David Mugabe
10 November 2009
Kampala — GOVERNMENT is to establish four cross-border trade points to contain the haemorrhage of billions of shillings lost when foreigners enter Uganda to buy products cheaply and then re-export them.
The commissioner for external trade in the ministry of trade, tourism and industry, Silver Ojakol, told Business Vision that about sh8b has been planned for the project in the next budget.
Traders from neighbouring Sudan, Democratic Republic of Congo (DRC), Kenya and Rwanda, book and pay off tracks of agricultural produce while still in the gardens.
When the produce ripen, they harvest them and in turn transport them to their countries. In the process, a whole value chain from the real value of the unprocessed products to the buying and transporting that Ugandan traders are supposed to undertake is lost.
"We are responding to complaints from our business people. Our traders are saying they are being denied opportunities to work," said Ojakol.
Ojakol said the trade ministry has written to the identified districts to provide land while the Government will provide the related infrastructure like roads, energy and water.
"We will then go into a public private partnership with people and private companies do develop these facilities," said Ojakol.
The trade ministry will kickstart the border trade points programme at Mpondwe (DRC border), Katuna (Rwanda border), Malaba and Busia (Kenya border) and Bibia and Oraba (Sudan border).
Despite being landlocked, Uganda has emerged as a key distribution and trading point in the Great Lakes region.
This is because of her central location as well as a competitive advantage in agriculture.
Reports indicate that northern region has suffered the most with Sudanese traders moving to book large tracks of cassava, maize and related farm products while they are still in the fields and later harvesting and loading them onto tracks destined for southern Sudan. Sudanese traders have infact entered Acholi, Lango and Teso according to trade officials.
While there is export income earned from this trade, trade officials say the country is being short changed in terms of value and opportunities of employment.
This has not only created an exploitative business relationship where locals are giving away their unprocessed agriculture produce cheaply, it has opened a door for food insecurity in the region as farmers now only plan to sell off their produce instead of storing some for the dry seasons.
In the cross border establishments, warehouses together with related business centres and information points will be established.
'The idea is, instead of crossing the border with the goods, lets take the goods close to the border. In that way you are securing Ugandans. The second and related issue is the complaints of harassment of Ugandan traders in the DRC and Sudan," said Ojakol.
Cross border trade has cushioned Uganda from the effects of the global financial meltdown in the last one year as remittances and demand from the west dwindled.
Last year, Sudan emerged as the biggest consumer of Ugandan products with over $150m earned in exports.
Exports to Kenya, Rwanda and Burundi stood at $118m, $83m and $42m respectively in 2007.
Government has prepared a concept note about the project that will be presented to cabinet.
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