South Sudan and the Democratic Republic of Congo offer export
opportunities for Uganda’s food items and construction materials, but local
demand for cement and steel driven by large infrastructure projects has somehow
reduced export appetite.
But experts say the risks of civil war in South Sudan and DRC
have complicated matters for Ugandan exporters, who are now confronted with
problems of lost supply orders, unpaid invoices and attacks on buses and cargo
trucks by militia groups along major trade routes.
Refugee inflows from South Sudan and DRC to Uganda have put
pressure on social services in border areas, with government officials and
United Nations High Commissioner for Refugees (UNHCR) mobilising funds to buy
food, medicine, blankets and mattresses for new refugees.
Official data shows refugee arrivals from South Sudan hit a peak
of 3,000 per day last year while the total number of refugees received from
both Sudan and DRC is currently estimated at 1.3 million.
Nevertheless, economists argue the two markets still offer
growth potential for Uganda’s economy, particularly for processed food products
and construction materials on account of low agricultural production in South
Sudan and poor manufacturing capacity in the countries.
Export revenues registered in the two markets show relatively
steady gains posted since 2014 but the growth outlook remains unclear.
Data published by Bank of Uganda (BOU) indicates that Uganda’s
exports to South Sudan generated $309.66 million and $225.28 million in 2014/15
and 2015/16 respectively.
Total exports to South Sudan yielded $297.99 million by end of
2016/17. In comparison, total exports to DRC amounted to $160.16 million and
$159.74 million in 2014/2015 and 2015/16 respectively. Total exports to DRC
fetched $190.36 million by close of 2016/17, the data revealed.
Uganda’s cement exports to the Common Market for Eastern and
Southern Africa (Comesa), of which DRC is a member increased from 255,512
tonnes in 2014/15 to 381,455 tonnes in 2015/16.
Total cement imports to the Comesa region fell to 314,552
tonnes, BOU data shows. Total maize exports to the Comesa region grew from
$74.19 million in 2014/15 to $81.97 million in 2015/16. Uganda’s maize exports
to Comesa region dropped to $72.26 million in 2016/17.
The total value of beans exported to Comesa countries rose from
$37.62 million in 2014/15 to $49.05 million in 2015/16. The value of bean
exports to Comesa amounted to $49.11 million by end of 2016/17.
Other grains exported to the Comesa market generated $5.20 million
in 2014/15 and yielded $3.06 million in 2015/16. This product segment grossed
$5.81 million in export revenues earned from the Comesa market during 2016/17.
“Food processing and the construction industry provide a
lot of growth opportunities for Uganda in relation to regional markets such as
South Sudan and DRC.
“Lack of supporting infrastructure in both countries makes
it more attractive for Uganda as a production hub based on proximity,
substantial supply of raw materials and a slightly better labour pool.
“These sectors are labour intensive and could generate more
jobs for and lots of backward linkages,” noted Prof Paul Collier, an
Oxford University economist who visited Kampala recently.
Fresh foreign capital will be required to expand local production
capacity to meet future export demand in these markets.
“We have rice, maize, milk and cassava, which are
attractive in the South Sudan market. There are still persistent challenges in
the agricultural value chain including high electricity costs and poor feeder
roads that need to be addressed,” said Isaac Shinyekwa, a research fellow
at Makerere University.
Culled from The East Africa