With its diverse landscapes and soil and climate capable of producing rich harvests, Uganda has enormous agricultural potential. But for Odrek Rwabwogo, whose mission as special advisor to President Yoweri Museveni includes increasing the value of exports, the country continues to punch well below its weight.
Appointed as Special Advisor in 2021, Rwabwogo is also the Chairman of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), a government institution established in March 2022 with an overarching objective: “to address and overcome strategic and operational bottlenecks that prevent Uganda from fully exploiting its industrial and export potential.
Rwabwogo and his team’s medium-term goal is to increase the value of Uganda’s exports from just under $5 billion to $12 billion a year by 2028 – and they’re shaking up all sorts of wagons apples to achieve their goal.
The need to restore growth
Covid-19 disruptions reduced GDP growth from over 6% in 2019 to 3% in 2021. “We wanted to restore that growth, restore lost jobs,” says Rwabwogo.
The most direct route out of the impasse has been identified as increasing export earnings. The process involved in achieving this would, it was felt, automatically increase levels of efficiency and output at each stage. The benefits would extend to the export sector and raise the productivity bar across the economy.
PACEID looked at 13 of the country’s major commodities – coffee, sugar, cereals, fruits and vegetables, poultry, tourism, beef, dairy, cement, steel, fish, flowers and plant materials, and banana flour – to see where bottlenecks. and how to remove them.
“We looked at each of these products in a very systematic and intentional way and looked at the gaps that we needed to fill,” Rwabwogo recalls.
The exercise consisted of a forensic analysis of the export sector’s approaches, performance and outcomes. This strategy resembled one that a large private sector company, determined to break its legacy chains and increase its revenues and profit margins, would apply to its operations.
Once the dust settled, it was clear that the future would involve considerable change – abandoning some traditional systems and procedures and venturing into previously unknown territory.
In other words, says Rwabwogo, the old approach to exports, which was largely haphazard and left to the vagaries of the market, would be abandoned and a streamlined, results-oriented system based on solid market information , would be put in place. The strategy is to grow business in traditional markets, enter new markets and add value at all levels.
Pillars of the strategy
“This approach is based on four pillars,” explains Rwabwogo. “They can be summarized as follows: compliance and compliance; a new approach to export markets; modernize export infrastructure and deploy export finance. Rwabwogo says that, for example, Uganda will end “blind trade,” which simply means exporting to markets without a proper understanding of them.
Instead, “we want to enter markets after doing some surveys about the tastes and preferences of those markets, what types of products suit them best and their consumer behavior, and then make sure that the companies that make those products are linked to buyers. .”
As the basis of its marketing strategy, it places great importance on personal meetings, participation in trade fairs and the opening of sales offices in important destinations. He knows the importance of being visible and present, in whatever form, on the world’s floors.
He wants to create shopping centers where shoppers can see and handle products such as the country’s excellent Arabica coffee and the exceptional quality of its fruits and vegetables (see African affairs, April 2023). Uganda has trade representatives in the United States, the United Kingdom, the Balkan region, the Democratic Republic of Congo (DRC) and South Africa – five of its most important markets.
On the supply side, PACEID has strengthened its national phytosanitary standards to comply with the often strict requirements of its high value-added markets. It is working on refrigeration modules for its perishable goods and increasing the capacity of its airports and storage areas.
Add value
While striving to introduce its products to traditional and new markets and increase its export volume, Rwabwogo also focuses on value addition.
Exports to the 21 members of the Common Market for Eastern and Southern Africa (COMESA) are worth almost $2 billion, with South Sudan, DRC and Kenya accounting for more than half of that. As the benefits of the AfCFTA now begin to be felt, the volume as well as the value of this trade is likely to increase. Given increasing restrictions on air cargo – a major concern for a landlocked country – Uganda’s intra-Africa road trade could become a mainstay in the future.
But the best prices, he says, come from developed markets. The Middle East, for example, can be a very lucrative destination for Ugandan beef and dairy products. However, penetrating and growing volumes in these markets requires smart marketing and ensuring premium quality products.
For example, Uganda exported nearly $860 million worth of coffee last year. Most of it was the Robusta variety, which does not fetch the highest prices. But the country produces the valuable Arabica variety on its volcanic slopes.
“We produce some of the best Arabica in the world and with just a little added value for transit to premium brands, the same volume of coffee could bring in around $3 billion and open up new markets in China, India and elsewhere “, he said.
The signs are good
With its new knowledge-based and efficiency-driven approach to production, marketing and exports, Uganda is on track to meet its ambitious export revenue target by 2028. The Implications are deep. Uganda’s economy is still largely based on agriculture, although the industrial and oil sector is booming and tourism is starting to pick up after the lockdown. A doubling of export earnings will raise all boats involved in agriculture and supporting services, accelerate the pace of industrialization and provide the jobs its growing population needs.
The signs are good: World Bank figures show the growth rate has returned to 4.7% in 2022 and is expected to reach 5.3% this year, while the government forecasts 6.5% in 2024. But for Rwabwogo, that means it’s time to shift gears and put your foot harder on the ground.