Uganda’s AGOA export suffered as a result of Covid pandemic

Uganda’s AGOA export suffered as a result of Covid pandemic
Published date:
Thursday, 14 April 2022
Author:
Precious Delilah

Uganda’s export earnings have dropped tremendously in the last two years as a result of the Covid-19 pandemic that hit the country, the African Growth and Opportunity Act (Agoa) officials have observed.  [ AGOA.info note: See US import data from Uganda by program below]

Uganda is one African country whose exports are eligible for tariff and quota-free access to the US market under the Agoa initiative.

Mr Benson Byaruhanga, the Agoa economist, told Monitor in an interview yesterday that the country’s export earnings dropped from Shs56.6b in 2019 to Shs46.1b in 2020 and to a further Shs40.5b last year due to Covid-19.

“The drastic drop in export from Shs112.1b in 2017/18 to Shs56.6b in the year 2018/2019 was due to many factors. The quality of products dropped and then also the cost of doing business wasn’t favourable and people pulled out of Agoa,” Mr Byaruhanga said.

He said the highest record of exports was registered in 2017/2018, where Uganda’s export earnings stood at Shs112.1b and this was attributed to the ready market in the US for Ugandan products. In 2015, Uganda exported products worth Shs91b to the US under Agoa.

“During the initial stages of the pandemic, we faced logistical issues because there was a scarcity of containers to transport our export to majorly the US, and other countries we export to,” Mr Byaruhanga said in a telephone interview.

He added: “Also we faced a challenge in exporting animal products because production of milk went down while the price went up and exporters couldn’t afford to buy the milk at such high prices.”

The other hindrance cited was a drop in the quality of products.

Mr Byaruhanga said  Ugandans are still battling post-Covid effects.

“Since the economy in the US hasn’t yet fully reopened, the market for these products has gone down and that’s one of the reasons we aren’t exporting so much currently but we hope to improve the situation as we are engaging the government to see a way forward,” Mr Byaruhanga said.

He also tasked farmers to take advantage of Agoa.

“Most of them like shortcuts and don’t believe in consistency, they aren’t patient. Once they try exporting through Agoa and don’t make the profit they expect, they leave and try other markets,”  the economist said.

Earlier, Mr Byaruhanga accompanied a team from Agoa for a tour to Jakana foods. The team was led by Ms Susan K Muhwezi, the senior presidential advisor on Agoa, who called upon farmers to take advantage of the export policy under Agoa.

Jakana Foods Limited is one of the companies exporting dried fruits under the Agoa initiative.

 “We make an appeal to most Ugandans who are into agriculture and farming to do value-addition, take the opportunity created by Agoa. Agoa meets most of the objectives as to why it was created, that is to create employment, bring dollars into the country,” Ms Muhwezi said.

UNBS boss explains 

According to the executive director of the Uganda National Bureau of Standards (UNBS), Mr David Livingstone Ebiru, the bureau is working towards ensuring the standards of products are uplifted.

“UNBS has reduced certification charges to promote acquisition of UNBS Quality Mark (Q-Mark). We continue to provide Training and Advisory Services to MSMEs, including providing free copies of standards to organized MSME groups and Associations. We have also translated some standards into local languages to ease their implementation by less educated entrepreneurs,” Mr Ebiru said.

He added: “The challenge, however, relates to the poor quality culture and attitude towards quality standards thinking it’s a costly process, yet it should be considered as part of the business Investment Capital and not an overhead as most perceive it. The future of the markets both locally and internationally will be driven by the quality of products and what values they offer to the consumers and not how cheap their prices are!”

Explaining why some companies are pulling out of Agoa, Mr Byaruhanga said the cost of doing business is currently high.

However, government intervention is underway where trucks for transportation shall be provided to farmers to transport their produce to the airport

 “In addition, there shall be negotiations with Uganda Airlines so people can have a fair cost of doing business,” he said.

Agoa provides duty-free access to the US market for more than 6,000 products from Uganda.

View related news articles

US overtakes Uganda to become the largest market for Kenyan goods

The United States has overtaken Uganda to become the largest market for Kenyan goods, according to a report by Business Daily. Citing official data, the publication reported that Kenya’s exports to the US grew by 47 percent to Sh38.8 billion in the first half of the year, ending Uganda’s 10-year dominance as the leading export destination for Kenya-made goods. In the period under review, Ugandan consumers bought Sh36.2 billion worth of...

