Damali Ssali is a Ugandan Trade Development Expert with over 15 years in senior management. She holds an MBA from France's Grenoble Ecole de Management.
She is also a fellow of the Association of Chartered Certified Accountants, an Associate of the Institute of Public Private Partnerships and a member of The Africa List.
The development
of Uganda’s trade and economy requires efficient, reliable and competitive
transport and logistics.
Unfortunately,
water transport, which is the cheapest and most inclusive mode of transport, is
underdeveloped and underutilized.
As a result,
95% of cargo and people movement is through road transport. This over-reliance
on road transport is unsustainable; with different studies indicate that it has
led to the rapid deterioration of the road assets. The annual road maintenance
cost is estimated at USD 21m.
In addition,
road transport is not the safest mode of transport. The World Health
Organisation (2015) estimates the economies such as Uganda lose almost 3% of
their GDP to road crashes. That is about USD 800m.
Whilst Uganda
has serviceable national road network that covers both the Northern and Central
corridor, the limitation of rail and water transport pushes goods transport
onto roads creating congestion and raising the unit cost of transport over
longer distances.
The current
average transport cost per kilometre stands at USD 2 in Uganda. This is twice
as high as that of comparative middle-income economies which stands at USD 1
per kilometre.
Furthermore,
the World Bank 2016 Logistics Performance Indicator ranked Uganda 58 (out of
180 economies). This ranking must be improved as poor logistics leads to a 0.4%
contraction in the GDP of an economy.
This problem is
going to be further compounded with upcoming Oil and Gas economy. Conservative
estimates report that, during this sector’s peak period of development, an
additional 1.2million tonnes of containerised cargo and over 13,000 jobs and
passenger traffic is going to be added to the current road load.
The existing
road infrastructure is already optimised above capacity and cannot operate with
these new capacities without significant deterioration.
Therefore, the
development of efficient water transport and related logistics services is the
catalyst required to strengthen the autonomy and independence of the Ugandan
economy.
An improvement
of inland waterways will have a very significant impact on the other transport
modes, especially railways and roads, by pulling cargo and passenger traffic to
new logistics supply chains. This will allow for sustainable utilization of
existing transport capacities.
Uganda’s
natural comparative advantage for water transport is evident, as over 30% of
the territory is covered by water. This provides navigable channels through
rivers and lakes.
However, lake
transport is under-utilised. Available data indicates that only 1 million tonnes
(about 8%) of total freight cargo, to and through Uganda, uses this mode of
transport.This demonstrates the
opportunity available, which if tapped into has the potential to lead to an
exponential growth in Uganda’s domestic and cross border trade.
Water transport
can be developed to facilitate trade and tourism. This will not only trigger
economic growth in Uganda but also the East African Community and the
Democratic Republic of Congo. A comprehensive view should be taken on lake
transport development to cater for large scale international traffic.
The development
must include multimodal ship-road-rail-port and logistics services.
Simultaneously the ship building and rehabilitation industry must be catalysed.
Water transport is important in shipping passengers, raw materials,
manufactured products among domestic and international points of trade.
Generally, the capacity of water vessels far exceeds the capacity of rail
wagons, and trucks. Therefore, ports intermodal facilities that have
warehousing, and physical infrastructure for freight transfer from water
vessels to railways and trucks, and vice versa should be prioritised.
Furthermore,
inland water transport is the second least labour intensive compared to other
modes, with pipelines in the lead. It is characterised by low fixed costs
though it has high variable costs related to insurance. The efficiency of a
transport mode can be judged in terms of travel time, safety, frequency,
cheapness, employment generation, trade transactions, environmental pollution,
automation and computerization.Based on
this criteria water transport outperforms road and air transport.
Although Lake
Victoria is strategically located at the convergence of the Northern Corridor
and the Central Corridor, its potential for marine transport has not been fully
exploited. Freight traffic on Lake Victoria is modest. This is mainly due to
poor infrastructure of port handling facilities and few vessels.
However,
despite these limitations, the Lake Victoria basin alone services the economic
activities of several countries. Uganda, Tanzania, Uganda and Kenya directly
share this trans-boundary water resource, while Rwanda and Burundi also benefit
indirectly. The population of this basin stands at 40million, representing
approximately 30% of the entire population of the EAC member countries and a
GDP USD30 billion, about 40% of the total EAC economy. Therefore, the potential
of the Lake Victoria economy is immense if water transport infrastructure is
developed.
The main
categories of cargo transported by water is 70% agricultural (food and live
animals), 20% Ugandan manufactured products and the rest at 10%.Most of the users of water transport are in
the informal sector, using small motorized and non-motorized boats, to
transport goods and services between the islands and across international
borders. As such, development must focus on local passenger transport to nearby
islands and shorelines, small scale local cargo transport, pedestrian cars and
small trucks. The additional advantage of water transport development is that
it will not only catalyse the informal fishing industry but also commercial
fish farming.
It is important
to note that the development of water transport must be in tandem with
addressing environmental degradation issues. The reduction in water levels, due
to extensive deforestation around the various lake basins, if unchecked, will
greatly curtail the navigability of the lakes and rivers.
Uganda can, and
should, exploit its natural comparative advantage and develop water transport,
through efficient infrastructure and logistics services. This will facilitate
domestic and international trade, tourism, employment and economic output.
