UGANDA: REGIONAL EXPORTS ON THE RISE

UNCLAS KAMPALA 001084 TREASURY FOR DAN PETERS KHARTOUM PLEASE PASS TO JUBA E.O. 12958: N/A TAGS: ETRD ECIN ECON PREL EFIN UG SUBJECT: UGANDA: REGIONAL EXPORTS ON THE RISE REF: (A) 07 KAMPALA 1757 (B) KAMPALA 670 (C) KAMPALA 560 ¶1. SUMMARY: Ugandan exports increased by 40 percent to USD 1.34 billion in 2007 due to an improved regional trading environment and high commodity prices. Exports to the Democratic Republic of Congo (DRC) and southern Sudan rose to USD 100 million and USD 157 million, representing a 127 percent and 72 percent increase over 2006 export figures. Illegal raw material imports, such as timber and gold, from the DRC, which are re-exported as Ugandan goods, continued to contribute to Uganda's growing export figure (ref A). END SUMMARY. ¶2. Ugandan Export Promotion Board Executive Director Florence Kata stated that total Ugandan exports, including goods, services, and remittances, reached USD 2.64 billion in 2007. Some exported goods, such as coffee and fruits, rose in volume and even more in value, while fish and flowers were two exports that saw little to no gain. Since 2005, Uganda's exports have shifted from traditional markets in the European Union (EU) to the Common Market for Eastern and Southern Africa (COMESA) countries and other "southern" markets, including the Middle East, Kata explained. Exports to COMESA increased by 78 percent in 2007, and Kata stressed that the "south-south" trade was on the rise, as African, and Middle Eastern, demand grew. According to Kata, informal exports drive the figure considerably higher. She estimated that trade with DRC alone would grow by at least USD 300 million if informal exports could be captured. ¶3. The United Arab Emirates (UAE),the final stop for some of the high value items that originate in DRC, but are officially exported from Uganda, was the leading destination for Ugandan exports in value terms. With two flights a day from Uganda to UAE, Ugandan exports have a new "unlimited" market in the Middle East. Kata explained that the population is growing in the region, along with the purchasing power and need for goods. Ugandan gold sales in the EU declined after activists said that the Ugandan military plundered it from DRC mines, but the gold found a thriving market in the UAE. Also, Middle Eastern markets have fewer restrictions on food products, making it a more attractive market for Ugandan agricultural exports. ¶4. Exports to southern Sudan, which increased by 72 percent in 2007, include processed foods, beer, construction materials, and livestock such as chicken and cattle. According to Minister of State for Trade Nelson Gagawala, Uganda is the primary provider of goods to southern Sudan. The southern Sudanese market operates independently from Khartoum, and as it expands, so do opportunities for Ugandan-based businesses and goods (refs B and C). The Ugandan Export Promotion Board plans to open a trade center later this year in Juba, southern Sudan, to promote exportation of Uganda products, Kata said. She is working closely with her counterparts to streamline and structure trade flows to Juba, and to design corresponding trade regulations with southern Sudanese officials. ¶5. COMMENT: GOU officials and exporters complain about Uganda's land-locked status, but its central location and fertile land has benefited the country's regional exports. The potential for exports to southern Sudan and DRC, as well as other regional markets, has not reached its peak, and projections for 2008 export figures are continuing on a steep upward climb. END COMMENT. BROWNING