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Rwanda-Uganda feud: Ugandan traders turn to other markets

President Museveni President Kagame

Impact on Uganda’s economy

Enock Twinoburyo, a senior economist at the Sustainable Development Goals Center for Africa in Kigali told The Independent that the continued conflict could shed-off Uganda’s projected GDP growth in the range of 1-2 percentage points.

Uganda’s economy is projected to grow at 6.3% in the current financial year 2018/19 and also in the next financial year 2019/2020, following a recovery from the slump during financial year 2016/17, according to the International Monetary Fund.

Data from the Bank of Uganda shows that Uganda’s earnings from Rwanda ranges between US$16-18 million per month. Uganda exports mainly food stuffs and construction materials including cement, iron and steel, salt, beverages, spirits, vinegar, soaps, and fuels among others.

On the other hand, Uganda spends on average of US$1-3million per month on importing ceramic products, edible vegetables and raw hides and skins –from its neighbour to the Southwest.

Uganda’s exports into the EAC over the last four years shows a decline in exports to Rwanda from US$253million in 2014/15– the highest ever recorded over the last eight years – to US$198million in 2017/18.

Uganda’s exports to the neighboring countries from 2010-2018 in million US dollars 

  2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
Rwanda 175 208 217 224 253 206 188 198
Kenya 214 226 268 348 374 414 475 678
South Sudan 00 1.92 80 236 309 225 281 311
Tanzania 38 45 54 50 56 61 71 46
DR Congo 175 210 255 231 160 159 190 196

Source: Bank of Uganda

Uganda’s imports from neighboring countries from 2010-2018 in million US dollars

  2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
Rwanda 6.1 8.9 7.4 12 9.5 12 10.6 20.6
Kenya 535 680 591 602 608 600 520 513
South Sudan 00 00 00 00 0.76 4.82 7.6 14.7
Tanzania 32.4 54.8 47.4 55.1 55.1 78.2 170 204
DR Congo 6.7 25.5 30 24.8 31.5 22.7 149.4 168

Source: Bank of Uganda

On the other hand, the value of Uganda’s imports from Rwanda remains minimal. In 2014/15, Uganda’s imports from Rwanda increased from merely US$9.5million to US$20.6million in 2017/18.

Meanwhile, the value of Uganda’s exports to South Sudan and DR Congo increased from US$309million to US$311million and US$160million to US$196million, respectively, during the period under review. However, exports to Tanzania fell from US$56million in 2014/15 to US$46million 2017/18/.

However, the value of Uganda’s imports from Tanzania and DRC also increased from US$55.1million and US$31.5million to US$204million and US$168million, respectively, during the same period under review.

Kenya remains the largest market for Ugandan products with the value of exports increasing from US$348million to US$678million during the same period under review. Interestingly, Uganda’s imports from Kenya fell from US$608million to US$513million during the same period under review.

Twinoburyo said the Uganda-Rwanda trade linkages are far beyond simply the trade balance or least the trade channel.

“There are other several mechanisms in which either economy that is trade, financial flows in form of FDI and remittances – all of which have implications for the financial sector,” he said.

Regional observers say the solution to the current impasse lies in the hands of two leaders – Uganda’s President Museveni and Rwanda’s Paul Kagame.

“They should sit together and understand the situation, the challenges that the business people are going through because these are two countries that have for a long a time worked together” Badagawa told The Independent.

“If countries within the EAC integration don’t work together, there is no way you can sustain the market,” he said.

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8 comments

  1. Bulanga Bukenke Mukendi

    This is a poorly written article full errors and misinformation. Easy to consider this fake news. The article has no statistics, does not provide any source from some of the allegations. Basically, this is a one sided piece of information, it is biased and can easily be considered NRM propaganda. Where is your so-called independence? Do you even have proof readers? Refrain from posting such fake news!!!! It doesn’t help in the already deteriorating relations between Rwanda and Uganda, you’re just adding salt to injury. Do you even care???

  2. Not only is it shabby, shoddy writing, it’s also kind insulting the intelligence of readers…. So you would want us to believe that Uganda’ exports to Rwanda (3rd main importer of consumer Uganda exports) Can be switched with a flick of fingers!! Time to eat humble pie!

  3. It is important for posterity and the general gullible public that blame(like credit) be placed squarely where it belongs. Museveni is the cause of all this because:
    1. He wanted to control Rwanda allegedly because he helped liberate; as though all Rwandese were brought up in Uganda which isn’t so.
    2. When he failed, he tried his monkey tricks of undermining Rwanda regime by accomodating all and every opposer of Rwanda so as to create a thorn in the backyard.
    3. When their propaganda failed, he opted to introduce clandestine assistance to shooters who engage Rwanda militarily.
    4. When this miscarried he sent an expeditionary force into Nyungwe forest which was wiped out.
    5. Rwanda started the clandestine offensive to wake him up so he could stop that mischief by half-closing borders a a gesture to show him how they could hurt him too.
    6. Because he is insensitive to the plight of his people he did not relent but chose to satanically(relentless pursuit of evil even when it is counterproductive) deny it rain or shine…
    7. Then Ugandan businesses started dying slowly.
    8. So the ball is in Ugandans’ court. No country on earth does business with enemy (apparent or clandestine)
    9. But it is upon Ugandans to prove(practically) that Museveni is not Uganda but he is just a watchman over the country though they swear he steals most of what he guards…… and fire him.
    10. Thereafter, good and cordial natural relations will resume and everyone will be happy (except a certain white-man country which is instigating all this).

  4. Saddened Ugandan

    I think most Ugandans have completely lost interest in this random inconsequential drama. Close borders, open them, whatever… life goes on, most of us haven’t even noticed any difference and probably won’t. We are just tired of inflammatory rhetoric and conjectural allegations. It’s really sad and unfortunate especially considering the mutual greatness that could be realised from better relations and the millions who would benefit, but the world won’t end just because Rwanda has closed its borders. We have our own priorities to address and really couldn’t be bothered by Rwanda’s rotating transient issues with each of its neighbours in which Rwanda never seems willing to take any responsibility, yet the common denominator in each “misunderstanding” remains the same. Always quarrelling for nothing while pointing fingers north, east, south, west… we are tired. May Rwanda fix its things and leave us alone. Next story please.

    • Haha! Brilliantly put!

      and all the rwandese ‘bots’ busy doing hatchet jobs online can now say amen!

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