Uganda is
predominately an informal exporter mainly trading with its neighbours.
According to 2014 Bank of Uganda (BoU) data, the country registered an informal
trade surplus.
The 2014 BoU
data indicates that informal trade accounted for more than 30 per cent of all
Ugandan exports, earning about Shs1.5 trillion. DR Congo, which fetched $139m,
was Uganda’s largest informal exports destination followed by South Sudan and
Kenya, which fetched $119m and $92m, respectively.
Additionally,
data from BoU further indicates that informal cross-border exports earned a combined
$595m in the 2017/18 financial year with DR Congo continuing to dominate as
Uganda’s export destination fetching up to $291m in the period. It was followed
by Kenya at $149m, Rwanda and South Sudan at $54m
each while Tanzania fetched some $45m.
Agricultural
produce, mainly beans, maize, sugar, other grains, bananas and fish as well as
locally manufactured goods were the most informally exported items during the
period.
Therefore, it
is quite important and urgent, that while priority continues to be given to
formal traders, some focus and steadfastness ought to be directed towards
informal cross border traders too.
A 2015 study
conducted by United Nations Economic Commission for Africa indicated that
informal trade in Uganda provided more than 59 per cent of non-farm private
sector jobs, underscoring its significance in addressing the employment
challenge that Uganda finds herself in.
Different
studies indicate that more than70 per cent of women-owned businesses are in
informal trade, accounting for a significant majority of employment in this
sector.
Women spend
much of their income on uplifting family livelihoods, among which include
buying food, paying school fees and re-investing in their enterprises.
Therefore, informal trade, which is mainly dominated by women, must be
supported to enable women improve their disposable income to contribute towards
social and economic development.
It is important
to highlight that women informal cross border traders face a number of unique
challenges that limit their growth opportunities. Key among the challenges is
low knowledge of export requirements, lack of understanding of quality
inspection procedures, lack of information on markets, lack of access to
certification procedures and general gender based harassment as well as the
general lack of appreciation for the certification processes.
The challenges
are compounded by the limited time that women have to invest in their
enterprises therefore they have to rely on middlemen to help them uplift and
get value for their businesses.
However, amid
all this, informal cross border traders have been organizing themselves into
associations, cooperatives, and Saccos, which will help them to reason and
speak with a single voice to advance their cause.
Additionally,
government through the Ministry of Trade and the Ministry of East African
Community Affairs is addressing some of these challenges by developing several
policy frameworks such as Cross-Border Trade Strategy, which seeks to increase
the value of Uganda’s exports of the specified products and services to the targeted
markets over the next five years. Other polices are Micro, Small and Medium
Sized Enterprise Strategy and the Cross-Border Trade Charter.
Government has
also appointed district commercial officers in every district and established
regional integration centres at some busy border points and Uganda Revenue
Authority is implementing the Women Trader’s Trade Facilitation Framework.
Finally, there
are also some other agencies that are supporting cross border trade such as the
Stanbic Business Incubator, which is providing business skills development to
MSMEs, AbiTrust which is providing support to enhance the export capacity of
agri-businesses and Financial Sector Deepening which is looking at provision of
inclusive finance.
However, even
with this kind of arrangement, there is need to ensure that the full spectrum
of informal cross border traders is identified and supported to respond to
existing constraints such as non-tariff barriers, limited export capability,
lack of information, financing and exclusion of women.
This must be
mitigated by putting in place comprehensive interventions and policy regulatory
frameworks that support informal cross border traders given that an
all-inclusive approach will ensure that Uganda leverages on its geographical
location to access the markets around it.
We also need to
enhance capacity of small and medium enterprises to provide products and
services that meet export standards to ensure easy penetration to
intra-regional markets. This will not only enhance cross-border trade but will
also promote social and economic development of Uganda.
Informal cross
border trade provides a significant source of employment, which, if enhanced,
can be the bedrock of the social economic transformation of Uganda.
It is also an
economic buffer that can contribute to sustainable, inclusive and youth
employment.
In the efforts to ease the tax
paying process the URA has launched a Uganda electronic single window system
and warned government organs that make URA’s work complicated, to stop it
immediately.
Dickson Kateshumbwa the URA
customs director revealed that it has come to their notice that traders have
been finding it hard to clear their goods, something that jeopardizes URA’s
work.
Damali Ssali, a senior programs
manager at TradeMark East Africa confirmed the fact that the traders have been
getting time hard to get their goods cleared, however, the new system will ease
the entire process.
Informal Women Cross Border Traders from Elegu Border Post.
Damali Ssali.
Uganda is
predominantly an informal exporter mainly trading with its neighbours.
According to 2014 Bank of Uganda (BoU) data, the country registered an informal
trade surplus. The 2014 BoU data indicates that informal trade accounted for
more than 30 per cent of all Ugandan exports, earning about Shs1.5 trillion.
DR Congo, which
fetched $139m, was Uganda’s largest informal exports destination followed by
South Sudan and Kenya, which fetched $119m and $92m respectively. Additionally,
data from BoU further indicates that informal cross-border exports earned a
combined $595m in the 2017/18 financial year with DR Congo continuing to
dominate as Uganda’s export destination fetching up to $291m in the period. It
was followed by Kenya at $149m, Rwanda and South Sudan at $54m each while
Tanzania fetched some $45m.
