Uganda has boosted its exports to Tanzania by almost $140m in the last five years but the performance would be better if the non-tariff barriers were fully addressed.
In the financial year 2015/16, Uganda exported goods worth $95m before increasing to $124m a year, according to figures from the Ministry of Trade.
However, the exports dropped to $91m in the financial year 2017/18 and further to $84m in 2018/2019 due to non-tariff barriers, some of which have been addressed.
Tanzania still charges US$500 to Uganda trucks compared to US$152 charged on Rwanda trucks.
Notably, Uganda’s imports from Tanzania also grew from $78m to $446.
However, Uganda’s export volumes shot to $132m in the 2019/20 financial, the best performance for Kampala in five years.
Uganda’s main exports to Tanzania include tobacco and manufactures tobacco substitutes, mineral fuels, oils, distillation products, paper and paperboard, articles of pulp, paper and board, dairy products, eggs, honey, edible products among others.
The two countries have in recent years deepened commercial ties especially in oil and gas production.
Ugandan experts have been assisting Tanzania in its exploration for gas which Kampala hopes to use at new multi-billion iron ore smelting plant in Kabale, South Western Uganda.
Kabonero speaks out
Uganda’s High Commissioner to Tanzania, Amb Richard Kabonero, said the core priority at the Mission in Dar remains the search for markets for Ugandan exports in Tanzania and other six countries to which the mission is accredited.
As statistics indicate Uganda’s largest export market is the Middle East, Comesa and the EAC.
“Fortunately, our mission is responsible for two of the three export markets, EAC and COMESA. We have worked tirelessly on three bottlenecks that will enhance our exports namely NTBs, reducing the cost of doing business and harmonization of standards in the region,” said Kabonero in an interview with ChimpReports this Saturday morning.
The trade between Uganda and Tanzania is set for a boom when oil production starts.
President Museveni and his Tanzanian counterpart, John Magufuli recently signed a $3.5 billion deal to begin construction of an oil pipeline from Hoima, western Uganda to Port Tanga.
Kabonero said all impediments to bilateral trade are being addressed.
“We are fortunate that their Excellencies the Heads of State of the two countries are seized of these challenges and have instructed us to move expeditiously to solve them,” said Kabonero.
Asked to provide specifics, Kabonero responded: “Earlier this year, their Excellencies agreed that Tanzania should buy Uganda’s surplus sugar which was a great achievement. We are also working hard to eliminate the remaining NTBs on Uganda’s milk exports to Tanzania.”
Kabonero said Uganda’s milk company, Pearl Diaries is about to “start exporting diary products to Zambia and the mission is assisting in finalizing the processes with the Government of Zambia.”
Meanwhile, Uganda’s exports to Rwanda has since dropped from $231m five years ago to $12m to date due to the sour bilateral relations.
Rwanda has blocked Ugandan goods and stopped her citizens from traveling to Uganda, affecting cross border trade.
Uganda’s exports to South Sudan, which is recovering from an armed conflict, have grown from $284m in the financial year 2015/16 to $403m in 2019/20.
However South Sudan government needs to boost security especially the highways to boost bilateral trade.
Ugandan traders were recently abducted and killed in South Sudan.
The East African Community (EAC), with a population of about 168.2 million and a combined GDP of US$ 155.2 billion is one of Africa’s fastest growing regional blocs.
Growth in the EAC is driven by a progressive manufacturing sector characterised by agro-processing and industrial production and exports.
The Export Sector is dominated by tea, coffee and horticulture. The Region possesses significant amounts of extractive resources including oil and gas, high value minerals and renewable energy.
According to the EAC Trade and Investment Report 2018, key developments with potential to influence future trade and investment outcomes, include the positive economic growth of the Region that positions the EAC as a trade and investment hub; the growing Global Value Chains that impact on agricultural production and industrial processes; logistical infrastructural development; and the Africa Continental Free Trade Area (AfCFTA).
The East African Economy expanded at 5.7 percent in 2018, up from 5.6 percent in 2017.
This was attributed to increased infrastructure investment in roads, rail and electricity; increased private consumption as well as recovery of commodity exports buoyed by improved weather conditions.
The construction sector improved in the whole of the EAC. There was also remarkable expansion of the services sector, particularly information and communication technology as well as manufacturing.