7 February 2018

Uganda: Informal Trade Costs Uganda Shs900b in Maize Revenue

Uganda's failure to enforce regional standards aimed at eliminating cheap imports and informal trade is depriving the country of Shs900 billion export revenue annually.

Bank of Uganda statistics indicate that last year, the country formally exported maize worth $70 million (Shs254 billion) out of the 4 million metric tonnes.

However, industrial players are saying the earnings were less than the country's annual revenue potential of $320 million (Shs1.1 trillion) if everybody played their part.

In a bid to protect Uganda's maize from cheap imports outside East Africa and informal traders who distort the market, sector players want government to enforce the regional standards.

In an interview with Prosper Magazine, the chairman of the Grain Council of Uganda, Mr Chris Kaijuka, said: "We want government through the ministry of Trade, to enforce the EAC Maize standards so that traders start trading formally."

He said Uganda is being flooded with maize imports from Brazil and the Southern African countries.

Consequently, Ugandan maize has been subjected to unfair competition which has affected the prices and the country's market.

Mr Kaijuka said once this is done, Uganda's maize will be able to attract a premium price. This means export earnings will increase and more jobs will be created.

UNBS

According to Uganda National Bureau of Standards (UNBS), EAC maize standards were established in 2013 and were ready for implementation by the member countries.

Mr Hakim Mufumbira, UNBS manager Sstandards in an interview with Prosper Magazine said: "Uganda adopted the standards and they are ready for implementation which is the responsibility of the ministry of trade."

But the current structure of Uganda's maize trading business is not favourable to enable implementation.

He said as UNBS, they have translated the standard into several local languages to enable the people in the value chain to understand.

The East African Community (EAC) states agreed on the recommended moisture content for cereals and grains in the region.

The final approval followed Kenya's petition to the EAC in Arusha regarding the deficiencies in the staple foods standards approved by the East African Standards Council in Arusha.

MAIZE SUB-SECTOR

Production. While Uganda produces close to 4 million tonnes of maize annually, the sub-sector contributes to the livelihood of more than 3.6 million households in the country. Maize is a staple food for more than 300 million people on the continent according to Uganda Bureau of Statistics.

Uganda

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