Agricultural
produce mainly beans, maize, sugar, other grains, bananas and fish as well as
locally manufactured goods, were the most informally exported items during the
period. Therefore, it is quite important and urgent that while priority
continues to be given to formal traders, some focus and steadfastness ought to
be directed towards informal cross-order traders too.
A 2015 study
conducted by United Nations Economic Commission for Africa indicated that
informal trade in Uganda provided more than 59 per cent of non-farm private
sector jobs, underscoring its significance in addressing the employment
challenge that Uganda finds herself in.
Different
studies indicate that more than70 per cent of women-owned businesses are in
informal trade, accounting for a significant majority of employment in this
sector. Women spend much of their income on uplifting family livelihoods,
including buying food, paying school fees and re-investing in their
enterprises.
Therefore,
informal trade, which is mainly dominated by women, must be supported to enable
women improve their disposable income to contribute towards social and economic
development. It is important to highlight that women informal cross-border
traders face a number of unique challenges that limit their growth opportunities.
Key among the
challenges is low knowledge of export requirements, lack of understanding of
quality inspection procedures, lack of information on markets, lack of access
to certification procedures and general gender-based harassment as well as the
general lack of appreciation for the certification processes.
The challenges
are compounded by the limited time that women have to invest in their
enterprises, therefore, they have to rely on middlemen to help them uplift and
get value for their businesses.
However, amid
all this, informal cross-border traders have been organising themselves into
associations, cooperatives, and Saccos, which will help them to reason and
speak with a single voice. Additionally, government through the ministries of
Trade, and East African Community Affairs, is addressing some of these
challenges by developing several policy frameworks such as Cross-Border Trade
Strategy, which seeks to increase the value of Uganda’s exports of the
specified products and services to the targeted markets over the next five
years. Other polices are Micro, Small and Medium Sized Enterprise Strategy and
the Cross-Border Trade Charter.
Government has
also appointed district commercial officers in every district and established
regional integration centres at some busy border points and Uganda Revenue
Authority is implementing the Women Trader’s Trade Facilitation Framework. Many
of these projects are being implemented by government with support from
development partners such as TradeMark East Africa, DANIDA and DFID, among
others.
However, even
with this kind of arrangement, there is need to ensure that the full spectrum
of informal cross-border traders is identified and supported to respond to
existing constraints such as non-tariff barriers, limited export capability,
lack of information, financing and exclusion of women.
This must be
mitigated by putting in place comprehensive interventions and policy regulatory
frameworks that support informal cross-border traders given that an
all-inclusive approach will ensure that Uganda leverages on its geographical
location to access the markets around it.
We also need to
enhance capacity of small and medium enterprises to provide products and
services that meet export standards to ensure easy penetration to
intra-regional markets.
This will not
only enhance cross-border trade but will also promote social and economic
development of Uganda.
Informal
cross-border trade provides a significant source of employment, which, if
enhanced, can be the bedrock of the socio-economic transformation of Uganda.
It is also an
economic buffer that can contribute to sustainable, inclusive and youth
employment.
Ms Damali Ssali, the Ag. Country
Director TradeMark East Africa, Uganda believes that the recently launched
Trade Information Portal will further improve the ease of doing business in
Uganda through making information about Uganda’s exports, imports and goods in
transit readily available for traders and consumers alike.
“The most recent World Bank Doing
Business Report indicated that Uganda had declined from 115 in 2017 to 122 in
2018. We expect that the launch and
operationalisation of the Trade Information Portal will contribute to Uganda’s
improvements in the Word Bank ranking on ease of doing business in 2019,” Ms
Ssali noted at the launch of the trade information portal.
“The Uganda Trade Information
Portal is a trade facilitation platform providing access to fully transparent
practical step-by-step guides to the licenses, pre-clearance permits and
clearance formalities for the most traded goods in and out of Uganda: at each
step, the trade portal tells the user where to go, who to see, what documents
to bring, what forms to fill, what costs to pay, what law justifies the step
and where to complain to in case of a problem.
“The Trade Information Portal is
implemented by the Ministry of Trade Industry and Cooperatives (MTIC) and the
National Trade Facilitation Committee, in partnership with the East African
Community Secretariat (EAC) and with support from United States Agency for
International Development (USAID), TradeMark East Africa (TMEA), United Nations
Conference on Trade and Development (UNCTAD) and International Trade Centre (ITC).
Last Thursday, Uganda government
and development partners formally handed over the new Elegu One Stop Border
Post to Uganda Revenue Authority (URA) – the agency charged with managing all
the country’s borders.
This technical handover was
graced by representatives from Uganda, South Sudan and development partners.
Costing up to about USD 10
million, the Elegu one stop border post (OSBP) was funded by the United
Kingdom’s Department for International Development (DFID) through TradeMark
East Africa and government of Uganda.
To many, the completion and
consequent handover of this vital facility is a new beginning that will further
improve trade between Uganda and South Sudan, which is by the way already
massive with the latter ranking as the former’s second biggest exports
destination.
According to statistics from the
central bank, Uganda in the 2017/18 financial year alone exported goods worth
USD 311.34 million to South Sudan compared to USD 14.54 million of imports from
the same country. Uganda’s exports to South Sudan included informal exports worth
USD 54.17m in the same period.
Furthermore, border records
indicate that over 300 cargo trucks are cleared at the Elegu-Nimule border
everyday. Plus, there are more than 1000 informal cross border traders
operating in the same area.
