For some time now, the Uganda Shilling has been in free fall and the economy is hurting! The Minister of Finance and the Governor Bank of Uganda have expressed concern but no real solution seems to be in sight yet.

While reacting to the depreciating shilling recently, the Finance Minister, Matia Kasaijja, pointed out, and rightly so, that increased exports could rescue the shilling. He then called upon the business community to increase exports.

I quickly scanned the landscape of Uganda’s exports and the picture was not rosy! A few examples can suffice!

Uganda is still under a self- imposed ban for exports of hot pepper (capsicum) to the EU due to the false-codling moth found in Uganda’s exports!

The South Sudan market is still in disarray due to civil war!

The fish catches in Lake Victoria have dwindled to a minimum due to overfishing, badly effecting fish exports!

And that is not all!

What many people do not know, is that Uganda continues to lose out on the lucrative European beef market because, despite the enormous production potential, Uganda is still not able to export beef!!

With this kind of picture, I don’t expect Kasaijja to celebrate any time soon.

However, not all is lost. Despite the above bleak picture, the Ministry of Finance and Economic Planning can, with a few interventions, change the situation and turn Uganda into a leading exporter of beef. Beef exports to lucrative markets like the EU can go a long way in stabilizing the shilling and eradicating poverty in Uganda.

Let me explain how:

Let’s start by looking at a country like Botswana with a cattle population of only 2.8 million but which earns more than $120m on annually from beef exports. Compare this with Uganda, which has a cattle population of more than 12 million but earns almost nothing from beef exports! Another good example is Namibia with a total cattle population of 2.5 million but earns about $130m annually from beef exports to the EU alone!

Uganda’s beef export potential if exploited can easily reach and surpass $300m annually! So, what is it that Botswana and Namibia have that Uganda doesn’t have?

It is when I visited Botswana in July last year, that I discovered the main reason why Uganda is not able to export beef to lucrative markets such as the EU. The reason is that Uganda has not put in place and implemented a beef quality assurance system in form of a National Residue Control and Monitoring Plan for the beef industry that complies with the EU Sanitary and Phyto-sanitary (SPS) regulations as elaborated in the European Council Directive 96/23/EC. This residue plan requires laboratory testing of samples along the value chain to ensure that beef and other animal food products are free from contaminants such as unsafe levels of veterinary drug residues, pesticide residues and myco-toxins.

A national residue control plan provides a framework that ensures that:

• Animals that have just been treated with veterinary drugs are not slaughtered
• Animals are not treated with banned or unauthorized drugs such as stilbenes
• Animals with diseases such as the foot and mouth disease (FMD) do not enter the food chain and are controlled
• The beef to be exported is free of chemical contaminants and pathogenic micro-organisms

There is always fear that some animals are slaughtered when they have just been treated with veterinary drugs. Excessive veterinary drug residues in meat and meat products above set maximum residue levels (MRL) are harmful to human health and can result in cancer or drug resistance among others. For this reason, international standards and EU regulations demand laboratory testing for these residues along the beef value chain.

This is not to say that Uganda’s beef is contaminated. However, mere absence of the National Residue Control Plan to assure the consumers that the beef is safe means that Uganda’s beef cannot be allowed in export markets. Our local rudimentary meat inspection system of stamping the meat at slaughter houses by veterinary doctors may work for our local market but does not work for export markets!

Therefore, Uganda needs to quickly develop and implement a national residue control plan for beef, and improve on the Laboratory Testing infrastructure to support the plan.

Fortunately, this is not entirely new as we can learn lessons from the Fisheries sector, which currently has a National Residue Control Plan for fish products implemented by the Fisheries Directorate in the Ministry of Agriculture Animal Industry and Fisheries (MAAIF), Uganda National Bureau of Standards (UNBS) and a private laboratory in Kansanga called Chemiphar. This is the system that supports our fish exports and which eventually turned the once banned fish products into a success story.

When Uganda suffered a fish ban from the EU in the late 90s that caused a loss of more than US$400 million in foreign exchange earnings, the economy got a bad shock that got everybody concerned including the President. The ban was a result of the callous behavior of fishermen who were fishing using poison! The ban resulted into EU inspections of the fisheries sector which found that the landing sites were very filthy, the fish factories were very unhygienic, and there was no system to ensure that food safety standards were met. Among the recommendations of the EU inspectors was for Government to put in place and implement a residue control plan for fish. The EU agreed to offer technical assistance to help the fisheries sector comply with their requirements, including international accreditation of UNBS Microbiology laboratory to carry out the tests. When government seriously embarked on implementing the residue control plan, the fish ban was lifted.

