Damali Ssali.
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.
Damali Ssali is
a Trade Development Expert.
Damalie. This is a well researched piece. Surely, I can only comment; how best can the rest of the masses get to know that all is not lost. Many a times we are or the young are bombarded by the would be leaders that all is lost all in the name of politicking.
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