Private Sector Say Ugandan Goods Still Can’t Access Rwanda, Decry Losses

Gideon Badagawa, the Executive Director PSFU speaking at a news conference.

Uganda’s apex body for the private sector, Private Sector Foundation of Uganda (PSFU), has announced they intend to meet President Yoweri Museveni and express their dissatisfaction with the “slow pace” with which Rwanda is handling the border stalemate.

In February this year, Rwanda closed its borders with Uganda citing construction works at Katuna main border point, before diverting trucks carrying heavy cargo to the Kagitumba and Mirama hills border point.

However, it turned out that the two border points were also closed to Ugandan cargo, leaving hundreds of trucks from Uganda stranded.

The Ugandan government has since maintained that they will address the issue through diplomatic channels but not in the media.

At a news conference on Wednesday, Gideon Badagawa, the Executive Director PSFU said Ugandan traders and manufacturers have waited for so long for Rwanda to open the border as they continue to incur massive losses.

The news conference was attended by transporters, manufacturers, traders as well as clearing and forwarding agents.

“The challenge we have as the private sector is that we have been citing Rwanda as one of the markets in attracting investors and business partners. And as a region, we have been promoting East Africa as one investment destination,” Badagawa said.

“One of the things our President (Museveni) has been speaking to investors about is an expansive East African market,” he noted.

According to Badagawa, although the industrial base of some of the EAC member states like South Sudan, Rwanda and Burundi is still low, they are a significant market since the whole of EAC put together has a population of over 160m people.

He highlighted the volatility in countries like DR Congo and South Sudan which has already further reduced the market for investors.

He adds that the private sector has waited for so long for Rwanda to open the border or for the leaders of both countries (Uganda and Rwanda) to solve the matter diplomatically but nothing tangible has been achieved in the last three months.

“Time matters to businesses and we have waited for three months. We are losing business in form of our own profits and jobs, investments are beginning to shrink. If you lose a market, then why would you expand? And this, reduces the tax base and the two economies consequently lose,” he explained.

The Head of Sales Operations at Nile Breweries, Rogers Denis Kisekka said Uganda’s foreign exchange had gone down in excess of USD 2 million for the period the border has been closed.

“The entire primary value chain has been cut down. Farmers are losing, staff are laid off. The ripple effect is humongous. We have lost business in excess of USD 1.5 M,” Kisekka stated.

Last week, Rwanda announced that the Katuna border with Uganda would be temporarily opened to heavy trucks from June 10 to 22 to allow for trial activities on the road section reportedly undergoing construction.

However, Badagawa says Ugandan trucks destined for Rwanda are still not given access.

“There was a sigh of relief when we were told the border had been opened. We all became excited thinking that may be diplomacy had worked, only to be told that the opening was to last two weeks and even the cited road test excludes Ugandan heavy trucks, they are still not allowed access to Rwanda,” he explained.

He says trade between Uganda and Rwanda was before Rwanda’s closure of the border estimated at about USD 200m annually.

“Today, trade has gone down. We are not able to meet existing supply contracts with our Rwandan counterparts. We are losing jobs and investments are about to close down. We need to wake up as government and the private sector,” he added.

Asked why private sector is not pushing for alternative markets instead, Badagawa said Rwanda is part of EAC and its market is vital. He says switching to alternative markets is a process and requires time.

He said Ugandan manufacturers have contracts with their business partners in Rwanda which they have to deal with, short of which they will be sued for failure to respect the terms of the contracts due to Rwanda government’s continued closure of the border and denying access to Ugandan goods.

“Biggest thing in business is predicability of situations. Now, opening the border for two weeks and close it again after 22 June, what happens next? This is not good for business,” Badagawa explained.

Turning to the businessmen who attending the press conference, Badagawa said the Private Sector Foundation has a duty to seek their views.

“We have to assess and appreciate the challenges you are facing arising out of Rwanda’s closure of the border, in order for us to approach President Museveni with facts.

“It is a bit frustrating as we all are aware that it is him.(President Museveni) who closed the border. However, we are lucky that for us (Uganda’s private sector), we can talk to our President openly. We are facing losses, the tax base is shrinking and we are going to meet him,” he added.

The Chairman of the Regional Drivers’ Association, Mr. Byron Kinene joined other businessmen to decry loss of business.

“No goods from Uganda are allowed to enter Rwanda during this two week opening. Rwanda authorities are only allowing in goods in Transit from Mombasa to other countries like DR Congo. This, therefore, is deeper. It seems like a move to target Ugandan traders and business. We therefore cannot just sit and wait.”

Mr. Badagawa explained to journalists that market and security are key drivers of growth and competitiveness.

In conclusion, Mr. Badagawa said the private sector would like to meet President Museveni.

“He is the immediate past Chairman of the East African Community while President Kagame is the current Chairman. We hope that he (President Museveni) can point out to his Rwandan counterpart that his decisions are affecting regional trade and causing massive losses to Ugandan businessmen.

“We are going to meet the top office with facts about the challenges that closure of the border has caused us. When the President was delivering State of the Nation Address, he did not say anything about how the border stalemate would be resolved, yet time is of essence to business.”

Earlier, Head of Business Development at Roofings Group who is also a director at the East African Business Council (EABC), Stuart Mwesigwa wondered how the African Free Continental Trade Area (AfCTA) would be driven while at the same time some borders are closed to trade and travel.

President Kagame who closed the border with Uganda, stopped Rwandans from traveling to Uganda, and continues to deny Ugandan products access to the Rwandan market was one of the key champions of AfCTA during his tenure as Chairman of the African Union. Several Businessnessmen wondered to journalists why the Chairman of the East African Community would cause bottlenecks to regional trade and travel.

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