In a brief interview with traders
and truck drivers at the Elegu market, many were very positive that this
milestone infrastructure would facilitate trade through reducing clearance
times and increasing collaboration between the two neighbors.
“ It is the first of its kind. Our
biggest problem has always been floods at the clearance point and delayed
clearance. But we have been told that the Elegu border post will solve these
issues. We are optimistic that business is changing for the better,” Mr Nyero
Daniel, an informal trader noted.
Meanwhile Ms Molly Andego, a
cross border trader noted that now that the infrastructure is in place, it
should be equipped with all facilities that are in other OSBPs across the
region.
“ We thank everyone that
contributed to this. It has taken long but it is finally here. We expect that
at the soonest, this Elegu border post will be fitted with all systems and
resources like they are in Busia and Mutukula border posts.”
Slow Movement on South Sudan side.
Nonetheless, while the Elegu
border post is ready to facilitate trade, the Nimule side is not. In
functionality, a one stop border post connects two countries and as such, must
have presence at both sides of the border, in this case Elegu for Uganda and
Nimule for South Sudan.
Unfortunately however, even
though DFID and TradeMark EA are committed to constructing the required
infrastructure in Nimule, pockets of instability in South Sudan have delayed
the process.
In a recent interview, Ms Damali
Ssali, the Ag. Country Director TradeMark East Africa, Uganda noted that “For
Nimule, due to the crisis is South Sudan; construction of the refugee reception
area is underway. When peace returns in South Sudan, and funding is available,
the Nimule border will be fully constructed.”
But according to Hon Mou Mou
Athian Kuol, the undersecretary in South Sudan’s ministry of Trade, Industries
and East African Community affairs, the recently signed peace agreement between
H.E Salva Kiir and former Vice President – Hon Riek Machar will last and thus
the construction of the Nimule border post will be fast-tracked.
Hon. Mou Mou Athian Kuol further
promised that together with the S Sudan cabinet, they are going to make sure
that Ugandan Traders are not mistreated in S Sudan.
“I have noted the issues about
continuous mistreatment of Ugandan Traders by our people of South Sudan. As
soon as I go back to South Sudan, I am going to table these issues to my bosses
in the cabinet. I promise that this will be addressed. There is no reason for
mistreating people that bring goods and services to us. We are all in business
and we need each other,” Hon Mou Kuol noted.
The Elegu OSBP is among the over
ten one stop border posts constructed by TradeMark East Africa in the East
African Community. The others include; Mirama Hills Uganda / Kagitumba Rwanda,
Busia Kenya/ Busia Uganda, Malaba Kenya / Malaba Uganda, Taveta Kenya / Holili
Tanzania, Mutukula Tanzania / Mutukula Uganda, Kobero Burundi/ Kabanga Tanzania
and Tunduma Tanzania.
Stakeholders review the master plan for Gulu Logistics Hub.
The havoc that the over two
decades-long Joseph Kony-led Lord Resistance Army (LRA) war left in northern
Uganda was massive.
To some, it is one that has had
permanent scars on the region and it will for a long time be remembered as the
worst thing to have ever happened to that part of the country and Uganda as a
whole.
According to a report by The
Guardian, the rebel outfit, at its peak, displaced nearly two million people in
areas within and around northern Uganda.
“By 2007, the conflict had seen
more than 10,000 people massacred, while twice that number of children [had]
been abducted by LRA and forced to work as soldiers, porters and sex slaves,”
the report says.
However, around 2005-6 normalcy
had started to return after the Uganda People’s Defence Forces (UPDF) flashed
the stubborn and now scampering LRA outfit out of the region into the jungles
of DR Congo, Central African Republic and parts of South Sudan.
To date, the rebel outfit is
still holed up in the jungles far away from our borders and security agencies
have indicated it has been greatly weakened with no capacity to mount another
insurgency or conduct raids within Uganda.
Therefore, this has given
northern Uganda the space to pick up the ruins with key sectors such as health,
transport, education and tourism showing a fair share of growth.
Beyond this, small and medium
businesses have built back to become profitable. Safe cross border trade has
also returned.
Even more interesting, the return
of peace has boosted trade with South Sudan; the second biggest destination of
Uganda’s exports in the East African region. According to statistics from the
central bank, Uganda in the 2017/18 financial year alone exported goods worth
USD 311.34 million to South Sudan compared to USD 14.54 million of imports from
the same country.
However, notwithstanding the
positive strides, the northern region which is an engine of the northern trade
corridor, serving as links to South Sudan and parts of eastern DR Congo, has
remained undeveloped.
The northern trade corridor
directly serves six countries – Kenya, Uganda, Rwanda, South Sudan, Burundi and
parts of DR Congo, with 3 of them bordering the northern region thus
underscoring it as an importance trade hub. Therefore, one would imagine what
it would deliver if there are incentives to make trade better.
The good news is that this
underdevelopment might become a thing for the past if all the ‘set in motion’
trade facilitation projects and other initiatives for this region are
completed.
It is expected that before the
end of 2022, northern Uganda will have an efficient 24 hours open
one-stop-border-post (OSBP) linking Uganda to South Sudan. The region will also
have a new and effective metre gauge railway and a modern logistics hub
facility.
