The Government of Denmark through her development arm – Danish International Development Agency (DANIDA) is to invest some US $9 million (about Shs33.5 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 the money will go towards the improving of the standards of goods manufactured in Uganda.
The Head of Mission of the Danish Embassy, Majbrit Holm Jakobsen notes, “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.”
Richard Kamajugo, the TMEA Chief Operations Officer notes, “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 says, “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.”
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 US $1billion in 2011 to over $1billion in 2016 and account for between 25 per cent and 35 per cent 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 per cent 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
