Uganda is at serious risk of being removed from the list of countries eligible to participate in the African Growth and Opportunity Act (Agoa) due to what the United States calls “human rights violations.”
As Permanent Secretary (PS) of the Ministry of Commerce, Ms. Geraldine Ssali, is well placed not only to provide a scorecard of Agoa, but also to spell out what the country stands to lose if it allows itself to be let go. by the United States.
“Agoa provides over 6,000 eligible products and Uganda’s main exports under Agoa are coffee, cut flowers, fish, textiles and clothing. In 2022, Uganda received Sh39.8 billion in export revenue from Agoa, largely driven by agricultural products under the programme,” Ms Ssali said.
“Some jobs will be lost, particularly in labour-intensive sectors such as textiles, and relatively less in the agricultural sector, although the exact figures cannot be determined at the moment. Other losses could come in the form of USAID trade and investment support to Agoa countries and potential foreign investment in the country that targets the U.S. market without tariffs and quotas. , she added.
PS Ssali estimated that “this is the challenge of unilateral trade agreements such as Agoa”.
Exchange PS Géraldine Ssali. PHOTO/FILE
The Commerce Ministry’s top accounting official said that since unilateral trade agreements such as Agoa “are not negotiated, they can be withdrawn unilaterally.”
Clothes used
Rumors are buzzing that, in addition to “human rights violations”, President Museveni’s decision to stop all importation of used clothing has offended Washington. Ms. Ssali would not allow herself to be drawn into these speculations. She agrees that used clothes or mivumba are essential for many Ugandans.
“Like most African countries, Uganda traditionally imports large quantities of used clothing, providing many consumers with a low-cost and much-needed alternative to more expensive new items. More than 70 percent of clothes donated to charities in Europe and the United States end up in Africa, according to Reuters reports,” she told Monitor.
“Following (President Museveni’s) directive, the ministry immediately undertook a survey to update statistics on local textile capacity to support the implementation of the used clothing ban. The study results are almost complete and we will share them with you as soon as they are ready. However, in summary, statistics so far show that Uganda has only two companies operating vertically integrated textile mills with processes from spinning to tailoring: Southern Range Nytil and Fine Spinners. These mills consume on average five to 10 percent of the total fiber produced in the country and have a combined spinning capacity of 26,900 spindles, weaving capacity of 125,000 meters/day and knitting capacity of 8.2 tonnes /day,” she added.
Mr. Museveni has repeatedly stated publicly in conclusion that Uganda is harmed by circumstances that force it to export the vast majority of its cotton in semi-processed form. Ideally, a ban on used clothing would be cross-cutting and enforced by all countries bound by the East African Community customs union.
“The ban on used clothing does not fall under the Common External Tariff (CET) because Uganda is not saying that it is changing its duty rates on banned clothing (suspension of application) but that it is stopping the importation”, specified PS Ssali.
“Regardless, the East African Community (EAC) agreed in 2016 to a complete ban on used clothing imports by 2019, but Rwanda was the only country to begin implementing implement this ban. This is permitted within the framework of regional integration because the EAC Customs Union Protocol provides policy space through the so-called variable geometry principle, which allows partner states in a bloc integration to implement integration projects at different paces. States participating in an integration agreement are allowed to continue their integration activities, while letting others join later,” she said.
External markets
There are deep concerns about the shape of Uganda’s negotiations in external markets. Who leads the negotiations? Is it the Uganda Export Promotion Council? Maybe the Uganda Investment Authority? Or is it Ssali’s own Ministry of Commerce?
These questions have taken on added importance following recent revelations that President Museveni launched what he believed to be a Serbia-based shopping mall in July. Anecdotal evidence would show that Uganda Connect Mall is a real bar.
“The Foreign Trade Act, which is a law to regulate foreign trade and other matters connected and related thereto, is domiciled in the Ministry of Trade, Industry and Cooperatives. Therefore, the Ministry of Trade, Industry and Cooperatives is the lead agency in negotiating foreign markets,” said PS Ssali.
She added that the cross-functional nature of the business means work cannot be done in silos. Trade hub Serbia is the work of the Uganda Coffee Investment Consortium Initiative. It was also promoted by the Presidential Advisory Committee on Exports and Industrial Development (PACEID).
Empirical evidence from the Uganda Coffee Development Authority shows that the coffee consortium has not exported any coffee to Serbia since the hub opened in July.
“Serbia offers a unique gateway to the markets of the Balkan and surrounding countries. Serbia has free trade agreements (FTAs) with the EU (European Union), Turkey and the United Arab Emirates (UAE), which make it a good entry point for Ugandan products such as coffee, fruits and vegetables, beef and cocoa. she says.
Find your feet
A work in progress, believes the Ministry of Commerce. Ms Ssali said what needs to be worked on is establishing a transport hub between the two countries.
“Air Serbia and Uganda Airlines have indicated that they will enter into a codeshare agreement next year to create a direct link for commercial and cargo routes from Africa to Europe and beyond to all poles trade unions from Serbia,” she said. If Serbia is a waterfall and regional markets like Kenya, Rwanda and South Sudan are rivers and lakes that Uganda is accustomed to, why does familiarity still have this sinking feeling?
“The EAC Partner States, under Article 75 (5) of the Treaty, have agreed to remove all existing non-tariff barriers (NTBs) on the importation into their territory of goods originating from other Partner States and to subsequently refrain from imposing other non-tariff barriers. -passage fees. The mechanisms for removing non-tariff barriers are provided for in Article 6 (2) of the Customs Union Protocol and the EAC Non-Tariff Barriers Elimination Act 2017,” PS Ssali said.
“The ministry engages EAC partner states through this mechanism where NTBs are identified, monitored and resolved. We do not resolve non-tariff barriers through the media. For example, non-tariff barriers resolved included a 25 percent excise tax imposed by Kenya on Ugandan table eggs and a 25 percent Kenyan excise tax on onions, potatoes, crisps and crisps from Uganda, which came into force on July 1, 2022.
“The import ban and denial of market access by Kenya due to non-issuance of import permits for milk powder from Uganda has also been resolved. Given the competitive nature of trade, the elimination of non-tariff barriers is not a one-time event but an ongoing process. You resolve one and the other on crops, but the EAC partner states have shown their commitment to combat any new NTBs that emerge,” she said.
So, are these new markets that Uganda is coveting, like China, Algeria and Serbia, for example, a response to the challenges of the restrictive circumstances to which the country is opening?
PS Ssali said: “As a ministry, we have the responsibility to develop and diversify exports both by product and destination. Therefore, our efforts to reach other markets are an effort to expand and diversify our export markets and not a knee-jerk reaction to the non-tariff barriers facing the region.
She concluded: “The population of the EAC is approximately 480 million people. It therefore makes economic sense for us to reach larger markets such as the AfCFTA (African Continental Free Trade Area) which has a population of 1.4 billion; China, 1.4 billion; and others.”
