Uganda looks to open new markets as Congo’s enters EAC
Saturday April 02 2022
After the Democratic Republic of Congo was officially admitted to the EAC, businessmen and traders in Uganda are excited about the potential it brings.
Congo adds more than 90 million people to 177 million East Africans. In the region, Uganda is the second largest exporter to Congo, after Rwanda.
East Africans can now freely go to Congo if the trade and movement barriers such as the $50 visa fee are removed. The DRC shares borders with all the East African countries except Kenya.
Reagan Mugume of the economic Policy Research Centre, based at Makerere University Business School, said Uganda and Rwanda are the best positioned to take advantage of opportunities presented by DRC because of their geographical proximity and previous trade relations with the country.
In January, trade between Uganda and the DRC hit an all-time high, as new markets for Kampala’s goods opened up. According to January 2022 data from the Bank of Uganda, Kampala’s exports to DRC were $74.3 million that month, up from $29.9 million in December 2021, representing a 44 per cent growth.
The January figure is higher than export earnings from Kenya, which has traditionally been Uganda’s biggest trade partner in the region. Uganda earned $40.9 million from exports to Kenya in the same month.
Uganda’s main exports to DRC include cement, palm oil, rice, sugar, refined petroleum, baked goods, cosmetics and iron materials.
Martin Kyeyune, the corporate affairs manager at Roofings Uganda Ltd, a steel manufacturer, said the DRC market, which his company recently entered, has a lot of potential for Ugandan goods and businesses.
“All we want is the Ugandan government to accelerate the initiatives it has started in the DRC, like road construction and security,” he said.
Formal and informal traders along Uganda’s border points with DRC at Bunagana and Aliwala have complained about high tariffs and extortion by officials from the Uganda Revenue Authority (URA), which allows smuggling to thrive.
Uganda and the DRC have three roads projects. The first road will run from Kasindi to Beni (80km) and the second will integrate the Beni-Butebo axis (54km). The third will stretch for 89 kilometres from the border town of Bunagana, through Rutshuru to Goma.
Uganda’s Works minister Katumba Wamala handed over the construction sites to Dott Services on December 4, 2021 in the DRC cities of Beni and Goma.
Ugandan trader John Adriko, who says he goes to Congo regularly, said: “Movement of goods would be eased because many people use illegal routes to escape taxes because most goods coming from Congo are considered smuggled goods.”
Two weeks ago, URA Commissioner General John Musinguzi said the DRC joining the EAC will help in creating uniformity in taxation as taxes will be paid at the border. Congo currently has five tax and immigration bodies.