Jun 26, 2022

Mawazo Writing Africa

Writing about the main

Uganda, Rwanda trade drops sharply despite open border

Rwanda’s full reopening of its border with Uganda has not yet yielded the positive expected results of a greater flow of goods, even as there remain unresolved issues between the two sides.

And now both countries could face uncertainties regarding the alternative market they hoped to conquer in the east of the Democratic Republic of the Congo are filing in the smoke of violence blamed on external actors.

Read:How the EAC Force could change conflict dynamics in Congo

It had been hoped that bilateral trade between Uganda and Rwanda would improve in 2022 following the reopening of their shared land border and the easing of Covid-19 restrictions.

However, the latest export data from the Uganda Ministry of Finance shows a sharp decline in the value of exports from Kampala in the three months to March 2022.

The data shows that U Ganda’s exports to Rwanda averaged US$826.2 million (US$220,000) monthly, down sharply from the monthly average of US$62.6 billion (US$16.6 million). 2019.

According to the Ministry of Finance, Uganda recorded trade surpluses with South Sudan and Burundi, while deficits were recorded with Tanzania, Kenya and Rwanda.

The data further shows that South Sudan has the highest trade surpluses of US$63.19 million in light of Uganda’s largest absorption of exports, mainly food products.

Exclusion from talks

Uganda exporters blame their exclusion from intergovernmental trade for the situation Talks.

Muzamil Mabirah, a political analyst at the Uganda Manufacturers Association (UMA), says whenever they’re looking for answers, government officials tell them to wait a little longer while they work out the remaining differences Ironing out Rwanda.

“Members have not exported to Rwanda since the border opened in January,” Mr. Mabirah said.

“It’s just people going, not goods. “

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In a desperate move, he says, Ugandan manufacturers have sought intervention from the East African Business Council as well as the World Trade Organisation, but their efforts have yielded no results.

“We are seeing the impact of this trade pause clearly done, but nothing worked,” said Mr. Mabirah.

The Rwandan government agreed to reopen the border based on a renewed commitment to address previously raised political issues.

MoU- Conditions

One of the pledges by both governments was not to support rebel opposition in either country, as covered in the memorandum of understanding signed between the two states in 2020.

Mr Mabirah noted that the factors that derailed relations between Rwanda and Uganda were never trade-related but political.

“These issues are beyond our understanding. We are not participating in the negotiations to resolve the issues related to the border closure,” he said.

The Private Sector Foundation Uganda (PSFU), a leading business lobby, also expressed uncertainties about doing business with Rwanda. Chief Executive Stephen Asimwe said members were concerned the standoff was protracted.

In Rwanda, Prime Minister Edouard Ngirente told a press conference in Kigali that his government was reviewing the list of goods to be traded and that the The case is expected to be approved on the market soon, subject to quality reviews.

The review was, according to Dr. Ngirente necessary because Rwanda wants to enforce quality and protect local manufacturers who started producing some of the goods previously imported from Uganda of the Rwandan market.”

“What I can possibly say is that trade between the two countries will resume very soon,” said Dr. Ngirente.

Read:Rwanda to review restrictions on Ugandan imports

Also read: Uganda manufacturers are pushing for return the Rwandan market

While the trade dispute is taking longer to resolve, both countries are affected, plus Tanzania and Kenya had explored the 95-million-strong market in DR Congo. However, it is unknown for now how the recent violence in eastern DRC will affect trade offers.

Kinshasa last week accused Kigali of supporting rebel groups in DRC, a charge Rwanda denied. Despite this, the DRC parliament has suspended a ratification debate on the trade deals originally concluded with Rwanda, the second largest exporter to DRC after Rwanda. In January, trade between Uganda and the Democratic Republic of the Congo hit an all-time high as new markets opened up.

According to Bank of Uganda data for January 2022, Kampala’s exports to the Democratic Republic of the Congo that month totaled $74.3 million, up from $29.9 million in December 2021, a 44 percent growth.

A recent economic summit held by Uganda’s Private Sector Foundation should improve Uganda’s status, and the foundation’s CEO, Stephen Asiimwe, had already said that 500 deals were closed during their visit to Kinshasa and Goma. It came after Kenya held a similar mission to Goma in April, heavily sponsored by some bodies looking to expand into the DRC.

Earlier this year, Kampala began building the Mpondwe road /Kasindi-Beni started. The Bunagana Rutshuru Goma Road and the Beni Butembo Road.

And before the current Tiff, Kigali had also established cross-border markets on Lake Kivu and also built four harbors on the western shores of Lake Kivu , to facilitate its export trade and the transportation of goods delivered from the ports of Mombasa and Dar es Salaam. The 22 billion RWF (US$21 million) project, planned in the four districts of Rubavu, Rusizi, Karongi and Rutsiro in the western province, should be completed by 2022.

On Thursday was unclear if Kigali would still go ahead with these projects, but according to Kigali, contractors were already at the proposed port sites.