The European Union (EU) has agreed to provide Shs150 billion (EUR 35 million) to support Ugandan small and medium agri-businesses in the coffee and cocoa sector under the EU-EAC Market Access Upgrade Programme (MARKUP).
MARKUP aims to assist small and medium-size enterprises across the region to improve access to the EU market and increase interregional trade.
The programme is meant to address supply side constraints and help increase exports, especially to the EU. Interventions will target selected value chains and cover quality assurance and certification, value addition, trade facilitation and business promotion. In Uganda the focus is on coffee and cocoa vale chains in line with the current National Export Development Strategy.
According to EU data, in 2017 coffee exports from Uganda to the EU market increased to over Shs 1.3 trillion (EUR 312 million) and have more than doubled in 10 years. Cocoa exports from Uganda to EU countries peaked Shs153 billion (EUR 36 million) in 2015. The cocoa sector presents strong potential for further development.
Coffee and cocoa are predominantly grown as smallholder cash crops, providing income for thousands of households in Uganda. There is increased demand in specialty coffees from the region and, overall, long term global coffee demand is expected to outstrip global supply. The demand of cocoa is also constantly on the rise, as the EU accounts for over 60 percent of the world’s cocoa bean imports and more than 40 percent of the cocoa powder and butter import.
Currently any Ugandan product except for arms and ammunition can access the EU market duty-free, quota-free under the EU’s “Everything but Arms” preferential regime offered to all Least Developed Countries. In the long term Uganda can secure free access to the EU market under the EU-EAC Economic Partnership Agreement concluded in 2016 and waiting to be signed and ratified by all EAC countries.
“MARKUP supports Uganda’s and East African Community’s regional integration agenda. It aims to improve the competitiveness of SMEs based in EAC countries and assist them in increasing productivity, adding value and benefiting from preferential market access opportunities– said Attilio Pacifici, Head of the EU Delegation in Uganda. He added: “With growing demand in the EU for coffee and cocoa products, MARKUP will help create stronger market linkages between Europe and the EAC, and further contribute to job creation and sustainable investments in Uganda and the region.”