Ugandan exports to Rwanda flourish on food supplies, raw materials
Sunday February 12 2023
Rwanda’s appetite for imports from Ugandan grew to a record $60.55 million in the fourth quarter of 2022 from $15.64 million in the first nine months to September as Kigali turned to her regional neighbours for food supplies and raw materials.
Latest Bank of Uganda trading data shows exports, which had stagnated in single-digit millions of dollars between January and September 2022, grew to an average of $20 million monthly between October-December.
Ugandan economist Fred Muhumuza attributed the growth to lower harvests in Rwanda that necessitated food imports.
“The importer ... has to import a lot of food to restock. In future, we might see export levels reduce,” he told local media in Uganda.
Highlights published in the East African Cross Border Trade Bulletin by the Food Security and Nutrition Working Group (FSNWG) show that Rwandan authorities were under pressure to provide adequate food and also ensure sufficient supply for raw material, especially for breweries.
The FSNWG data shows Rwanda breweries imported 3,991 tonnes of sorghum from Uganda, 2,065 tonnes of maize and 2,866 tonnes of rice from Tanzania.
However, small scale cross-border traders – who used to dominate the informal trade business – complain they have not fully benefited from the reopening of the border in January last year.
Previously most of the informal trade at the Gatuna-Katuna border was in foodstuff such as maize flour, rice, Irish potatoes and beans. But the traders say this has stopped because Rwanda now demands for licences to bring in goods.
The licence requirement has also drawn complaints from bigger exporters.
Kanakulya Mulondo, the secretary for security, environment and mediation at the Kampala City Traders Association, said traders remain sceptical about exporting to Rwanda.
“We remain cagey about the Kigali export market because our push to be compensated for losses when the border was closed in 2019 fell on deaf ears,” he said.
The association had sued Rwanda at the East African Court of Justice for closing the border. The court ruled that the closure of the border and restriction of Rwandan nationals from accessing Uganda was in violation of the East African Treaty rules of free movement across member states.
The association says some Ugandan traders now prefer markets in DR Congo, South Sudan and Burundi. Bank of Uganda data shows that in the region, DR Congo remains the biggest informal export market for Uganda, closely followed by Kenya, South Sudan, Tanzania and Rwanda respectively.
Before the closure of the border in 2019, Ugandan exports to Rwanda – predominantly cement and food – totalled more than $211m in 2018, according to World Bank figures, while Rwanda exported $13m worth of goods to Uganda.
John Lwere, the exports executive at the Uganda Export Promotion Board, said trade was just picking up after the reopening of the border a year ago.