The mandate of the Department of Trade is "to develop, promote and facilitate both internal and external trade with particular emphasis on export promotion and diversification".

The major policy objectives for the Trade Sector are:

1. improving the provision of trade facilitating infrastructure with the aim of enhancing the country's capacity to benefit from the preferential market access opportunities currently available under; AGOA, EBA, EU/ACP, Japan, Canada, Australia, and Morocco for selected African countries as well as what is offered by Russia and China.
2. improving the capacity for trade negotiations on market access, including pre-negotiation preparations and analysis of post-negotiation implications and implementation.
3. coordinating the implementation of multilateral trade agreements under the WTO.
4. facilitating the Private Sector to take advantage of the opportunities that exist in bilateral and regional trade arrangements.
5. enhancing private sector capacity to penetrate the soft markets in Middle East and North Africa.
6. actively and effectively participate in the current WTO and ACP-EU EPA trade negotiations.
7. facilitating the integration of domestic and international trade with a view to fostering the exploitation of linkages that exist between the domestic and external trade sectors.

In order to achieve the above objectives, the Ministry is currently engaged in a policy review exercise with assistance from the EU under the UPTOP Project. The project is to introduce two major remedial measures for trade development, namely;

1. review and consolidate a national trade policy that will enhance the country's capacity in trade negotiations at multilateral, regional and bilateral levels as well as development of domestic trade.
2. develop physical, institutional and technical capacity for trade policy preparations, analysis and implementation.

1. to initiate and formulate policies and legislation on trade.
2. to collaborate with other Ministries, government institutions, embassies, the private sector and civil society in the design and implementation of activities designed to promote Trade.
3. to collect, collate, and provide information for sector investment opportunities.
4. to provide assistance in training the business community for improved performance and service delivery.
5. to participate in negotiations and conclusion of bilateral, regional and multilateral agreements/treaties.
6. analyse trade data and design policy interventions that promote trade.

Overall trade performance has been mixed over the past five calendar years. The export sector has risen significantly since 2001 recovering from the record low of approximately 401 million US dollars recorded in 2000 (caused by the collapse of world coffee prices). By 2003 export earnings amounted to 522.5 million US dollars compared to 467.6 million US dollars realized in 2002 representing growth of over 11 %. However, growth in exports over recent years has been superseded by growth in import levels, 2003 saw this bill rise to US dollars 1,375,106, an increase of 28% over the previous year. Uganda has thus made insufficient progress in eliminating its structural trade deficit, which amounted to US dollars 852,568 in 2003 Table 4.1 and Figures 4.1 and 4.2 below illustrate trade performance (1998-2003).

Table 1.1 Uganda's Trade Balance, 1998-2003 (US$'000) Year/Category 1998 1999 2000 2001 2002 2003 Exports NTEs) 182,877 137,286 190,302 278,552 284,905 321141 Exports (TEs) 353,870 341,464 211,343 173,213 182,700 201,397 Total Exports 536,747 478,750 401,645 451,765 467,605 522,538 Imports 1,093,329 994,202 958,463 1,006,557 1,073,733 1,375,106 Trade Balance -556,582 -515,452 -556,818 -554,792 -606,128 -852,568 Source: Uganda Bureau of Statistics

Agricultural products continue to dominate National exports, with Coffee remaining a leading earner of export revenue however its overall share has fallen dramatically from 60% in 1999 to 19% in 2003. The declining share of the coffee sub-sector in Uganda's export earnings, reflects the decline in world coffee prices, however through interventions such as the SEP, the Sector has sought to alleviate the effect of low prices by targeting the export of organic coffee to niche markets allowing exporters to add-value to their coffee produce.

The decline in coffee's share of export earnings also highlights the progress that has been made in efforts to diversify Uganda's export portfolio. Non-traditional exports (NTE) have, for the third year running, superseded traditional exports and the trend is expected to continue, with growth in the fish and horticulture sub-sectors expected to be particularly strong. Manufactured products such as soap, beer and plastics are also slowly increasing their share, especially in the regional markets of EAC and COMESA. For example soap exports in the region increased from US$334,000 in 2002 to US$554,000 in 2003 a percentage growth of over 30%. Figure 4.2 below, illustrates the percentage contribution of the traditional and non-traditional sectors to total exports since 1998.

The achievements of the trade sector include the following:

