Does Uganda need an exports promotions body?

What is the status of Uganda’s exports?

The status of exports for the Financial Year 2016/17 was $3.16 billion. It is what we earned from the sector. Services, excluding tourism, fetched $2 billion. The combination of services and commodities had the country receiving over $5 billion. Tourism and other remittances always earn us above a billion US Dollar. Merchandise imports came down to $5.7 billion from $6 billion, while private sector imports reduced.

For the past five years, private sector imports have been averaging $4.5 billion but have declined to 3.9 billion, which is positive to the economy. Government imports for the big infrastructure projects like Karuma, Ayago and Isimba dams have kept our trade balance high but we hope that when these projects have ended, there will be reduced importation.

This means that the import bill will reduce, which will positively impact the trade balance. Merchandise exports and merchandise imports have a difference of $780 million, which is less than a billion dollars and this is very important.

How is Exports Week relevant and practical in solving the problems that exporters are facing, like a weak currency, lack of access to credit etc?

This campaign is so important because we are creating awareness. We want Ugandans to know that there is export, that exports matter. that we have to export. If there is no export, it means that the country will depend on foreign aid. The best way to get foreign currency is to earn it either through exporting commodities or through remittances. This will help us earn export receipts and remittances.

One of the major problems facing Uganda’s exporters is the cost of money, cost of loans, and cost of credit, which is very high sometimes going beyond 28%. Because banks lend on short term and if you’re to get their money on long term, it even becomes more expensive for you. It’s why Uganda Export Promotions Board has suggested the introduction of the Exports Development Fund, which will be development-oriented and able to lend long-term. It should fund activities for producing, processing, adding value, for manufacturing and exporting.

How can an interested Ugandan become an exporter? How do you help people to become exporters?

Anyone can become an exporter tomorrow. All you need to know is that we have exports markets and the regional market is becoming one of the biggest markets for manufacturing value added products, for services and for primary products. If one wants to start a business, they need to have some capital. One doesn’t necessarily have to come to Uganda Export Promotions Board. They can reach us on the different social media platforms or can search for our website Uganda Export Promotions Board where we can give you information, advise and connect you to foreign buyers. We do also take one’s details, advise you on how to enter the exports market because it’s a business where we want you to gain money and not lose money.

Why are Uganda’s exports still low and what are you doing to ensure that they increase?

Like I said, the exports/imports ratio is improving now. Exports are zero rated for taxes and the government liberalised the foreign exchange regime and it also liberalised trade. One doesn’t need an export licence which used to be common and was a trade obstacle. We were established to provide free information and customised advisory services and take Ugandan companies to different places, coordinate exports-related activities while linking exporters, manufacturers, different companies, producers to buyers.

We think that such all initiatives will increase exports. We need cheap money for exporters, continue doing a lot because most of Ugandan exporters are small, medium and others micro enterprises who need services for collecting market information. The government has also helped by providing producers with inputs such as coffee and cotton seedlings, fingerings of fish etc. For the first time in the financial year 2016/17, Uganda exported more than four million bags of coffee, which was a positive thing for us.

Uganda’s balance of trade is in a deficit where we import more than we export. As UEPB, what are you doing to mitigate this problem?

Most countries are in a trade deficit even if it’s America; South Korea had a deficit for 30 years. A deficit is not a problem. Sometimes you import because you’re building local capacity or importing raw materials. We import capital goods; the challenge is when we import consumer goods like fruits and vegetables, concentrates, detergents, drinks like beers which we are producing locally. I think we need to improve on them and they are checked.

The good thing is that we have a positive trade balance with the EAC. In fact, it’s only Kenya ahead of us with regards to exports in the region. Deficit is narrowing; at one time we were importing at 51% and exports 49% or less but when you compare the formal exports to merchandise imports, the deficit is $780 million.

Uganda’s exports have declined or stopped growing considerably over the last three years. It’s like Uganda is becoming a supermarket economy. How relevant is UEPB? Does Uganda still need an exports promotions body?

Since 2001, Uganda’s exports have been growing. They grew from very miserable numbers in millions to billions now but, imports have been also been increasing and now are above $6 billion and exports are in the range of $3.9 billion for merchandise exports. In my view, Uganda is not necessarily a supermarket economy because when you look at domestic consumption, more than 85% of what is produced here is consumed domestically. The biggest import bill is for vehicles which are not tractors that can be productive to the economy.

Almost all countries in the world have Export Promotions agencies apart from USA where states promote themselves. Exports matter to countries and most companies begin as SMEs that need government support. Even if one wants to carry out exporting without a government agency, they still need a seal of approval because this is how it has been done since time immemorial and it’s not about to go away even in these times of internet, Google, Twitter and WhatsApp.

UEPB is important because we collect, analyse and disseminate market information to SMEs. We coordinate the many export related activities for exporters, civil society, NGOs, transporters, farmer groups, cooperatives, logistics, value chains, producers and private companies who are all involved in the exportation business. We do overall marketing of Uganda.

Export agencies helps you make money, not lose money. Studies by World Bank and World Trade Centre show that when you invest in trade promotion, you generate revenue. The empirical studies by ITC, the World Bank, and other experts have found out that these agencies indeed contribute to the economy in terms of GDP and increased exports. Recently, ITC (2016) study – “Investing in Trade Promotion Generates Revenue