22 September 2022

Counting Uganda’s gains and missed opportunities from AGOA

Going by the Ministry of Trade and AGOA country response office statistics, the last three financial years provide a solid case for the extension of the initiative falling under the US Trade Act (legislation) and at the same time give a proper assessment of what is in store for this programme if efforts to get it right are not only consolidated, but harnessed as well. Over the last three years, most part of which, the country in particular...

06 September 2022

EAC States challenged on trade agreements

The East African Community (EAC) partner states have been challenged to increase their volume of transactions under regional and international trade agreements. The region’s private sector trade block, East Africa Business Council, said it is imperative for the region to take advantage of opportunities such as the African Continental Free Trade Area (AfCFTA), African Growth and Opportunity Act (AGOA), Economic partnership agreement, to...

23 August 2022

Uganda's Museveni to investors: Exploit Africa’s untapped investment potential

Uganda's President Yoweri Museveni has told a group of African-American investors who are in the country to explore investment opportunities that investing in Uganda is a ‘sure deal’ to the success of their projects because of the prevailing excellent investment environment in the country. The 16 member team was led by Senegalese-American celebrity and businessman Aliaune Damala Badara Akon Thiam alias Akon who met the President earlier...

18 May 2021

Uganda to work on increasing exports in wake of Covid-19 challenges

In the wake of COVID-19 and its devastating effects, Uganda is producing solution-based products onto market. Unlike in the past, Ugandan products have been warmly received by local consumers because of their improved quality, says NRM National Treasurer Namayanja Rose Nsereko. According to her, Ugandan scientists are in final stages of testing COVID-19 vaccines with 90% probable curing capacity. “All these innovations coupled with...

13 December 2020

Ugandan exporters sensitized on export requirements to benefit from AGOA

The USAID East Africa Trade and Investment Hub (the Hub) partnered with the Uganda Parliament Speaker’s Office, the AGOA Country Response Office and AGOA Exporters Association, to conduct the Uganda Parliamentary AGOA Sensitization Workshops and Exhibition on May 14 -15  at the Uganda Parliament in Kampala. The Ugandan companies learned about the AGOA export requirements to enable them to fully utilize this duty free...

16 May 2019

Uganda parliamentary speaker rallies public to attend local AGOA expo

The Speaker of Parliament, Rebecca Kadaga has highlighted that more needs to be done in creating awareness about the opportunities provided by the African Growth Opportunity Act (AGOA). AGOA is a United States Trade Act, enacted on 18 May 2000 as Public Law that significantly enhances market access to the U.S for qualifying Sub-Saharan African (SSA) countries. Kadaga sounded the call on Friday while addressing the media ahead of a...

11 May 2019

Uganda crafts strategy to maximise potential of its apparel sector

Uganda is crafting a new strategy to revamp its cotton, textiles and apparel sector as part of efforts to tap into the booming global textiles and apparels market. The plans dovetail with similar efforts to refocus the under-exploited opportunity presented by the US-sponsored African Growth Opportunity Act (Agoa) where Uganda's earnings have been modest. Although Agoa represents a huge opportunity for Uganda, its prospects in the past have...

29 April 2019

Uganda: Government working on new AGOA strategy

Uganda will, before the end of April, reportedly launch a national strategy that will identify key products that Uganda can leverage on to improve its exports to US.  The strategy, whose formulation started in 2016, seeks to among others, identify five key products that can influence Uganda’s penetration into the US market.  Ms Suzan Muhwezi, the head of Agoa Secretariat, said the strategy has already been tabled before...

15 April 2019

Uganda's plan for more trade under AGOA

Uganda is working on a plan to increase its exports to the US through the Africa Growth and Opportunity Act (Agoa) in the next five years. Under Agoa, a US trade legislation enacted in May 2000, sub-Saharan African countries export more than 6,000 different products duty free. The Act originally covered an eight-year period from October 2000 to September 2008, but legislative amendments signed into law by former US president George Bush in...

28 November 2018