By Jonathan Kamoga
Ugandan manufacturers and traders exporting to the volatile Eastern region of DRC are reeling over losses occasioned by the ongoing war between the M23 rebel group and the DRC government.
Many of them have in the past week either scaled down or completely stopped operations albeit temporarily, a move that will see a sharp decline in trade volumes between the two countries that has lately been on a steady increase.
Last week, the M23 rebels took over Goma, the capital and strategic business hub of the North Kivu province in Eastern DRC, escalating tensions and bringing business to a standstill.
DRC, the largest East African Community partner state by land size has for the past years metamorphosed into one of Kampala’s key trade partners and an alternative market for Uganda amidst recent trade wars with neighboring Kenya and Rwanda.
According to the Uganda Manufacturers Association, many exporters under this umbrella have scaled down operations in DRC, a rapidly growing market for them, because of the tensions that have since closed key logistic lines.
The association has reportedly advised members to look for alternative markets in the meantime but not to stop production, especially for consumables which are some of Uganda’s main exports to DRC.
“We (UMA) have been on top of this shock. We want to view it as a shock and not a permanent situation. What however is the biggest challenge is that supply lines have been cut and in the meantime we are advising our members to explore new lines,” Dr Ezra Rubanda, the UMA executive director said.
Among the new lines, he added, could include airlifting products although this would be rather expensive and also since most direct flights from Entebbe to Kinshasa have been cancelled.
Mr Ian Rumanyika, the head of external and corporate affairs at Uganda Baati limited a roofing sheet’s manufacturer, and member of the Safal Group with presence in Kenya, Uganda, Tanzania among others confirmed that the group was already counting losses after closing operations in Goma.
“In Goma, we have a showroom and it is where we put our tonnage in DRC. From here, other customers can then pick it. We have been keeping about 5,000 of tonnage here monthly,” he said.
This monthly tonnage, he added, is worth about US$6.5m that the company is losing after suspending operations and they, like many others, can only hope that the situation will calm down.
In the meantime, he confirmed that the company was weighing the option of exploring new markets.
Absa, ENS Africa, A&O Shearman and Nomura Advise Asahi Holdings on USD 2.3bn Acquisition of 65% Stake in EABL“It is a huge loss for any business to have a monthly income of $6.5m put on hold. It has greatly affected us but we are hoping things will get better,” Rumanyika noted.
For traders , especially those using road through the common border points of Bunagana and Mpondwe, business for them too is at a standstill because they cannot cross.
According to Mr Fred Kasule, a Ugandan trader exporting building materials to DRC through Bunagana, traffic along this route has reduced as truckers and business people fear for potential loss of lives and goods respectively.
“There is still alot of fear to cross in (Into DRC). You just can’t be sure of what can happen. The M23 announced that it will soon open up business and as for now we wait. Many colleagues still have trucks parked at the border point and those with perishable goods have either made losses or decided to sell them in Uganda cheaply,” he said.
Last week, the country’s flagship carrier, the Uganda Airlines announced the immediate suspension of all flights to Kinshasa due to the escalating unrest, a move that further hampered the smoother movement of people and goods.
“We will continue to monitor the situation and will communicate with all our guests once it is safe to resume services,” the airline said in a statement.
In the meantime, the ministry of trade, industry and cooperatives together with actors from different government agencies and ministries like foreign affairs, works and defence are currently devising means of continuing trade among which are alternative markets and opening up safe trade corridors in eastern DRC.
“For the situation in Eastern DRC, there is not much we can do as Uganda as currently it is on the level of the (EAC) heads of state whom we hope can solve it soon,” Mr Francis Mwebesa, the country’s minister for trade told CEO East African Magazine.
The minister however could not immediately offer statistics on the current the scope of the current loss.
According to 2024 records from the Uganda Bureau of statistics, the DRC was the DRC was Uganda’s second highest export destination country accounting for 8.6 percent of the country’s total export volume.
In June 2024 alone for instance , Uganda exported US$60 million more than it imported with the DRC as its largest market within the period under review.
Kampala primarily exports products like cement, beverages, vehicles, iron and steel, salt and agricultural commodities like maize, flour, cassava flour, fruits, and vegetables to the DRC.