All these projects are to be
developed from a pool of resources raised by the government of Uganda,
Trademark East Africa, the United Kingdom’s Department for International
Development (DFID) and European Union (EU).
In essence, the three pivotal
projects mean northern Uganda and the country at large will not be the same in
terms of development.
Elegu/Nimule One Stop Border Post (OSBP).
As part of the East African
region’s sustained efforts to facilitate trade, over 10 OSBPs have been
constructed across East Africa since 2013 with funding from national
governments, and the United Kingdom’s DFID through TradeMark East Africa.
An OSBP is a border facility that
consolidates border control functions in a shared space for two countries
bordering each other thus enabling faster entry and exit of people and cargo.
The latest beneficiaries of this
OSBP program are the local community, traders and tourists plying the
Elegu/Nimule route.
“As the main gateway into South
Sudan from the port of Mombasa, the Elegu-Nimule border post is of strategic
importance to the East African region. The border is extremely slow, and Nimule
takes an average of four days to process imports,” notes a report from the
TradeMark East Africa website.
The statement which also
highlights the costs such delays impose on traders, seeks to show why it is
important to construct such as facility at Elegu/Nimule.
“These delays can be attributed
to inadequate border infrastructure, insufficient quality and quantity of
technical equipment, poor border design, and complicated procedures based on
centralized control, and multiple border organisations working in isolation,”
the report further says.
Different surveys conducted since
the OSBP concept was rolled out in the region indicate that the average border
crossing time for cargo trucks and travellers has at select borders reduced by
between 30 and 90 per cent, significantly prevented harassment of cross border
traders by officials and reduced corruption at the borders.
Therefore, it is expected that on
completion and consequent commissioning, the Elegu/Nimule OSBP will contribute
to the ‘ease of doing business in the region’ by delivering similar benefits
like the other OSBPs are doing at other entry and exit points.
In a recent interview, Ms Damali
Ssali, the Ag. Country Director TradeMark East Africa, Uganda confirmed that
the Elegu border (Uganda side of the OSBP) was complete with a technical
handover slated for 15th November 2018 while works in Nimule (South Sudan side
of the OSBP) had stalled following recurrence of pockets of instability in the
area.
“Elegu border construction has
been completed. The building will be handed over to the Uganda Revenue
Authority which is the lead agency at the border in November.For Nimule, due to the crisis is South Sudan,
construction of the refugee reception area is underway. When peace returns in
South Sudan, and funding is available, the Nimule border will be fully
constructed,” Ms Ssali noted.
Tororo-Gulu Railway.
On October 17, 2018, the EU
accepted to finance the rehabilitation of the over 400kms Tororo-Gulu metre
gauge railway.
The works are expected to start
before the end of this year and will be completed before or by 2022.
The railway line has been out of
service since 1993 due to neglect and the prolonged LRA war in northern Uganda.
As part of this commitment, the
EU has agreed to disburse a grant of EUR 21.5 million (about UGX 93 billion)
from the European Development Fund (EDF) while the Government of Uganda will
contribute counterpart funding equivalent to EUR 13.1 million(about UGX 60 billion)towards the rehabilitation of this key
transport infrastructure in the region.
“We are proud to support the
Government of Uganda’s decision to revitalise this crucial economic link,” EU
Head of Delegation to Uganda, HE Ambassador Attilio Pacifici said, noting that
this project was part of the many actions taken by the European Union to
support northern Uganda.
Such actions include the recently
launched EURs 150 million Development Initiative for Northern Uganda (DINU) as
well as the provision of humanitarian assistance to refugees and support to the
host communities.
Honourable Matia Kasaija, the
Finance minister noted that the Tororo-Gulu metre gauge railway rehabilitation
project is important for trade facilitation for Uganda and “will open up
northern Uganda, parts of DR Congo and South Sudan in terms of freight.”
During its days of service, the
Tororo-Gulu railway line was a crucial economic facility along the East African
Northern Trade Corridor linking the port of Mombasa and eastern Uganda to
northern Uganda, as well as to South Sudan and DR Congo. It is expected that it
will serve the same purpose or much more once it is completed.
Furthermore, the planned revamp
of the Tororo-Gulu railway is timely considering that the realisation of
Uganda’s Standard Gauge Railway (SGR) dream may take longer than earlier
anticipated. This sad reality comes at the back of China’s delayed approval of
finances for the construction of the Kenya Kisumu to Malaba SGR line which is a
must if Uganda is to make any progress.
The unfortunate development was
revealed by Hon Matia Kasaija who recently told Daily Monitor, a local
newspaper that government has ‘put on hold’ the SGR venture and has instead
turned attention to revamping the old metre-gauge railway network until
unresolved issues with Kenya and China have been concluded.
“It is apparent the SGR is going
to take us a lot of time to complete. First, we have to wait for Kenya to reach
at the Malaba [border] point then we can start,” Mr Kasaija noted.
But in a quick rejoinder, Hon
Monica Azuba Ntege, the minister of works and transport noted that reports
appearing in a cross section of the media alleging that Uganda had abandoned
the SGR project were false and unfounded.
Hon Azuba noted that Uganda was
firmly committed to the project and had already awarded a consultancy and
construction tender for the same. She added that the country was now making
steps towards signing a loan agreement with Exim Bank of China before rolling
out the project.
