Posted on July, 19, 2016 at 09:26 am
By Dorothy Nakaweesi
Give us an overview of Uganda’s export industry.
Countries that have developed have had to increase their share of exports to GDP. For a long time, Uganda has relied on primary and agricultural exports. While these bring in money, it has not been a lot. Until recently, we could not talk of value added exports and most of the exports used to come from Kenya. In 2015/16 financial year, the country recorded $2.7 billion (Shs9.1 trillion). However, what is disappointing is that imports coming into Uganda were doubled.
This is unfortunate in that, every dollar we earn is taken back to the importing countries. This is not to say that we shall stop importing because we need capital goods, raw materials that are components used in manufacturing. But we must push an export agenda. Uganda’s exports must increase if we are going to get out of poverty. Exports create employment, incomes, revenues and they also encourage expansion of production.
When you look at the manufactured products from Uganda, we only export about 15 per cent; the 85 per cent is consumed domestically. This means if the export market expanded by just by 5 per cent, we would export 20 per cent. This would be good but we can do better.
How can we achieve or see increased exports?
Some of the value added exports from Uganda are agro-based such as vegetable oils and fats exported out of the country. If you want to boost production and productivity, aim at expanding both domestic consumption and exports. Because then, the agricultural products you produce are going to form part of the raw materials for local industries which produce for the region and some of them will be exported in their semi-processed nature. Therefore, we have to begin boosting agricultural production first. If you are going to increase coffee exports, production has to be increased.
Increasing production and boosting productivity is one thing and market availability is another. As UEPB, have you secured markets for Ugandans?
There are many markets that have been negotiated; the European Union, China, Everything But Arms, Japan, Agoa. This is in addition to the regional markets where we are members. But what is important for Uganda in these markets? Markets are not good for if we don’t penetrate them.
How have you helped farmers and exporters to penetrate these markets?
If we are to go into production, quality and quantity should not be left out on the domestic and international market.
We have begun negotiations and talks with producer associations countrywide, actual and potential exporters who are organised in different places. We shall share with them what the market needs and how to produce it.
Post-harvesting is a big issue in agriculture. Almost 60 per cent is lost at this stage. Long ago, Masaka coffee farmers used to address issues of post-harvest handling if they needed quality. In West Nile, tobacco is stored in brick-shelters better than their own houses because it means a lot to them so they cannot compromise on quality.
Quality begins from seeds handling; value chain must be followed from this stage. Then how is pruning and weeding done? How do you harvest, dry the commodity and later store it?
What strategies has UEPB put in place to see that our capacities are boosted?
This financial year, we have begun engagements with those who produce the seeds they distribute to farmers through Naads, they must be of good quality and free from diseases. We want to address the entire value chain from local governments. We have had meetings with producer associations, met traders associations to interest them into exporting and this will be on going.
We are engaging traders like Kacita to start carrying and promoting Uganda’s products when going to China. We are engaging with the private sector in cooperatives to offer extension support to members who export.
How do you see the status of Uganda’s export industry in the next five years in terms of value and volume?
I am convinced that our export statistics will increase. The government, through the National Development Plan 11 (NDP 11), has set ambitious targets but we shall try to achieve them. We think exports will have increased beyond $9 billion by 2020 and this could be more if we set ourselves to changing the mindset of our people. Productivity and production will increase.
With events happening after Brexit, are our exports under threat?
The ministries of trade, foreign affairs and finance have negotiated various preferential markets which are unilateral. The European Union will remain a big market for Uganda through the ‘Everything But Arms.’ We also have an arrangement with India through the International Trade Centre to export products to the EU, to export products like sunflower seeds and coffee. Our EU market which is about$500 million (Shs1.7 trillion) will still remain big if the rest of the 27 countries stay into the Union. With Britain as our colonial master unfortunately, we have not exported a lot to it. It’s about $30 million (Shs102 billion) less than the $40 million (Shs136 billion) export worth to Burundi when it is at peace.
However, Britain was our biggest market for services mainly Kyeyo which brings in a lot of remittances. If the Brexit affects the services from Uganda, our annual $1 billion (Shs3.4 trillion) remittances will be affected. With FDI, investors will look at stability of the countries. We have been negotiating with EU, but with the Brexit, we may begin to renegotiate with Britain alone.
But diversification of markets is important. Chinese market is also big for coffee, tea, and sesame seeds.
What is your comment on the political turmoil is South Sudan in regard to doing business?
South Sudan has just been admitted to the EAC which meant they were going to benefit as members. I pray they put the guns back to their barracks because much as it is very important market for Uganda, it’s also important for them. If they are going to be prosperous, this requires stability and peace; this environment will enable business. The previous time Ugandans lost over $45 million (Shs153 billion) worth of property. We request governments in the region to restore peace in South Sudan because spillovers can be bad.
Export industry
Elly Twineyo, executive director Uganda Export Promotion Board
Challenges
Producing the right product and quality of marketing a product has been a challenge. The business of ‘market A or B is here’ is not there anymore. We go out of our offices to visit these exporters.
The other challenge is most of our exporters are small. If we had enough resources, we would reach more people because most people don’t know what the market wants. However, things are not as bad as they used to be. We get support from other departments who also promote exports.
Source: The Monitor