoods involved in the transportation and logistics sectors.

“Drivers, customs clearing agents, and other professionals are facing significant challenges due to the conflict, including disrupted trade routes, increased security risks, and uncertainty surrounding border crossings,” Ayebare says, noting it was prudent for the warring parties to find a peaceful resolution to the conflict.

Going back to 1998 

To put the impact of the M23 conflict on Uganda in perspective, we must go back to the Congolese civil war between 1998 and 2003. 

The war broke out in 1998 after Rwanda helped bring Laurent Desire Kabila to power in 1997. 

Uganda was one of the countries drawn into the conflict. 

Rwanda’s and Uganda’s interest in natural resources, such as gold and timber as well as the illicit regional trade, played an important role. 

In 2022, the International Court of Justice ordered Uganda to pay the DR Congo $325m in reparation for looting gold, diamonds and timber during the war.  Professor Kristof Titeca of the International Development University of Antwerp in a conversation with the East African said a recent investigation, documented the ongoing smuggling of Congolese timber to Uganda and other parts of East Africa.

It is also suspected that Uganda’s gold exports are re-exports from DR Congo and the commodity has become an important revenue earner, even as the country produces far lower gold (2.9 tonnes), compared to the 30.2 exported tonnes. 

Since 2016, gold has been Uganda’s most important export product, with the latest data showing that gold earns Uganda $2.7b in revenue, representing at least 44 percent of export earnings.