Key to note here is that having suffered revenue losses due to the fish ban, the Government of Uganda willingly provided the necessary resources to UNBS and MAAIF and ensured that the EU requirements were fully complied with. The same commitment is required to support beef exports.

In addition to the residue control plan, Uganda needs to strengthen the disease control and quarantine system under MAAIF for animal diseases especially the Foot and Mouth Disease (FMD). With the above in place, the business community of exporters can negotiate and secure export markets in the lucrative markets of the EU, the Middle East, Japan and others.

Fortunately, we are not starting from zero! The laboratory capacity to test veterinary drug residues which has been lacking in Uganda is now being developed at UNBS.

Recently, the International Atomic Energy Agency (IAEA) under the project “Use of Nuclear Technology to Promote Food Safety”, trained UNBS laboratory scientists through attachment in Botswana National Veterinary Laboratories (two scientists) and in the national veterinary laboratory of Turkey (also two scientists). They also supported a scientific visit to Botswana to understudy the success of Botswana as a key African exporter of beef to the EU.

The IAEA and Trademark East Africa (TMA) have also provided modern laboratory equipment required to test for veterinary drug residues and chemical contaminants as well as pathogenic (disease-causing) microorganisms in beef and other animal food products. The IAEA provided two important equipment, namely the High Performance Liquid Chromatograph (HPLC) and the Charm II, which are important for pre-screening of veterinary drug residues, while TMA provided the Induction Coupled Plasma (ICP) to test for heavy metal contaminants and Microbiology equipment to boost testing for micro-organisms, among others.

What is lacking at UNBS is adequate physical laboratory space to fully accommodate the new testing activities. The current rented laboratory buildings have no space for expansion to install all the new equipment and allow handling of high volumes of samples expected from the beef sector. In addition, there is need for one advanced machine called the Liquid Chromatography-Tandem Mass Spectrometry (LC-MS/MS) which is required to complete the tests for veterinary drug residues by quantifying the test results to the accuracy required by the residue control plan. What is lacking at MAAIF is putting in place the residue control plan and establishing disease control centers.

With the above put in place in addition to a few more training attachments of laboratory scientists in advanced laboratories and training MAAIF veterinary officers in sampling along the beef value chain, the picture gets completed and UNBS can without doubt and in partnership with MAAIF provide sampling and testing services to support beef exports.

Fortunately, the UNBS labs are already internationally accredited by SANAS of South Africa and their test results are recognized internationally.

The above interventions for a modern UNBS laboratory building at their new site in Bweyogerere, the equipment and more training attachments, require about US$20 million. Another $20m is needed to put in place the residue control plan, support the initial sampling activities by MAAIF and the participating private sector and strengthening of the animal disease control system.

Therefore, government needs to inject about $40m as a stimulus package to start off beef exports. Once started, the process becomes self-sustaining through a fees system appropriately apportioned along the value chain.

This is where the Hon. Minister of Finance should come in and intervene financially by providing the above resources or negotiating a soft loan to finance the initiative.

If the Ministry of Finance can inject $40m and stimulate export earnings of about $300m annually in the next 2 to 3 years, then surely, it will be a worthy investment. The expected returns are actually close to the figure that the Governor Bank of Uganda said was required to stabilize the shilling in the medium term.

The above stimulus package will not be a venture into the wilderness but will support existing private sector initiatives. Already, there have been some initiatives by the private sector to develop abattoirs and embark on slaughtering cattle for beef exports.

For example in February last year 2014, President Yoweri Museveni presided over the ground breaking ceremony for a $300m, 18 square miles facility that will house a beef production zone and host a modern abattoir to slaughter about 400 cows daily and breed new varieties of livestock. This is an initiative by a Turkish company in Kaweweta in Nakaseke district. Also, a law on Export Processing Zones (SPZ) to create an enabling environment for such facilities has been put in place.

However, these efforts may not easily be realized if the residue control plan and the attendant laboratory infrastructure explained above are not put in place and implemented in time. The private sector players cannot do it alone and require active support from Government to help them comply with the export market requirements.

Let the Hon Minister of Finance take keen interest in this. You never know, it may be the necessary shot in the arm to rescue the faltering shilling.

Source: New Vision

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.