Expensive certification blocks cocoa exporters

Michael Zagenda (R) in a cocoa garden. Expensive certification of mostly the organic type has rendered most cocoa exporters uncompetitive despite the availability of the market. PHOTO BY NAKATO TAUSI 

In Summary

• To acquire an organic certification to export to European Union, one requires about $20,000 (Shs74 million), Dorothy Nakaweesi writes.

By Dorothy Nakaweesi

Many Uganda’s exporters are struggling to enter the European Union market because of the costly certification,
Because of this, many exporters have been failed to take advantage of these stringent market destinations thus calling for government’s intervention with subsidies.

Speaking during the third annual exporters’ conference Mr Edrisa Sserunkuuma, the business development director Native Group of Companies (U) Ltd, said: “Expensive certification mostly the organic type has rendered many of us uncompetitive even when the market is available.”

To acquire an organic certification to export to European Union, one requires about $20,000 (Shs74 million).
Sharing their experience with Prosper Magazine, Mr Sserunkuuma who has been in this business for the last seven years, now exports indirectly through a British company because of the costs.

When you go through an agent, you miss out on the premium price and you can only get this if your company has organic and fair trade certifications.
Mr Sserunkuuma who exports a total of 250 metric tonnes of cocoa beans annually, says this volume depends on several fundamentals such as seasons and the exchange rate among others.
Uganda National Bureau of Standards (UNBS) was accredited by the International Organisation for Standardisation (ISO) to do some tests in their laboratories but certification still remains to the EU accredited companies.

Response
Responding to this plea, the Commissioner for External Trade, Mr Silver Ojakol, did not have good news for the exporters, explaining that certification is costly because it comes from outside the country.

“Internally, Uganda does not have the capacity to handle this type of certification. Until we reach that capacity, they will continue to incur the costly services,” Mr Ojakol said.
He, however, urged the exporters to work together with the government agencies such as Uganda National Bureau of Standards (UNBS) to find funding to develop the country’s capacity to undertake certification locally.

Trade Minister Amelia Kyambadde in response to this matter said: “As we wait for this issue to be sorted, you should also consider adding value to the commodity because there are investors who would like to partner with them to add value.”
Ms Kyambadde further said government is coming up with the export development fund which the trade ministry will lobby for finances to sort such challenges.

She further advised the exporters to make use of the credit finance initiative through Uganda Development Corporation which is a Public Private Partnership and Uganda Development Bank to address the challenge of credit finance.
“UDB has been capitalised to support the private sector. Through the UDC which is a capital intensive facility, they can partner with government to grow their businesses,” she said.

Export earnings
Bank of Uganda’s records for 2018 show that the country exported cocoa worth $64 million (Shs236b), up from $54million (Shs199b) earned in 2017.
In Uganda, few farmers grow cocoa as most people think the crop is not economically viable. Uganda has an estimated 20,000 hectares of land under cocoa cultivation, mostly in the country’s west and central regions and the crop supports about 60,000 households.