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UMA Urges Government to Consider Retaliation Measures Against Kenya

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UMA Urges Government to Consider Retaliation Measures Against Kenya
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The Uganda Manufacturers Association (UMA) has called on the government to consider retaliatory measures against the Government of Kenya, citing what they describe as ill-treatment of Uganda and significant harm to investments.

The persistent ban on Ugandan exports to Kenya has led traders to request a more assertive response, as they believe that diplomatic efforts have not yielded positive outcomes.

Richard Mubiru, Executive Director of UMA, stated, “Our very blunt demand as manufacturers is there should be a retaliatory measure because we cannot be in a partnership where access to certain markets is denied. Despite continuous discussions about the mistreatment of Uganda, the government remains engaged in endless negotiations with Nairobi and other capitals.”

Mubiru emphasized, “Since diplomatic approaches have not delivered better results for Uganda, the private sector cannot thrive in an environment of diplomatic appeasement that is causing severe damage to investments.”

Mubiru made this appeal while presenting a paper on the state of the economy during a meeting of the Committee on National Economy on Thursday, October 26, 2023. Officials from the Private Sector Foundation Uganda (PSFU) and the Kampala City Traders Association (KACITA) were also present.

Julius Byaruhanga, the Director for Policy and Advocacy at PSFU, expressed concerns about the ban on milk exports to Kenya in March 2023, which has had a significant impact on trade. Companies like Brookside Uganda have been forced to lay off half of their employees due to this ban.

Byaruhanga stated, “Kenya accounts for 75 percent of Brookside’s dairy market. This unfair practice does not take into account the disruptions in the value chain and the subsequent losses it is causing.”

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He also raised concerns about the recent ban on wheat and maize exports to Kenya. Kenya has historically been the largest consumer of Ugandan maize, with export revenues of US$92 million in 2020 and US$52 million in 2021.

Traders are advocating for the government to strengthen trade relations with the Democratic Republic of Congo (DRC), which they believe has significant potential. Mubiru suggested, “To nearly double our manufacturing output, we do not necessarily need to invest new dollars. If we can secure US$500 million for DRC targeting women, youth, and smallholder exporters, we estimate that the numbers could grow fivefold, resulting in potential annual revenue of US$2.5 billion.”

Mubiru emphasized the need for an export insurance policy to protect the government from compensating for trade losses. He stated, “Parliament has provided compensation to traders for losses in South Sudan and other markets, but our view is that we need to be smarter and create instruments where the private sector does not have to seek compensation.”

Hon. Alex Byarugaba, the Member of Parliament for Isingiro County South, emphasized the need for the private sector to complement the government’s efforts in regulating what he described as illegal trade. He suggested that some traders were mixing cheap imported rice with local rice and exporting it, leading to bans on Ugandan products.

Hon. Francis Katabaazi, the Member of Parliament for Kalungu East County and the Shadow Minister for East African Community Affairs, highlighted the need to improve diplomatic relations in the region. He noted that trade disputes were not limited to Kenya and mentioned issues with South Sudan as well. Katabaazi emphasized the importance of enhancing diplomacy to ensure Uganda is not subjected to trade disruptions

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