Uganda’s intra-Africa trade still a challenge as exports increase by 52%

Uganda’s participation in intra-Africa trade has remained a big challenge despite the signing of the African Continental Free Trade Area (AfCFTA) agreement which aims at creating a single, liberalized market and reducing barriers to capital and labour to facilitate investment.

According to the World Bank, Uganda’s exports increased to $674.54 million in March from $349.44 million in February 2023. The country’s most important export is coffee (22 per cent of total exports) followed by tea, cotton, copper, oil, and fish.

Uganda’s main export partners include; Sudan, Kenya, DR Congo, Netherlands, Germany, South Africa, and UAE. Olive Kigongo, the president of the Uganda National Chamber of Commerce said the AfCFTA presents a promising offer of continent-wide commercial market access for Ugandan firms to significantly expand their exports to new markets.

The expansion of the market requires the evaluation of new products, improving quality. AfCFTA is a free trade area encompassing most of Africa, established in 2018 by an agreement which has 43 parties and another 11 signatories, making it the largest free-trade.

“Much of Uganda’s exports are concentrated within East Africa’s markets. AfCFTA presents an opportunity for Uganda to expand to new markets. These opportunities bring increased competition and require us to improve the quality of our produce,” she said. 

She said Uganda’s economy and other countries economies are made of small and medium enterprises (SMEs) but access to affordable finance continues to be a challenge to all of them. The Chamber of Commerce is looking to partner with finance institutions for affordable financing and training of more than 300 women-led SMES on an exploration of market opportunities and prospects under AfCFTA.

“I call upon political leaders on the continent to fast-track the non-tariff barriers that hinder the progress of the private sector. We want those challenges that stop us to drive actively and participate commercially, to benefit from the intra-regional markets within East Africa region and international market addressed,” Kigongo said.

AfCFTA secretary general Wankele Mene said if we don’t establish our own supply chain, we will be at the back of the queue for whatever is required to overcome the challenge.

“Africans' challenges are Africa's opportunities. For us to strengthen the pharmaceutical sector, agricultural processing, we must leverage of rules of AfCFTA,” he said 

“The continent is facing the challenge of lack of unified trade currency. Every time there is a business transaction between two African countries, they use a third-party currency. This must stop. We have developed a mechanism that the two countries trade in their local currencies as we wait for the solution,” he said.

Francis Mwebesa, minister of Trade Industry and Cooperatives said Uganda sees AfCFTA as a vehicle for unlocking the potential of intra-African trade, reducing the deficit and providing the much-needed employment and revenue.

“A regional market offers real opportunities for expanding Uganda's industrial base and other opportunities for growth of industrialization in the country. He said pan-African logistics such as infrastructure and connectivity and other challenges such as non-tariff barriers raised by the private sector and Uganda National Chamber of Commerce will be addressed. We are working with our trade partners to lift the non-tariff barriers like it was done on the country’s milk exported to Kenya. 

“We condemn the unnecessary terrifying trade barriers such as roadblocks and exorbitant taxes at various board points. At the ministry of Trade, there is a desk mandate to monitor these trade barriers,” Stephen Asiimwe the chief executive officer of Private Sector Foundation Uganda said.