1. Uganda realised export earnings of US$ 522 million, in 2003 compared to US$ 467 realised in 2002. This is an increase of 11.7% over the past year. Growth in the non-traditional sector in particular has contributed to this strong growth, representing 61% of total export earnings in 2003 compared to 47% in the year 2000.
2. a draft comprehensive trade policy has been developed, through the Uganda Program on Trade Opportunities and Policy Project (UPTOP). Gaps are being identified so as to complete the policy document.
3. Cabinet has passed a Cabinet memo on the principles of the implementation of WTO implementation Bill. Legal Experts are drafting the WTO implementation Bill for presentation to Parliament. This Bill is expected to formally establish the IITC (Inter-Institutional Trade Committee).
4. design of the national export strategy commenced. The national export strategy is intended to diversify Uganda's export base in order to increase export earnings from non-traditional products, particularly focusing on the fish and horticultural sectors.
5. negotiations and consultation meetings have been held to deepen trade liberalisation within the multilateral framework under the current Doha Work Program;
6. At regional level
• A customs union protocol has been signed under EAC trade negotiations.
• ACP/EU Negotiations for a new Economic Partnership Agreement (EPA) have commenced and are to be concluded by the end of 2007, with a view to signing a new agreement to come into force by 2008.
• Implemented the COMESA programmes and hosted a successful 9th COMESA Summit which for the first time included the Business Summit and the 1st Ladies Summit.
7. At bilateral level:
• Trade initiatives with Canada, South Africa, Egypt, North Korea, China and France are being negotiated; with a view to getting more market access for Uganda exports.
• Delegations from Norway, South Africa, Belgium, Saudi Arabia, Iran and USA visited Uganda in the FY 2003/04. Joint Commission Meetings with Cuba, India, Kenya, Rwanda and Iran took place. All these activities are aimed at enhancing efforts to promote market access for Uganda exports

 

1. capacity in regional and multinational trading systems is being enhanced through training abroad and within the region. Five officials participated in the Trade Negotiation Course, which took place in Arusha, Tanzania; one official is currently attending a Masters Program on International Trade in Australia, while one official completed the WTO Trade Policy Course and another one is attending until 2nd July 2004.
2. five commercial laws are under review. These include; The Competition Law, Trade Licensing Law, Anti dumping Law, Sale of Goods Act and the Consumer Protection Law. Cabinet Memos have been submitted. Major stake holders have made their input in the draft laws.
3. Mainstreaming of trade issues into the Poverty Eradication Action Plan.
4. designed the Marketing and Agro-Processing Strategy (MAPS) and facilitated the implementation of interventions under the Strategic Exports Programme (SEP) both of which are key to the implementation of the Plan for Modernisation of Agriculture (PMA).
5. Reference/Resource Centre on trade matters has been refurbished to enable public access trade information.
6. collaborated with the EPRC to set up a Trade and Industrial Policy Research Unit to help inform the policy formulation process.

 

Linkages/Partnerships with Key Stakeholders

The department works closely with various Ministries and Statutory Institutions, including, (URA,NDA,NEMA), private sector institutions (PSFU, UNCCI, UMA, KACITA), the donor community (e.g. EU, DFID, USAID, UNDP, WB), civil society (e.g. Action Aid, SEATINI, DENIVA, ACODE), research and academic institutions (e.g. EPRC, MUIE, MUBS) and a number of multilateral trade agencies (e.g. WTO, UNCTAD, ITC, ISO, WIPO, Commonwealth Secretariat, CBI, CFC, ACP-EU, OIC, COMESA, ECA).

Constraints

Despite the achievements, the department continues to encounter institutional and operational constraints. Some of the constraints include:

1. Inadequate institutional capacity in terms of staff numbers and required skills.
2. Coordination of trade policy is fragmented among the Ministries of Tourism, Trade and Industry, Finance, Planning and Economic Development, and Foreign Affairs, yet the trade policy mandate is vested in the Ministry of Tourism, Trade and Industry.
3. Inadequate regulatory framework, partly caused by the long process of enacting the necessary laws.
4. inadequate funding of trade development programs and priorities
5. Inadequate support to trade policy research.
6. Lack of coordination on trade policy implementation with local authorities.

 

Strategic Policy Issues and Way Forward

1. Value added to exports
2. Progress on this includes working with Commercial Attaches to seek joint investment activities in export to enable the transfer of appropriate technology and the required resources in collaboration with UIRI.
3. Critical action on supply side constraints to meet market demand and standards: Proposals and concept papers have been developed on export production villages (EPVS)
4. Deepening market research with a focus on facilitating the Private Sector to exploit opportunities in 'soft markets' and increase the dissemination of market information. The presence of markets should be a critical guiding factor in production for export. In this regard, the goat meat export initiative for the Mid-East Market is an intervention that has been designed to kick-start diversification of exports to soft markets.
5. Deepening export skills development to enable exporters meet market place standards and other requirements. Establishment of a Uganda Export School is underway.
6. Developing a National Export Strategy that will act as a road map in tackling export problems across the entire value chain, the focus of which are the priorities identified through consultation with the productive stakeholders.
7. Complete the development of a Comprehensive Trade Policy.
8. Enhance participation in trade negotiations at regional and multilateral levels.
9. Harmonization of relationship among the various regional trade blocks where Uganda is a member.
10. Formulation and review of Commercial Laws to be in harmony with the current trading regimes.
11. The uncertainty of the merger of UEPB,UTB and UIA, which has continued to affect, not only the tempo of internal activities, but also the commitment of support from international development partners.
12. Lack of funding for export development activities. The 0.5% commission on imports to fund export development programs has never been ceded to the UEPB.
13. Addressing the issues of Sanitary and Phyto-Sanitary (SPS) and standards, where capacity is limited.
14. Ratification of bilateral, regional and multilateral trade agreements.
15. Developing services export strategy (e.g. in health, education etc).
16. Strengthening the link between MTTI headquarters and Local Governments, through strengthening District Commercial Officers.
17. Increasing both staff numbers and the skills-set of existing staff.