Uganda: Raising Rural Regional Exports and Rural Incomes

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The Monitor (Kampala)

OPINION
6 October 2008
Posted to the web 6 October 2008

Moses Byaruhanga

In the last three series I have written on agriculture looking at the bottlenecks and suggesting solutions.

Today I will look at regional trade and how it impacts on agriculture. Figures from the Uganda Export Promotion Board indicate that trade between Uganda and its neighbours has been increasing over the years in favour of Uganda.

For instance trade with Sudan in 2007 was a total of $ 600m out of which $450m was informal while $150m was formal. In 2006 Uganda's trade with Sudan was about $ 100m both formal and informal. Then our trade with Sudan took a second position after Kenya whose imports from Uganda in 2006 was a total of $ 184m. In 2007 Sudan took the first position in as far as Ugandan regional trade is concerned raising from $100m mentioned above in 2006 to $600m in 2007 thus overtaking our trade with Kenya at $200m.

Our exports to Congo which was second after Sudan stood at $256m in 2007. Our trade with Rwanda also grew from $55m in 2006 to $122m in 2007. In total regional trade (exports from Uganda) grew from $700m in 2006 to $1.3b in 2007 both formal and informal.

Looking at the commodities traded in, they are mainly industrial and unprocessed food products. Uganda exported unprocessed food products worth $126.3m to the region in informal exports. These include bananas, beans, fish, pineapples, tomatoes, sorghum, potatoes, maize and onions. If you look at the products mentioned above, these are grown by peasants in which case the $126.3m above was shared between peasant farmers and traders.

This is good in as far as fighting poverty and increasing homestead incomes is concerned. I know a group in Kayunga district which sells pineapples to Juba. They buy pineapples in Kayunga at Shs1000 each, transport it for Shs500 and sell it in Juba at Shs3,000, thus making 100 per cent profit. The Kayunga farmer shares part of this trade by earning Shs1000 for each pineapple bought from him/her at farm gate. This is an increase in the farm gate price because two years ago the farm gate price of a pineapple was at around Shs600.

For a person with an acre of pineapple with 10,000 suckers, one can earn Shs10m in a year. This is good income. The group of twenty youth I mobilised in Kayunga in 2006 through Naads to plant an acre of pineapples each are expecting to harvest their first crop this December. They will be part of this regional trade as some of the members of the association they belong to are already reaping from the Juba market. Each of these twenty now has 100 layers in addition. I want each one of them to add on an acre of Matooke to be able to earn at least Shs20m, the minimum the President is targeting for rural households.

The trade in food items with the region shows that our rural people are benefiting, hence raising rural incomes. In my recent article, I mentioned that Mukwano Group of Companies had informed me that their sales had increased by 20 per cent in the previous year. Considering that Mukwano's goods (soap and cooking oil) are bought by low income earners, when their sales increase, it means that incomes among the low earners are increasing as well.

Further more, we should take cognizant of the fact that for the last 20 years, northern Uganda has not been part of the money economy as people were in camps not earning income. Now that a majority have gone back home, many are beginning to sell their surplus and using their income to buy consumption goods. In fact there is a lot of trade between the north and Sudan in food products.

More rural incomes are likely to lead to more consumption leading to increased sales in industry and services, hence better performance of the economy.

Mr Byaruhanga is special presidential assistant on political affairs

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