Trade facilitation projects induce an additional US$50million trade for Uganda

Kampala: Trade Facilitation Projects implemented in Uganda by TradeMark Africa, will induce about US$ 50 million in attributable new trade for the country for 2015/16. Further, TMA attributable time savings have thus far resulted in a 5.7% reduction in transport time between Kampala and ports since inception. This resultantly reduced trade costs and improved a consistent supply of goods like fuel. The results have emerged from independent evaluation of 10 TMA projects in Uganda. East Africa’s renowned businessperson and TMA board chair Ali Mufuruki made the announcement during an event at Sheraton Hotel, Kampala on Tuesday 31st May. TMA CEO Frank Matsaert and TMA Uganda Country Director Allen Asiimwe joined Mr. Mufuruki in announcing the results.

TMA launched its Uganda Country Programme (UCP) in 2011 with an approximate budget of USD 100 Million.

Independent evaluators conducted the evaluation in 2015 for a period of six months. They analysed projects in Customs modernisation, which includes support to Uganda Revenue Authority’s (URA) ASYCUDA, Electronic Cargo Tracking System and Authorised Economic Operators. Other projects include infrastructure development, Support to Ministry of East Africa and Uganda National Bureau of Standards, support to elimination of Non Tarrif barrier projects.

The customs management system, ASYCUDA world has reduced the processing time for imports by 30%. This is 72 hours of time-savings as previously it took 120 hours on clearing imports and exports. Through the Single Customs Territory, URA/KRA integration has increased the pre-clearance and reduced delays at the port for essential goods like fuel. Standards compliance, implemented by UNBS has reduced testing cost and testing time by 71 per cent (from US$350 to US$100) and 58 per cent (from 19 days to 8 days) respectively.

Electronic Cargo Tracking system (ECT’s) has continued to deliver an average of 144 hours in time-savings for cargo bound to Uganda. URA uses ECTs to track about 15,000 transit shipment per year. ECT’s has led to complete elimination of physical escorts, improved the security of goods in transit and improved staff performance. This has reduced transit time from 8 days to 2 days leading to cost savings of US$400-600 per truck per day amounting to savings of over USD500,000.

TMA CEO Frank Matseart remarked, “The overall, return on investment for projects with long-term outcomes to-date is 14%. An analysis of the additive trade impact of those few projects that are already returning benefits suggests that TMA interventions are beginning to induce new trade in Uganda, which is likely to grow.  As physical infrastructure projects like Mirama Hills Road and One Stop Border Posts like Busia, Malaba and Elegu come on line and begin to deliver added time savings, we believe the trade impacts will grow significantly.”

Harmonised Standards and eliminated Non Tarrif Barriers

TMA supported UNBS to harmonise standards by supporting a capacity-building programme, awareness creation programmes and support in upgrading its laboratory through purchase of modern testing equipment. The results of awareness creation is a knowledgeable business community in Uganda, evidenced by the increased number of enquiries on the subject from a mere 2449 in 2011 (before project implementation) to 11,096 in 2014. Additionally, UNBS has certified 90 new products and it attributes this to the awareness created. AS a result of the interventions, UNBS reduced testing cost and testing time by 71 per cent (from US$350 to US$100) and 58 per cent (from 19 days to 8 days) respectively.

Elimination of Non Tarrif Barriers programme continues to record success. Elimination of key NTB’s have reduced the time taken to export from Uganda from nearly 35 days in 2010 to under 30 days in 2015. NTBs present a serious challenge to trade with an EAC wide cost estimate of NTBs (2010) being approximately US$490 million.

TMA Country Director, Allen Asiimwe thanked the government and private sector partners who collaborated in implementation of the projects. Giving her remarks, she noted that, “Ugandan’s will reap the gains of these projects for a long time. For example, the fuel industry will testify experiencing consistency in the supply of fuel because of Single Customs Territory and resulting linkages between KRA and URA that enable faster clearance. On the other hand, traders in staples now have sustainable livelihoods through access to regional markets because they know and have adopted the set regional standards for key staples. These projects are a starting point to ensuring that ultimately, East Africa is able to contribute significantly to global trade.

Allen further added, “TMA phase 1 will end in July 2017, after which the organisation will roll out phase 2. Working in partnership with key government ministries, the EAC and private sector, we envision our Phase 2 projects to deliver gains in reduced time and trade costs in Uganda. We will especially support work with women by supporting ICT solutions for improved access to information and other trade related services as well as capacity building. We will also develop ICT for Trade projects to ensure critical international trade processes are carried out on electronic platforms. Already, we have started implementing the Uganda Electronic Single window which is expected to further reduce clearance time and trade costs.”

TMA Phase 2 will invest in working with women while also focusing on Uganda’s key traffic routes. Specifically, this will involve development of a logistics hub at Gulu in northern Uganda. Not only is this the economic centre of a rapidly growing region, but Gulu is also a natural staging point for long-range trucks serving Mombasa Port and short-range trucks serving hinterland destinations in Uganda, South Sudan and DRC. The Gulu hub will complement with similar initiatives in neighbouring countries like Rwanda.

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TradeMark Africa (TMA) is an aid-for-trade organisation that was established with the aim of growing prosperity in East Africa through increased trade. TradeMark Africa (TMA) operates on a not-for-profit basis and is funded by the development agencies of the following countries: Belgium, Canada, Denmark, Finland, the Netherlands, UK, and USA. TradeMark Africa (TMA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.