Rwanda-Uganda border. The closure of the Rwanda-Uganda border has been
cited as one of the challenges that the private sector has had to put up
with in 2019. FILE PHOTO
As the year
kicked off, there had been a lot of optimism pinned on the
implementation and amendment of laws, specifically to promote the Buy
Uganda Build Uganda (Bubu) policy.
Bubu seeks to help local manufacturers increase return on investment with government and related agencies taking the lead in purchase of goods manufactured by local producers.
There has been some progress in this regard but away from this, the private sector has listed the closure as the Uganda and Rwanda as one of its biggest challenge in 2019.
In February, Rwandan closed its border with Uganda, blocking some of the country’s exports to south western neighbour.
This has as a result triggered losses for some businesses and forced a decline in foreign exchange flow.
Bubu seeks to help local manufacturers increase return on investment with government and related agencies taking the lead in purchase of goods manufactured by local producers.
There has been some progress in this regard but away from this, the private sector has listed the closure as the Uganda and Rwanda as one of its biggest challenge in 2019.
In February, Rwandan closed its border with Uganda, blocking some of the country’s exports to south western neighbour.
This has as a result triggered losses for some businesses and forced a decline in foreign exchange flow.
Efforts
between the two countries targeted at opening the border have been
lukewarm to guarantee any hope and a breakdown of those efforts with the
most recent being this month, has been documented although both
countries leave the door open for dialogue.
However, stakes continue to be high and from the look of things, Uganda has lost much more in terms of trade inflows in the ongoing impasse.
According the Ministry of Trade, Uganda exported nearly $250m worth of goods and services to Rwanda in 2018 but this had fallen to below $20m in the third quarter of 2019, according to data from Bank of Uganda.
Indeed the Rwanda border closure remains the largest elephant in the room but what else does the private sector talk about 2019?
However, stakes continue to be high and from the look of things, Uganda has lost much more in terms of trade inflows in the ongoing impasse.
According the Ministry of Trade, Uganda exported nearly $250m worth of goods and services to Rwanda in 2018 but this had fallen to below $20m in the third quarter of 2019, according to data from Bank of Uganda.
Indeed the Rwanda border closure remains the largest elephant in the room but what else does the private sector talk about 2019?
How 2019 treated Freight, Clearing and Forwarding Industry
Hussein Kidede is the Uganda Freight Forwarders Association chairperson and he notes that as clearing agents and forwarders, the industry witnessed some remarkable triumphs such as hosting the second regional logistics expo.
Beyond this, the industry, he says, has enhanced members’ capacity and will likely benefit from hosting the 2021 International Federation of Freight Forwarders Associations meeting in Kampala.
However, the industry has not been without challenges. For instance, Kidede says, the industry remains largely unregulated and the closure of the Rwanda border continues to bleed their businesses and denting prospects.
He notes that the failure by URA to compel Kenya to synchronise its clearing and forwarding platforms, remains a challenge that needs agent attention.
Hussein Kidede is the Uganda Freight Forwarders Association chairperson and he notes that as clearing agents and forwarders, the industry witnessed some remarkable triumphs such as hosting the second regional logistics expo.
Beyond this, the industry, he says, has enhanced members’ capacity and will likely benefit from hosting the 2021 International Federation of Freight Forwarders Associations meeting in Kampala.
However, the industry has not been without challenges. For instance, Kidede says, the industry remains largely unregulated and the closure of the Rwanda border continues to bleed their businesses and denting prospects.
He notes that the failure by URA to compel Kenya to synchronise its clearing and forwarding platforms, remains a challenge that needs agent attention.
2019 in the eyes of Uganda Manufacturers Association
Daniel
Birungi, the Uganda Manufactures Association executive director, says
2019 has been fairly good and UMA particularly made 16 tax policy
proposals in both the domestic tax and customs tariff areas out of which
60 per cent of the proposals were granted by government.
“An increase of the tax on import has resulted into increased business opportunities for manufacturers specifically in the textile and furniture sectors, among others,” he says, noting that a reduction of power tariffs, specifically for large and extra-large industries has been good progress for the industry.
“An increase of the tax on import has resulted into increased business opportunities for manufacturers specifically in the textile and furniture sectors, among others,” he says, noting that a reduction of power tariffs, specifically for large and extra-large industries has been good progress for the industry.
He also lauds
government’s ban on importation of furniture by ministries, departments
and agencies, which he says, “shall see local producers of furniture
exclusively supply government”.
However, challenges such as increased failure of standards, access to markets, high cost of capital, poor tax administration, especially delayed VAT refunds and inadequate skills, have been and continue to be serious challenges.
However, challenges such as increased failure of standards, access to markets, high cost of capital, poor tax administration, especially delayed VAT refunds and inadequate skills, have been and continue to be serious challenges.
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