“Some 90 per cent of cargo comes
to Uganda by road and this has really increased our road maintenance costs
which we know shall come down drastically once the SGR is in place therefore we
cannot afford to abandon the project,” Hon Azuba said as quoted by Daily Nation,
a Kenyan newspaper.
But as it stands, the realization
of either one or both projects works well for country.
Gulu Logistics Hub.
Jointly funded by EU, Government
of Uganda and DFID through TradeMark East Africa to a tune of USD 8.8 million;
works on the over the 22-acres Gulu Logistics facility are scheduled to start
in January 2019 and will be completed by 2021.
On completion, this freight and
logistics facility will have a spacious container yard, container freight
station (CFS), container cleaning and repair station, a vehicle holding
section, an access road connecting the hub to the main road and an administration
complex.
The Gulu Logistics hub will also
have a railway sub-station; directly connected to the Tororo-Gulu metre gauge
line, which will receive and dispatch in and outbound trains in addition to
having sufficient space for loading and unloading wagons.
Important to note, since the end
of the war in northern Uganda and the return of relative stability in South
Sudan and eastern DR Congo, Uganda has been playing a vital role as a
distribution hub for the two areas.
According to a World Bank study –
Uganda Diagnostic Trade Integration Study – importers in South Sudan and DRC
keep supplies in bonded facilities in Kampala before bringing them into either
country as and when needed.
However, with the assurances of
shorter lead times, Uganda has seen transit volumes grow, which has led to the
emergence of a distribution industry especially in Jinja and Kampala.
Nonetheless, the over dependence
on Kampala and Jinja distribution hubs which sit some 334kms and 388kms away
from Gulu respectively and sometimes opting for goods moving from as far as
Mombasa Port directly to northern Uganda, South Sudan or eastern DR Congo,
continues to have its own shortfalls.
Key among these is supply
shortage and scarcity caused by delayed deliveries and accidents occasioned by
fatigued cargo drivers.
Therefore, the construction and
consequent ‘operationalisation’ of the Gulu Logistics Hub is expected to
address these issues that continue to hamper the seamless distribution of cargo
in northern Uganda, South Sudan, and parts of DR Congo.
While addressing delegates at the
September 2018 Global Logistics Convention in Kampala at Sheraton Hotel, Mr
Adrian Green, the Head of Growth and Economic Management at UKAid, described
the logistics sector as the fuel that drives economic growth and committed on
behalf of development partners to continue supporting it.
“Sustainable development is
directly linked to how the logistics sector facilitates trade. Perhaps for too
long, development partners have over looked this and focussed on rural
development and ignored that we need to focus as well on logistics and
transportation. As development partners, we recognise the critical importance
of this sector and would like to help address the key challenges it faces,”
Adrian Green said.
To employ Hundreds and benefit Millions.
At the construction stage, these
projects are expected to employee at-least 5000 people including over 80 per
cent local residents while after completion they will directly and indirectly
benefit millions.
Uganda’s 2014 population census
showed that the northern region had about 7.2 million people. South Sudan has a
population of about 15.6 million people while Eastern DR Congo has more than 5
million people.
According to Ms Damali Ssali, the
infrastructure projects that are being implemented in northern Uganda will
further cement Uganda’s status as a distribution hub owing to its natural
geographical location.
“Uganda’s economic development is
premised on increased exports and job creation. Northern Uganda is a gateway to
Uganda’s export and re-exports to markets in South Sudan, DRC, Central African
Republic and North Western Kenya. Therefore opening up this trade route with
key trade facilitation infrastructure does not only catalyst the creation of
jobs (through exports if products manufactured and/or cultivated in northern
Uganda) but also re-exports.”
DINU makes the projections even more interesting.
The implementation of these
projects gels well with the over 150 million EURs ‘Development Initiative for
Northern Uganda’ (DINU); a government of Uganda integrated programme that is
being implemented in over 33 districts of Acholi, Karamoja, Lango, Teso and
West Nile for a duration of six years (2017-2023).
Supervised by the Office of the
Prime Minister (OPM), DINU is financed by Government of Uganda (11.954 million
EURs), EU (132.8 million EURs), DFID (2.67 Mio EUR), the Federal Republic of
Germany (1.8 million EURs), UNCDF (0.352 million EURs) and UNICEF (1.056
million EURs).
To the people of northern Uganda,
these developments are a welcome relief that will partly heal decades of suffering
and perceived neglect.
“The future looks bright for us. We
have been told that much of the funding for these projects has already been
secured. We are optimistic that after the dark days, our region is picking up
and many of us will get employed. We can only wait and see,” Carol Adokorach, a
resident of Gulu district said.
Further, expectations are high at
all levels that these projects combined will not only improve the efficiency of
Uganda’s trade but also attract more foreign direct investment (FDI).
It remains to be seen how much an
impact these projects will have on communities in this region. However, for
now, northern Uganda can toss to greater times ahead.
Uganda increased its export earnings by 7.23% to USD
2.8billion in the 2017/2019 financial year, up from USD 2.69billion earned last
year. This is according to the Ministry of Trade, Industries and Cooperatives.
Most of Uganda's exports, mainly agricultural and mineral
products such as coffee ( USD 492 million), gold (USD 337 million), fisheries
and others are going to the COMESA countries especially Kenya and South Sudan,
followed by the EU, the middle East and Asia.
Uganda has been working with several development partners
such as TradeMark, UKAid, USAid and EU among others to further boost trade.
