DANIDA allocates UGX 33.5 Billion to improving Informal Cross Border Trade and Standards.

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Our Reporter.

The Government of Denmark through her development arm – Danish International Development Agency (DANIDA) has confirmed that it will invest some USD 9 million ( about UGX 33.5 billion) in improving informal cross border trade and goods standards across Uganda.

The money which will be channeled through TradeMark Africa comes as a major boost for the thousands of Informal Traders plying their businesses at the different borders as it will ensure that their working environments are improved. Over 70 per cent of informal cross border traders in Uganda are women.

In addition, part of this money will go towards the improving of the standards of goods manufactured in Uganda.

Below is a full statement explaining this major development.

Background:

Cross border trade (CBT) is important in diversifying Uganda’s exports. Cross border trade enables the movement of produce across borders from surplus to deficit areas and is therefore significant not only in providing employment and livelihoods within border communities, but also in promoting food security.

Uganda’s cross border exports, from formal and informal trade, have grown from under $1billion in 2011 to over $1billion in 2016 and account for between 25% and 35% of total exports. The informal cross-border export earnings in the Financial Year 2017/18 were estimated at US$ 595.51 million, representing 17.08% of Uganda’s exports. The main informal commodities included beans, maize, sugar, other grains, bananas, fish, among others. DR Congo was the main informal partner of the country with total informal export trade amounting to US$ 291.48 million in 2017/18. It was followed by Kenya at US$ 149.94 million; Rwanda at US$19million.

Despite having a steadily improving trade environment, Uganda still faces some constraints in cross border trade. These include the lack of appropriate infrastructure; non-tariff barriers to trade and costly trading standards; gaps in transparent trade processes and systems; a sub-optimal regulatory environment; limited export capability; exclusion of women and small businesses; and uncoordinated support to CBT.

The interventions:

The Government of Uganda and Denmark on 1/12/2017 signed Government to Government Agreement on Denmark’s country program for Uganda 2018-2022. One of the thematic programmes is Uganda Program for Sustainable and Inclusive Development of the Economy(UPSIDE). Upside consists of three engagements: Northern Uganda Resilience Initiative (NURI); support to Agriculture Business Initiative(aBi) and; support to TradeMark East Africa (TMEA).

All these engagements of the UPSIDE component have been launched during this week at commenced on 13th May.

Today marks the official launch of the engagement with TMEA at Elegu Border Post on May 26th, 2019. The Government of Denmark is supporting Government of Uganda through TradeMark East Africa to a tune of DKK 60 million (approximately USD9million) over the four-year period from 2019 to 2022.

This engagement will support increased trade through removal of barriers and improvement of markets with focus on 1) Improved trading standards and reduced non-tariff barriers (NTB), 2) improved and more transparent trade processes and systems, and 3) improved trade regulatory environment.

Speaking at the event, the Head of Mission of the Danish Embassy, Majbrit Holm Jakobsen said “Denmark is passionate about promoting private sector development in Uganda. We appreciate Uganda’s efforts to improve the business environment, but more needs to be done, that is why Danida is glad to further partner with TradeMark East Africa in increasing trade in the region by creating the necessary conditions for the private sector especially the informal traders who constitute the majority of cross border trade in Uganda. Informal trade directly impacts on the livelihood of the bottom of pyramid which is a key element of Denmark’s engagement in development aid.”

Addressing the event, Honorable Amelia Kyambadde, Minister of Trade, Industry and Cooperatives said, “We thank the Danish Government for supporting trade facilitation in Uganda including the Uganda National Electronic Single Window and support to cross border trade. This support comes at the right time as my Ministry developed a National Export Development Strategy that seeks to increase the value of Uganda’s exports of the specified products and services to the targeted markets over the next five years.

Doris Akol, Commissioner General of Uganda Revenue Authority “We appreciate the support from the Government of Denmark through TradeMark East Africa to enhance ICT trade systems. This support will improve the trade environment, increase efficiency, transparency and predictability of trade processes – through the implementation of the Electronic Single Window.”

Richard Kamajugo, the TMEA Chief Operations Officer noted “We appreciate the continued partnership with the Danida in its support to the Government of Uganda through TradeMark East Africa. Danida has already funded the implementation of the Uganda Electronic Single Window which has had a real impact on the economy, it is therefore a great pleasure to see that more funding has now been committed focusing on cross border trade and standards”. 

Moses Sabiiti, TMEA Uganda Country Director, “In Strategy 2, TMEA seeks to deepen engagement with borderland communities with the key aim of thinning borders so as to increase access to Markets. TMEA will take a two pronged approach- build upon ongoing infrastructure work such as the One Stop Border Posts (e.g. Busia, Elegu, Mutukula) to address key trading challenges faced by both formal and informal cross border traders. This will not only cement Uganda’s position as a regional logistics hub for both informal and formal trade, but will also further consolidate gains in increasing ease of doing business in Uganda.”

The support from DANIDA builds on a number of interventions implemented by Government of Uganda through TradeMark East Africa including:

  • Construction and operationalisation of the 4 One Stop Border Posts at Busia OSBP, Mutukula OSBP, Mirama Hills OSBP and Elegu OSBP;
  • Upgrading customs management systems to improve the trade environment;
  • Implementation of the Uganda National Single Window.
  • Improving standards and elimination of NTBs;
  • Government of Uganda through Ministry of Trade, Industry and Cooperatives and TradeMark East Africa launched the Uganda Cross Border Strategy in 2017 that seeks to create simple procedures for small cross border traders and avail key trade information to this segment of traders;
  • Ministry of Trade, Industry and Cooperatives signed off the Cross-Border Trade at Mirama Hills One Stop Border Post and Mutukula One Stop Border Post. The Charter basically highlights the rights and obligations of border official and its users, including informal traders.

These interventions will contribute to increased trade through removal of barriers and improvement of markets.

 

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