Uganda is planning to establish cross-border markets to cut trade losses resulting from instability in some of its neighbours.
Last year, the country’s export revenues fell by 4.6 per cent, from $686.6 million between March and June 2015 to $637.7 million between July and October 2015, according to figures from the Bank of Uganda.
As a result, Kampala has entered into negotiations with TradeMark East Africa and other agencies to build Elegu Market at the border with South Sudan; Lwakhakha market in Manafa district and another in Busia on the border with Kenya; and Cyanika and Katuna on the border with Rwanda.
The plan, government officials say, is partly in response to the crisis resulting from the outbreak of fighting in South Sudan, which forced Kampala to send in its military to evacuate its citizens from the country.
There will be two other markets at Mpondwe in Kasese District and Ntoroko on the border with the Democratic Republic of Congo.
According to officials in the Ministry of Trade, Industry and Co-operatives, warehouses for small-scale manufacturers, stores for food items, slaughterhouses and silos will be built.
“We need the products near the markets so that our neighbours can buy at border points. This will help cut our losses,” said Silver Ojakol, Commissioner of External Trade.
Statistics from the Uganda Export Promotion Board show that last year, the regional market was Uganda’s top export destination, with $1 billion worth of exports shipped to the neighbouring countries.
The country’s exports
This means that 54 per cent of Uganda’s exports were consumed in the region. The country exports fish, maize, beans, sugar, bananas, sorghum and industrial products to Kenya, DR Congo, Rwanda, South Sudan and Tanzania.
The fighting that broke out in Juba in December 2013 caused a steady decrease in Uganda’s exports to the country, from $414 million in 2013 to $385 million in 2014 and $353 million in 2015.
South Sudan became Uganda’s leading export destination in 2008, following the signing of the Comprehensive Peace Agreement in 2005. In 2008, total exports peaked at $1.18 billion.
Uganda faced a similar scenario in 2008 when post-election violence erupted in Kenya. Part of the Northern Corridor was blocked, with a part of the regional railway line being destroyed.
Ugandan manufacturers reported a $43 million loss because of delays, destruction of goods and slowed production.
Similarly, conflicts in eastern DRC have disrupted the long-term economic prospects for Uganda.