According to Damali Ssali, the Ag. Country Director
TradeMark Uganda, the organisation through its funders - UKAid is now focusing
on building trade logistics hubs in Gulu, Jinja and Busia that will comprise of
warehouses, cold chain processes, Standard Monitoring Units and many other
elements that support production of quality products that can be exported.
Gulu leaders have asked the
Government of Uganda and TradeMark East Africa (TMEA) to accelerate the process
of the construction of the first ever trade logistics hub in Gulu.
The leaders made this call during a stakeholder engagement
meeting and field supervision for the proposed Gulu Logistics Hub Facility in
northern Uganda, between the project developers - EU and TMEA (who are funded
by the DFID for this project), Ministry of Works and Transport, Uganda Railways
Corporation (URC), National Environment Management Authority (NEMA), Government
Valuers, Gulu District leaders and Gulu Railway Station community.
Dennis Accellam, the LCI Chairperson Go Down sub-ward, where
the project will be located said the locals are eager and waiting for the project
to kick off.
The proposed Gulu Logistics Hub is a USD 9 million TMEA and
EU funded project in partnership with the Government of Uganda.
According to Damali Ssali, the Ag. Country Director for
TMEA, Uganda, the project is intended to facilitate Uganda's import trade and
easy trading around the northern corridor.
"As TradeMark EA, our main aim is to facilitate
processes and infrastructure that ease trade in the East African Community. We
have worked on major one-stop border posts on several Uganda Borders. We are
also working on this hub because it is a major route that will enable trade
between Uganda, South Sudan and Eastern DR Congo among other countries. Often
trucks that bring goods to South Sudan have been coming back empty. With the
hub, we expect a change," Damali Ssali said.
Aisha Inshuti holds
dual Rwandan-Ugandan citizenship. Having completed university, the 24-year-old
ventured into a cross-border business of selling women's hair products. She
buys them in Uganda and sells them in Rwanda.
"Crossing the
border is sometimes difficult especially with politics these days," she
tells DW. "Many Rwandans have dual citizenship. You can have both Rwandan
and Ugandan nationality, but these days we hear there is a problem with the
Ugandan and Rwandan government," she said. Nowadays, she claims, Ugandan
immigration officials even go to the length of confiscating the Ugandan
identity cards of people with dual citizenship. "It will take you ages –
if not forever – to get it back, so we have resorted to only using the Rwandan
national ID," Inshuti says.
At a bus terminal in
Uganda's capital Kampala, Joki Wanjeri, a 27-year-old Kenyan trader, waits for
her bus back home to Nairobi. She deals in women's footwear and shares
Inshuti's sentiments. Ugandan officials create obstacles that impede free trade
between the two countries, Wanjeri says. "Once you reach the border on the
Ugandan side they want money [bribes], otherwise you cannot cross," she
laments. "It's easy for the Ugandans to cross from Kenya with our goods,
but when it comes to us it's a different story."
Political
wrangling to blame.
While Akol Amazima, a
Ugandan political analyst cannot confirm the traders' experiences, he does believe
that the root of problems lies in intra-regional politics. The problems at the
borders are often the result of political differences between the countries.
"When the political situation between leaders is not good, it affects
traders," he says.
Amazima points to the
current "bad blood" between Uganda's President Yoweri Museveni and
Rwanda's President Paul Kagame. "So traders who go to Rwanda, some of them
are mistaken for spies and that affects their performance."
The East African
Community (EAC), comprised of Uganda, Kenya, Tanzania, Burundi, Rwanda and
since 2016 South Sudan, wants to improve trade relations. The bloc has ratified
a common market and a customs union. In 2013 the countries signed a protocol to
implement a monetary union and single East African currency within 10 years.
The EAC was first called into life in the late 1960s. It collapsed in the 1970s
and was revived in 2000. Regional heads of state have since emphasized the need
and urgency for the EAC to work harder, to fast-track the development of the
bloc. Over the past few years, however, political wrangling has again hampered
much needed progress.
Tanzania and Kenya have
experienced similar cross-border disputes as Uganda and Rwanda. "When
President [John] Magufuli of Tanzania and his counterpart in Kenya, Uhuru
Kenyatta, were not seeing eye to eye, it affected the traders in the Namanga
[border town],” says Amazima.
"Whenever somebody
was going to Tanzania they would strictly scrutinize him, so much so that even
the cows that had crossed to Tanzania were auctioned off." The incident in
in late 2017 saw the Tanzanian government confiscating over 1,000 cattle which
Masai herders had brought over the border from Kenya for grazing. Masai from
both Kenya and Tanzania, who claim historical ownership of the land, had been
crossing the border for years.
Kenya, Tanzania and
Uganda have also been blaming each other for exploiting the low import duties
on sugar. The trade dispute resulted in Tanzania slapping Uganda with a 25
percent import duty on sugar, and Uganda and Tanzania taxing Kenyan sweets and
sugared drinks.
Revenue
bodies receive a boost
One company which is
trying to improve the regional cooperation is TradeMark East Africa, a private
donor-funded initiative working with EAC governments. It focuses on bottlenecks
that affect trade, particularly imports and exports.
"One of the key
things we have done is to support the revenue authorities in East Africa to
implement customs management systems," says Damali Ssali, director of
TradeMark East Africa's Ugandan office.
"If you are importing
or exporting, customs will take about 80 percent of your transaction
time." The company helps governments in the region to implement customs
management systems that take only 24 hours and can be accessed from anywhere in
the world. "You don't have to waste your time in Mombasa port, you can
just come straight through to Uganda," says Ssali.
Ugandan car importer
Michael Odida told DW that he is one of the traders who has profited from the
EAC common market and customs union. "Regarding the single customs
territory – it has improved. If I need a vehicle cleared in Mombasa my team
will have the whole process done from Kampala. As much as it has its
shortfalls, overall I think it is a good innovation," Odida says.
Uganda Revenue
Authority spokesman Vincent Seruma explains that the protocol on the
establishment of the East African common market has greatly improved trade
among member states. "We have our staff in Mombasa, we have Rwandan staff
in Mombasa, we have Tanzanian staff in Mombasa, so if there is any kind of
decision to be made between the different revenue authorities, it is much
easier to resolve an issue because we are working a little closer," Seruma
says.
Dream
of a single currency
Another underlying factor
that has affected regional trade, according to Amazima, is the fluctuating
value of local currencies against the US dollar and the fact that there is no
common East African currency. "At times the dollar affects these
currencies differently, so by the time you reach the border you want to change
your money you end up losing some money," he says.
An EAC monetary union,
which would pave the way for a single currency across the six countries, could
ease trade within the region. Players in the region have been divided about
this however, arguing that more time is needed.
The International
Monetary Fund has long been saying that truly integrated markets are key to
economic productivity and growth, not only in East Africa but Africa as a
whole. Intra-African trade stands at an estimated 16 percent. The recently
ratified African Continental Free Trade Area (AfCFTA) deal is expected to boost
that figure to 52 percent among the 55 African Union members by 2022.
Uganda Freight
Forwarders Association (UFFA) in partnership with the National Logistics
Platform and the Ministry of Works and Transport is hosting the 2nd edition of
the Global Logistics Convention from 17th to 18th September, 2018 at Sheraton
Hotel, Kampala under thetheme: “Freight
Logistics: The Edge to Competitiveness”
The Convention,
sponsored by the Department for International Development (DFID) through
TradeMark East Africa will bring together over five hundred (500) participants
from across the world who will include Logisticians, Finance Institutions,
Insurance firms, Manufacturers and Traders, Truck and Equipment dealers,
Government officials, Civil Society Organizations, Development Partners,
Academicians, and other private sector stakeholders from all over the region.
The event offers a
unique opportunity to share best practice in trade and policy, to engage with a
wide range of stakeholders, and to redefine, the changing roles,
responsibilities and emerging trends in the development of Transport and Trade
Logistics as a driver for productivity and competitiveness.
The Convention will
include a cocktail of tailor-made activities such as key note presentations,
motivational talks, conferences, stimulating discussions, sharing sessions,
exhibitions, media engagements and networking events which will be facilitated
by experts in the sector, government officials and development partners from
within and beyond the region.
“If we are efficient in
transport and Uganda being where it is today – Land linked and in the middle of
the regional market, and link very well, then we can create and benefit from
several opportunities. Competitivenes is about efficiency and productivity. We
need to know; what are the opportunities? What are the challenges? This is what
we must focus on. I thank the Government of Uganda , TradeMark and all partners
for work done so far”. Gideon Badagawa, the Executive Director Private Sector
Foundation Uganda (PSFU) said at the pre-convention press conference held today
– 11th September at Sheration Hotel, Kampala.
At the same event,
Hussien K, Kiddedde, the Chairman organizing committee also UFFA chair
commented “The conference’s list of speakers was carefully crafted by our team
to deliver a wide range of topics in the Logistics industry that stretches
across multiple sectors. Their success in creating an agenda with such a rich
variety of key discussion points has attracted a number of leading figures and
experts travelling from around the world to join us”.
Damali Ssali, the Ag.
Uganda Country Director for Trademark East Africa said that the organisation
and her partners will continue to provide technical support to the logistics
industry in the next three years.
“Over the last two
years, we provided technical assistance to support the logistics industry
develop the private sector logistics strategy. This was more to see that our
logistics industry develops a strategy that complements the government policy
for example on local content. It’s to ensure that the industry benefits from
our upcoming oil and gas economy,” Damali Ssali noted, adding;
“In the next 3 years,
our support to the logistics platform and private sector is also going to be in
that same direction.We aim to see that
we optimise competitiveness and cost effectiveness. We also want to see that
the legal framework for the industry is enhanced. In all, we want to see our
industry able to compete favourably and also deal with the challenges together.
If this is done, we shall be able to compete in huge markets like that of DRC.”
Weighing in on a theme
of a wide significance will be industry leaders from Harvard, Singapore,South
Africa andUAE. Notable to mention is
Issa S. Baluch; founder ofSwift Freight
International. He has been a Senior Fellow of theAdvanced Leadership Initiative of Harvard
University and currently serves on the Dean’s Council at Harvard Kennedy School
and acts a visiting Chair Professor of other Universities focusing on
multimodal transport.
Delegates can also look
forward to an insightful series of sessions spotlighting developments and
trends centring on The changing global marketplace (integration, connectivity,
consumer expectations, multi-sourcing, environment, safety, security, social
responsibility, health etc.)and how
this is increasinglyunderpinning the
critical role of logistics as an engine of social economic growth and
development among others.
